Professional Indemnity: A Cover for Errors and Omissions
Professional indemnity (PI) insurance is still very much an emerging class of business in the Gulf.
It is a form of liability insurance which protects companies and individuals who provide professional advice against a claim for negligence made by a client, and legal liability arising thereof for property damage, bodily injury, etc. Legal costs for defence are additionally covered.
Any person who gives advice, designs, or offers similar services in a professional capacity is seen by clients as an expert. It’s natural that clients will pursue a claim if they feel that they have received erroneous advice.
The scope of coverage typically focuses on legal liability arising due to error or omission in the service or product provided by the policyholder.
Professional Indemnity policy covers legal liability towards third party property damage and third party death/bodily injury resulting from an alleged neglect, error or omission in the professional services rendered. PI is sometimes required under contract by other businesses that are the beneficiaries of the advice or service.
A quarter of a century ago, the market for professional liability insurance in the region was limited for various reasons, including a lack of awareness of cover, a relatively non- litigious environment, etc. However, of late there is a strong demand for professional indemnity insurance especially with it being made mandatory by the authorities for a number of professions.