• Professional indemnity insurance can safeguard your business finances.professional woman image by nutech21 from Fotolia.com
  
  Professional indemnity insurance is an insurance policy designed to protect professionals from the financial strain of potential legal claims and lawsuits made against them by clients. Professional indemnity insurance may be a requirement for professionals in certain industries, such medical and legal, but it is a product that can benefit many industry professionals. The policy may cover the cost of legal fees as well as the judgment amount of a lawsuit.
  
  

Industry Requirements

• Professional indemnity insurance is a useful product for professionals in many different industries. Financial service professionals, who may face legal claims resulting from financial advice dispensed to clients, should maintain indemnity insurance. Medical professionals responsible for giving medical and health advice that could potentially lead to litigation are also in a field that can benefit from the purchase of professional indemnity insurance. Other industries include architects and consultants who give out specialized advice.
  
  

Policy Requirements

• The requirements for establishing a professional indemnity insurance policy may vary depending on the issuing insurer. As an applicant, you may need to provide evidence of your work, such as a copy of your business license, business registration paperwork and applicable degrees or certifications. Professional indemnity insurance policies are available as short-term and long-term policies depending on whether you need coverage for the entire scope of your professional work or only for one particular project. If you are taking out a policy to cover one particular project, you may be required to provide specific details about the project as well as information concerning clients, contractors and employees involved in the project. As a policyholder, you are responsible for conferring with your broker to ensure the policy coverage levels are sufficient to meet your coverage needs and those required by your clients.
  
  

Claim Requirements

• According to AllInsuranceInfo.org, most professional indemnity policies are contingent on the basis of claims made and notified, which means that a policy must be in force at the time a claim is made in order to be accepted and paid by the insurance company. In some cases, a client may make a claim against your work months or years following completion. If you plan to cease your policy coverage at the end of a particular assignment or once you retire, you could be vulnerable to losses from future litigation brought against prior work. Consider a retroactive policy to cover potential claims against past work in addition to providing coverage well into retirement.