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What Is Indemnity Insurance

Indemnity Insurance offers protection against injury or loss through a payout, replacement, repair or reconstruction. Recovery is limited to the amount of the provable loss even if the face amount of the policy is higher. So, it generally requires the insured to prove the amount of its loss before it can recover. Accident insurance and life insurance do not belong to this type of insurance policy.

The most widespread application for Indemnity Insurance is in reference to Professional Indemnity Insurance.

Many professions such as doctors, solicitors, accountants, architects, mortgage intermediaries, insurance brokers and financial advisers are required to obtain professional indemnity insurance. If you are in business or self-employed it is also recommended to purchase professional indemnity insurance as it protects business owners and employees when they are found to be at fault for a specific event such as misjudgment, malpractice, errors�and omissions. Cover may extend to libel and slander, malicious falsehood, passing off copyrights, breach of confidentiality and breach of intellectual property rights. Indemnity Insurance covers you against compensation sought by a client and legal costs.