Professional Indemnity
Most of the time people get confused between Professional Indemnity (PI) insurance, General Liability, and Product Liability. Professional Indemnity as an insurance that provides coverage to professionals, both corporate and individuals, for any negligent act, error or omission occurred during their professional activities and duties. Professional indemnity differs from the other two in that professional indemnity is solely meant for professionals, such as by engineers, doctors, architects or attorneys, offering consulting services to their clients.
Product liability is the legal responsibility applicable to a manufacturer for its customers of its products. Product liability is associated with negligent manufacture of any product. This includes defective or faulty components, manufacturing process or workmanship. Product liability primarily arises due to non-compliance of manufacturing standards by the manufacturer that results in the production of faulty components and products.
Other than general liability and product liability, professional indemnity, however, is the negligence applicable to professional services and consultations rendered mostly by knowledge workers. Professional indemnity insurance policy covers the negligent services of a knowledge professional rendered to its client, which covers an act of negligence, error or omission in the execution of his professional service. Such professional activities include, calculations, designing, consultation, feasibility studies, maps and supervision, and drafting of specification.
Professional indemnity insurance protects and insured, all its employees, and directors against any liabilities arising due to their professional negligence. Professional indemnity covers the legal liability to compensate a third party who has suffered the loss, injury or damage created by the negligence in duty and professional activities of a professional as a result of negligent act, error or omission.
Professional indemnity insurance coverage is a third party coverage, which is just a liability cover, not a property cover that is provided to the assured against the insurance from third party claimants. Professional indemnity insurance covers the liability right from the beginning of the design phase, however, the claim does not come into force until the delivery of the product and the product has left the assured. Professional indemnity insurance is different from product liability and general liability coverage and it serves as an effective insurance cover for any kind of negligence of a professional.
Article Resource:-
http://www.freelanceinsure.co.uk/articles/professional-indemnity.php
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Liability Insurance|PI Insurance
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