Professional Liability Insurance

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Description of Professional Liability Insurance. Explanation.


Professional Liability Insurance

What is Professional Liability Insurance? Description

Professional Liability Insurance (PLI) is a form of business insurance that provides coverage for professional, specialized, advice- or service-providing individuals and companies.

It provides cover for the costs to pay for any negligence or liability that might result from such services of from defending and settling claims of negligence and loss of client’s data or documentation.



  • Professional Liability Insurance is also called Professional Indemnity Insurance (PII).
  • The term "Errors and Omissions Insurance", or E & O is used as a distinction from the generic "professional liability insurance" and applies especially to advice-giving consultants, brokers and lawyers, real estate agents, accountants and insurance agents.
  • Likewise, when it refers to medical professions, PLI is often called "Malpractice Insurance".

Who needs professional indemnity cover?

  • Accountants
  • IT Consultants
  • Brokers
  • Management Consultants
  • Estate Agents
  • Education Consultants
  • Financial Service Providers
  • Recruitment Consultants
  • Etc.

The primary reason for professional liability coverage is that a typical general liability insurance policy will only respond to a bodily injury, property damage, personal injury or advertising injury claim.


Professional Liability Insurance Coverage


Common claims that professional liability insurance covers are:

  • Negligence
  • Misrepresentation
  • Violation of good faith and fair dealing
  • Inaccurate advice.

This type of coverage can be mandatory in some countries or states for certain fields such as those working in medical, legal, accountancy.


It’s important to note that almost all professional liability insurance policies are sold on a “claims-made” basis. This means that the insurance only covers work performed while the policy is in force, and for claims actually filed during the term of the policy. If you cancel your PLI-policy without arranging for an extended reporting period, your coverage ends, and any claims submitted after the cancellation will not be covered, even though the work was performed while the policy was in effect.

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