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It is a type of insurance plan that provides coverage to professionals who offer professional services or advice such as engineers, doctors, lawyers, accountants, consultants, architects, etc.
It gives one the protection against the client-related legal issues and also if the client accuses the policyholder of negligence, breach of duty, errors, or omissions.
Plans like this cover legal defense costs, pays for the settlement costs (subject to policy terms) and even investigates the claim made by the client.
The policy essentially covers the insured professionals against any damages to a third party in respect of any errors or omissions in the process of rendering professional services.
Under the policy, there are exclusions that include instances like a case of a doctor, any criminal act, fines, or penalties are excluded.
Services that are under the influence of narcotics are not covered in the policy.
Similarly, the coverage can not be provided if the procedure is not done properly at a hospital.
The sum that is assured for professional indemnity cover depends upon the profession and risk exposure.