Indemnity insurance, also known as professional liability insurance can be defined as a contract in which one party guarantees to compensate the other party for potential or actual damages sustained by the other party in exchange for the payment of premiums. It is a type of insurance that is made to protect business owners and professionals that may find themselves liable for misjudgement that leads to injury or loss to a third party. Examples of professional liability insurance include insurance policies such as errors and omissions insurance and malpractice insurance. With such an insurance policy, the professional gets reimbursed or indemnified against any claims made against them in the course of doing business.
Indemnity insurance is a special form of liability insurance that is designed for service providers and certain professionals. Professionals that provide specialised, expert or counselling services are ones that are most in need of professional liability insurance. It differs from commercial liability insurance and general liability insurance as indemnity insurance is designed to protect you and your business against claims of property damage or bodily harm. Indemnity insurance provides cover from any claim that may arise from failure to perform to negligence, which may result in legal entanglement or financial loss to the client. A client that suffered damages or loss can sue for compensation and the professional who has indemnity insurance will have their insurance company pay the damages, and any litigation costs that may accrue from the legal action.
Some professions in the United Kingdom are required by law to have professional liability insurance by the regulatory bodies governing the industries in which they operate. Some of these professionals include:
While it is not a legal requirement for every professional in the UK to get indemnity insurance, it is recommended that any individual or company running a business that offers their skills, knowledge or advice get professional liability insurance. Such cover is great for your business owner or company as it provides protection regardless of whether the claim against you is justified or not. Furthermore, with small business and independent consultants and freelancers who provide skills, specialist knowledge, and advice to customers and clients becoming the norm, it has never been more critical to protect oneself from any claims. Even as it is exciting to go into business for yourself, mistakes do happen and if you are not covered, you could find yourself having to deal with expensive legal costs which could ruin your business finances or even cost your professional reputation.
While no one intends to cause damage or loss to another person, mistakes do happen and when they do, you need to be prepared.
If you provide professional advice or service you could face claims of breach of duty or negligence. Given that some services such as architectural design services or health services cost quite a lot, claims typically run into the thousands or even millions of pounds. With such high sums on the line, any business that does not have indemnity insurance will likely be ruined if they happen to have a claim brought against them.
Having indemnity insurance is critical as it will not only protect you by providing compensation for any claims brought against your business but it will also pay for any litigation costs.
Given that such cases also tend to threaten the reputation of a business, there is a tendency for professionals to attempt to settle or resolve them as fast as possible which often backfires. Rushing to settle can be seen as an admission of guilt which can cause irreparable damage to your business. With indemnity insurance, you can have all the backing of an insurance and legal team, which will take the time to fight the claims so that you can continue practicing with peace of mind, and most importantly protect your business’s reputation.
Medical indemnity insurance is a type of professional liability insurance made to provide malpractice coverage for a wide range of health professionals that include osteopaths, chiropractors, dentists, nurses, and doctors among many others. Medical indemnity insurance is intended to protect the health professional during the claims process and covers any litigation costs and the final compensation that may be ordered by the court.
Medical indemnity insurance in the UK is one aspect of practice that everyone who works in health needs to be aware of even if you believe that you work in the most obscure health niche. Medical indemnity insurance is applicable to anyone that deliver medical services right from general practitioners to dentists, nurses, psychologists, and therapists. The indemnity insurance provides cover for you in the instance of costly litigation that can happen when you are accused of malpractice or negligence by a customer, client, patient or their agents in the course of providing medical treatment. The indemnity can be applied anywhere you provide professional health services that could be applied to the employer’s medical indemnity insurance. It is also applicable for any type of medical treatment you provide outside the workplace that may be unrelated to your specialization. Some examples of this include delivering first aid to a passer-by or a passenger on public means of transportation. This makes medical indemnity insurance a necessary component for any medical practitioner as one mistake or incident could destroy your reputation and with it your career.
Medical Malpractice indemnity insurance provides protection from errors and omissions that you may commit while providing medical treatment. These may include mental or physical harm, delay in referral, misdiagnosis, and injury to the patient. You will not be covered for any incidents or mistakes that happened before you took out the indemnity insurance cover.
Depending on your circumstances and profession, a medical indemnity cover will provide you with assistance, advice, and representation before professional bodies or disciplinary committees. These bodies include the likes of fatal accident inquiry or inquest proceedings; NHS tribunal or service compliant proceedings, primary care trust or health board; health authority; GDC and GMC among others.
Indemnity insurance protects you from the costs and potential compensation costs from a claim even if it is unsuccessful. This means that you will not have to pay any legal costs that you will have to pay even if the claims brought against you are unsuccessful. The only costs not covered are claims for treatment falling under the umbrella of the NHS Trust Indemnity and any of the equivalents.
The medical indemnity insurance provides retrospective cover so that you can be protected for past work. There is a statute of limitation of three years from the time they realise the malpractice to the time they make a claim and a further three years for them to close the claim. As such, it is critical that you get your cover during the run off period, so that you are protected even if you may not necessarily be working at the time.