Write short notes on: Professional indemnity insurance and its exclusions

Professional indemnity insurance Professional Indemnity Insurance is a type of business insurance, typically for organizations that provide consultation or any professional services to its clients. Professional indemnity insurance covers claims made by the businesses in case their clients have sued them for making them endure any significant financial loss due to their advices and services. Professional indemnity insurance is also known as professional liability insurance and also as errors & omissions (E&O) in the United States. It is a type of liability insurance that works to protect businesses and individuals who provide consultation and services with the compensation for full and hefty costs arising from the loss that they have caused to their client. The coverage provided by the insurance company focuses on the alleged failure of the service delivery by the company, which has led to the financial loss due to errors and omissions in the service or consultation. Exclusions of Professional indemnity insurance Below are some exclusions under the professional indemnity policy copy: Contractual Liability: For eg.. A agreed to give maintenance services for the IT Hardware and Software of the Company. He took an insurance policy for the liability under this agreement. This is an exclusion. Loss arising directly or indirectly out of the actual, alleged or threatened discharge, dispersal release, seepage or escape of pollutants. For eg. A policy against the liability due to causing Water pollution under the Water (Prevention and Control of Pollution) Act, 1974. This is an exclusion. Any claim based upon, arising out of, or attributable to the insolvency or bankruptcy of any insured. For Eg. A policy against the proceedings under Insolvency and Bankruptcy Code, 2016 is an exclusion. Any claim based upon, arising out of or attributable to any warranty, guarantee or estimate with respect to fees, costs, quantities, duration or date of completion. For Eg. An insurance extending guarantee for availability of a certain trademark is an exclusion.