Calculation of Professional Indemnity Insurance Cost

Being a professional has its own set of risks. Many professionals or firms provide services, advice and consultations to clients. Irrespective of skills, knowledge and experience, there is always a possibility that they might make a mistake resulting in losses, financial or otherwise. Insurance is one of the most common risk mitigation tools. Like any other insurance type, covering for risks comes at a cost. In the article below we shall look at the factors that affect professional indemnity insurance costs.

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Key Factors that Impact Professional Indemnity Insurance Cost

Professional liability insurance premium amounts vary from insurer to insurer. Each insurer or insurance company takes a view depending on the risks the business is subject to. Accordingly, premium rates are decided.

Profession and Industry Type

One of the biggest factors that affect the professional indemnity insurance cost is the type of business and industry they operate in. At the time of purchase, the insurance company assesses the type of industry and the business activities they perform. Based on the industry standard and the activities undertaken, the likelihood of a claim and the severity of the same is assessed.

Size of the Business

While a growing business is a sign of how well things are flourishing, it may also need more coverage of professional indemnity insurance. A small retail business with a single outlet may have lower risks compared to those with a higher number of outlets. Thus, the premium amount will also increase.

Annual Turnover

Similar to the above point, the amount of professional fees bears a direct relation to professional indemnity insurance costs. For instance, if the professional charges a higher fee, the premium cost will be higher.

Geographical Areas

Jurisdiction of operation too plays a vital role in determining the cost.

Experience of the Professional

The professional’s ability to provide accurate advice, manage client’s expectations, recognize and mitigate client disappointment etc., determines the premium amount.

Claims Experience

The frequency and severity of claims are major determinants of professional indemnity insurance costs. Also, if the professional is unable to provide adequate remedial action, it shows a lack of risk management. All these reasons significantly affect professional indemnity premiums. It can also be said that past records help insurers weigh the risks and judge the premium calculation.

Level of cover

Finally, the type of cover you choose decides your premium. Like most things, the more goods you buy, the more you pay for them. Similarly, while choosing a cover, if you choose a comprehensive cover or include add-ons to the basic cover, the premium to be paid will be more.

Explore Types of Professional Indemnity Insurance

Conclusion

While applying for professional indemnity insurance, ensure the actual practice is reflected. The insurance company is responsible for conducting due diligence. But, you as an applicant should aim to provide key details that help you get maximum coverage at the best rates. This practice will help the insurer develop an accurate picture of the necessary coverage for your business.

Written By: PolicyBazaar - Updated: 20 June 2023
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Policybazaar for Business - Professional Indemnity Insurance - Customer Reviews
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4.5 April 24, 2023
Harshit
Helpful Purchase
Profesiona Indemnity Insurance has been a game-changer for my consultancy business. It has given me the confidence to take on new projects and expand my services, knowing that I have robust coverage in place.PolicyBazaar has been fantastic in answering my questions and tailoring the policy to my specific needs.Thanks PolicyBazaar.
Pune
3.5 April 12, 2023
Bhavesh
Amazing Deals
I recently purchased Professional Indeminty Insurance from PolicyBazaar and the claims process is smooth, and has always been prompt in resolving any issues or concerns I've had. I appreciate the reliability and professionalism they exhibit.
Howrah
3.8 March 31, 2023
Bhuvan
Online Purchasing
Profesional Indemnity Insurance has been a lifesaver for my business. It offers comprehensive protection against any claims that may arise from errors or negligence on my part. The claims process was straightforward, and they handled everything efficiently. I highly value the peace of mind this insurance provides and would recommend it to any professional.
Madurai
4.3 March 13, 2023
Atif
Impressive Features
I had an excellent experience while buying Personal Indemnity Insurance. It was quick and easy to get a quote online and the premiums were quite affordable. The policy covers all the essential aspects, and the customer service team was responsive and supportive. I feel much more confident in my work knowing that I have this coverage
Agra
3.8 March 01, 2023
Tejas
Helped To Secure Confidential Data Of Company
As a Owner I had a high risk of loss of confidential data. Then my colleague suggested me go for PI Insurance at PolicyBazaar. So I visited their website and contacted the team. They answered all my queries, and when I got satisfied with the plan, I made a purchase. Thanks, PolicyBazaar.
Nashik
4.3 February 17, 2023
Ankita
Covers Legal Expenses
There was a party that made a claim against us for professional negligence by one of our employees. Thanks to PolicyBazaar which helped me protect our financial position and helped us during the claim process that covered our Legal expenses and Settlement cost. Highly Recommend this.
Allahabad
4.3 February 05, 2023
Monika
Covers The Risks
I bought Professional Indemnity Insurance from PolicyBazaar, as I was looking for insurance that could mitigate my risk associated with several professional services. Thanks to PolicyBazaar. It was worth buying. Highly Recommend it.
Jamshedpur
4.3 January 24, 2023
Riya
Helps Me To Focus On My Work
I was always concerned about my organization in order to safeguard against potential liabilities and unforeseen circumstances that could arise from professional negligence. So I bought PI Insurance at Policybazaar and found it good as it helped me to focus on my work without worrying about financial repercussions. So thanks to PolicyBazaar.
Vadodara
3.8 January 08, 2023
Shreya
Amazing Deals
I bought Professional Indemnity Insurance from the PolicyBazaar website and found it suitable for my business. I run a small company. I got terrific Deals at PolicyBazaar. It was an excellent Purchase. Thankyou PolicyBazaar.
Ludhiana
4.3 December 14, 2022
Doctor Vishal
Covers Professional Negligence
As a Doctor, I was searching for Professional Indemnity Insurance that could provide me coverage against claims for Negligence in my services. Then I visit PolicyBazaar Website. There I came across several benefits. So I made the purchase there. Thanks, PolicyBazaar.
Kochi