Indemnity insurance provides coverage to losses and damages incurred by professionals and businesses. Some professions are legally required to have this type of coverage, such as attorneys, medical practitioners, and more. It is most prevalent in cases claiming your practice or business at fault.
Learn about how indemnity insurance works and whether you need this type of coverage. Find out what it generally covers and when it is legally required to carry this coverage. And, see how it provides flexibility for professionals, certain businesses, and service providers.
Your Total Guide to Indemnity Insurance and What it is For – 2021
If your business or professional entity incurs damages or losses, indemnity insurance can provide compensation. This type of insurance serves in some cases to exempt an entity from liability regarding a claim of fault or misjudgment that results in a claim of loss or damages. Some of the most common entities that acquire or are required to carry indemnity insurance include legal service providers, financial services, financial advisors, and medical service providers.
In the event of a medical malpractice claim, indemnity insurance provides compensation to cover the costs of loss and damages. In this policy, the insurance company agrees to make the policyholder fiscally whole as far as they incur losses as a result of their practice. On the other end, the insured party agrees to pay a monthly or annual premium.
It is Liability Coverage: How Does it Work?
This type of coverage is available as an addition to your existing commercial or business liability insurance. And, many professionals and service providers must have supplemental indemnity coverage. It is an extra form of insurance that is specific to professional practitioners and is often called professional liability insurance.
It is most relevant if someone to whom a service is provided, claims negligence or loss as a result of a failure for the service provider to perform the agreed-upon service. Unlike general liability insurance, it does not cover losses as a result of damage to property, bodily harm, or compensation for lost wages.
This type of insurance can cover court fees, attorney fees, and other legal costs associated with a civil claim against a professional business entity. Indemnity insurance kicks in to offer compensation for the costs of litigation and any damages that the entity is required to pay.
Unlike other forms of coverage, this coverage is catered to each policyholder. Each insurance provider has different areas of focus when it comes to indemnity. Talk to a Leliaert insurance associate today to customize the right indemnity insurance policy for your business or professional entity.