Professional Indemnity/ Errors and Omissions Insurance cover provides protection for the company for claims brought in respect of negligent acts, errors or omissions in the performance of professional services. The policy is meant to pay for defence expenses and damages and includes amounts that you are 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.
Errors & Omissions policies are very flexible, and many of the below given benefits are optional, or can be added/removed. These benefits may be sub limited to a certain % of the sum insured, depending on insurer.
Legal defense costs. Insurer may choose to appoint their own lawyers; or work with your appointed legal counsel. Covered under every Professional Indemnity policy.
Every liability policy has a deductible, or retention, which is the amount the policyholder has to pay out-of-pocket in case of a claim
Emergency Defense Costs
Legal help that is required immediately, before claim can be processed
Fraud and Dishonesty of Employees cover
Legal issues arising due to isolated actions of an employee or group of employees.
Breach of confidentiality extension
Cover will automatically include any suit that contains breach of Confidentiality.
Interference with Privacy Extension
Covers claims alleging unlawful interference with privacy
Auto Acquisition of New Subsidiaries
New Subsidiaries created can be added to the policy during the policy period. This is usually limited to subsidiaries whose turnover is 15% of the parent company’s or less
Loss of Documents/Data
Any claim resulting due to loss of documents in your care. This applies to electronic data as well. Data Breaches however are covered under cyber liability not professional indemnity.
IPR and trade secrets extension
Any claim alleging breach of intellectual property rights and/or divulging of trade secrets. Patent Infringement is generally excluded.
Defamation including Libel and Slander
Cover for claims arising due to allegations of libel or slander.
Court Attendance Fee
Provides a payout for court attendance; usually in 2 slabs, one for directors and one for employees
Costs that are incurred to handle a claim event before a lawsuit, to avoid bad publicity, etc
Consequential loss, special damages and loss of claimant's profits
Any court ordered loss to claimant for consequential loss or loss of profits. This is not always available, will depend on the nature of your work.
Failure of Technology Product
Claim due to failure or non-performance of your product even if you have stated you will do the best and maintain set standards. Applicable only to tech/software companies.