Professional Liability Insurance (Insurance)

Understanding when Professional Liability Insurance is required

Professional Liability Insurance is an important protection for many businesses.


Professional Liability Insurance (PLI) is also termed as an Errors and Pmissions Protection Plan or Indemnity Insurance Protection Plan. PLI reimburses an expert or a business against financial damage throughout the company from legitimate cases made by customers on the grounds of carelessness, negligence, misrepresentation.

To protect professionals from an uncertainty, two principle conditions must be met. First, there must be a legitimate agreement set up between the customer and the insured party. Second, clients must be given proper service from the insured party.

While other insurances like life coverage and fire protection have explicit resolutions for administeration, Professional Liability Insurance has no such clear rules.


While the law hasn't characterized the word "Professional", they are generally taken to be specialists or skilled individuals like doctors, lawyers, chartered accountants, financial planners, and others who give counsel. Typically with high compensation.

Insurers may deny cover to individuals they don't consider to be experts, or those who might profit from such protection.

Cost Factors

The expense of PLI varies by industry, business expertise, and client risks - be it financial or health risks. Likelihood of claim is an important factor, for example, medical professionals are considerably more liable to be sued than bookkeepers, who are again significantly more susceptible to being sued than contracted artists.

The following are contributing cost factors:

  • The professional industry and its intrinsic danger factor;
  • The age of the business;
  • The yearly business turnover;
  • Any retroactive policy terms;
  • Where the substance is based;
  • Number of business representatives;
  • Number of customers;
  • General financial assessment of the risk;
  • Lawful history as far as legitimate cases


  1. Professional Liability Insurance (
  2. Professional Liability Insurance (
  3. Professional Liability Insurance - Errors & Omissions Coverage (

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