Professional Indemnity

The policy covers the payment of the policyholder's legal costs and expenses in investigating and defending a claim resulting from a breach of professional duty, plus any compensation and costs for the person claiming the compensation. Exact cover will vary between insurers and between professions.

The main policy operative clause will be either a civil liability – 'all risks'-type cover – or negligence-only clause. Civil liability clauses usually operate for negotiated group schemes.

Cover is provided on a 'claims made' basis; thus, provided claims are made during the insurance period, it does not matter when the breach took place. This means run-off coverage may be needed to cover claims made during the run-off period after a policy has lapsed for breaches occurring during the main policy period.