Indemnity insurance is vital for any policyholder seeking protection against potential third-party claims.
In exchange for monthly or annual premiums, indemnity insurance safeguards policyholders from claims of possible negligence, a failure or omission in service leading to a client’s monetary loss or legal affair, as well as bodily injury and/or property damage covered by the policy.
Indemnity insurance can also cover losses stemming from a perceived breach of privacy or confidentiality, and some industry associations may require it. For example, faulty plans drafted by an engineer, incorrect legal counsel or a safety specialist overlooking hazardous work conditions can all result in financial loss or bodily injury to a third party (with general liability covering slips, trips and falls).
In the form of auto insurance, indemnity insurance is required in most states and helps cover out-of-pocket expenses due to damages. If you crash while driving a vehicle and a passenger is paralyzed, without a proper policy or high enough coverage limit, you may be on the hook for substantial payouts. With the rising costs of litigation and health care, evaluating coverage limits is a sound decision for policyholders.
Directors and officers coverage is another type of indemnity insurance, protecting personal assets of directors or chairpersons operating on behalf of an organization such as a social club or nonprofit.
Professions benefiting from indemnity insurance include:
• insurance agents
• real estate agents
Additionally, when entrenched in a legal dispute, professionals may opt to settle with a claimant rather than pursue costly litigation. Choosing this route can lead to long-term, negative impacts, as a settlement could be perceived as an admission of guilt.
Indemnity insurance allows policyholders to preserve their professional reputation by covering court costs, representation fees, and, in the event of an unfavorable judgement, any awarded damages.
To learn more about indemnity insurance, contact a Leliaert Insurance Agency staff member today at 574-674-0015.