Be Warned – Get Professional Indemnity Insurance!
Indemnity means security against loss/damage, or exemption from incurred penalties/ liabilities. A professional engaged or employed for a specific work makes a mistake due to his negligence or misjudgment when he should have known better, and causes a hurt or a loss to a person or an organization, he (or she, as the case may be) is liable to compensate for the hurt or the loss. An liability insurance policy for this purpose is known as Professional Indemnity Insurance.
In most of the modern societies, it is now commonly accepted that professionals such as lawyers, doctors, architects, accountants, etc. should be held legally accountable for their negligence (or mistakes, or misjudgments or errors-&-omissions – different ways of looking at the same basic truth!). An attorney engaged by you for a case fails to file certain papers in the court at the right time and hence you lose your case or suffer a loss; a surgeon, due to his negligence, causes serious infections and causes a loss of life or an architect due to his misjudgment causes a building collapse and loss of life and financial loss – there could be innumerable instances of this nature we could find!
Professional Indemnity Insurance claims are extremely complicated because it is very difficult to prove that a mistake or error that was committed was unreasonable & avoidable taking into account the professional’s education and experience; and further that as a direct result of that mistake or error a loss or damage has been caused.
Indemnity Insurance is very expensive due to the complicated nature of the issues involved and it is often said that the cost of medical treatment in USA is very high mainly because of the professional indemnity insurance that is statutorily required to maintain. In any case Professional Indemnity Insurance is becoming necessary for all professionals, whether, doctors, architects, lawyers, accountants or what!