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Indemnity Insurance is in place for the purposes of providing financial compensation in the event of damage or injury to a third party. In legal terms, this is a contract where one person has to pay another person should any loss arise during the time that the contract is in place. A company or an individual can get money from an insurance company if found to be at fault. There is even cover for the legal fees incurred should the matter go to court. Personal indemnity cover is less common than professional indemnity cover.
The policy will indemnify the insured against any loss or damage that is listed on the policy schedule. A typical scenario would be between a tenant and a landlord. Tenants are responsible for any damage to property while they reside on the property. Conversely, should the tenant be injured due to a pre existing condition on the property then the landlord could be liable for damages. Hazardous pursuits such as skydiving and bungee jumping would be excluded from such policies.
Professional indemnity applies when a client is harmed financially or physically because of negligence on behalf of the professional. This negligence could be for a number of different reasons. This type of cover is very necessary in the fields of accountancy, architecture, law, beauty and medicine. These companies would be covered in the event of their clients be harmed due their mistake in whatever shape or form. This type of insurance also covers legal costs.
In the case of personal, the family can be protected financially because of any negligence. Professional indemnity is a little more important as there is more chance negligence can occur in this scenario. These people are given financial and professional support regardless of the claim has foundation or not.
If the professional is blameless of the charges then the insurance company will assist in proving this. At the same time, money will be provided. Without this cover, the defendant has to deal with all of these matters on his or her own. Finances and reputation both receive cover from the carrier.
A financial advisor client is offered cover in the case of bad being given by said financial advisor. Negligence and or bad advice can have serious repercussions for the client. Hence, this type of cover is appropriate.
It makes good financial sense for all professionals to have Indemnity Insurance. In certain instances, it could well be necessary for individuals to also have this kind of cover. This gives peace of mind to the client and the professional alike.
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