The policy provides protection for the company and its subsidiaries for claims brought in respect of negligent acts, errors or omissions in the performance of professional services. The policy is meant to pay for defense expenses and damages and includes amounts that the insured is legally required to pay because of judgments, arbitration awards or the like rendered against the insured, or for settlements negotiated in accordance with the coverage afforded by the policy.
Range of Risks Covered.
- Errors and omissions indemnity policy covers the company or an individual against litigation filed by a third party for financial loss during the course of providing services.
- Infringement of intellectual property including copyright, trademark and any trade secret is covered.
- Claims related to misuse or mis selling of any information that is either confidential or subject to restrictions is also covered.
- Covers litigation costs arising out of a case filed by the 3rd party. It covers compensation determined, as payable to third parties, by the courts.
- Cover claims against the estates and legal representatives of the insured.
Which kind of expenses are covered under defense costs?
- Other additional extensions available under indemnity insurance are defamation cover, libel and slander, and cover for employee dishonesty.
- All claims based on incidences that took place after the retroactive date are covered. This is the date that the first indemnity insurance was bought, provided renewals have been timely.
Errors and omissions policy will pay for the costs, fees and expenses incurred during investigation and trial period. It would include lawyer and legal representative fees and in some case settlement costs. Expenses of your representation at court, inquiry or any other proceeding which have direct relevance with any claim arisen is also covered under liability insurance.
What is not covered under professional indemnity insurance?
Any criminal, intentional, fraudulent, willful and malicious activities are not covered under the professional indemnity insurance. Also, bodily harm to any person and damage to the property is also generally excluded from the policy. Further, punitive fines, penalties or damages are not covered. Lastly, claims occurred prior to policy period are also excluded from the policy.