Professional Indemnity Insurance In Dubai & The UAE
Mistakes happen. After all, we are only human. However, mistakes can prove costly if you aren’t properly prepared. Professional indemnity insurance, also called professional negligence insurance, is coverage for small businesses that protects against claims from their clients. Professional Indemnity Insurance is part of our Commercial Insurance policies.
What is Professional Indemnity?
Professional indemnity is negligence that occurs when a professional (accountant, lawyer, realtor, insurance agent, financial advisor, etc.) declines to perform the professional obligations or duties that they were hired by their clients to fulfill. When a professional agrees to perform professional services for their client, the hired professional must exercise “reasonable care” in providing these services.
Reasonable care is defined as “the degree of caution and concern for the safety of the self and others an ordinarily prudent and rational person would use in the same circumstances.” To avoid a claim of professional negligence, the professional must provide the same standard of care professionals acting under similar circumstances would.
What is Professional Indemnity Insurance?
Professional Indemnity (PI) Insurance protects businesses and individuals from financial losses due to claims of negligence, errors, or omissions in professional services. It provides coverage for legal costs and compensation claims if a client alleges professional misconduct or inadequate work.
A Simple Way to Explain Professional Indemnity Insurance
Think of it as protection against mistakes—if a client accuses you of making an error in your work that causes financial loss, this insurance helps cover legal fees and settlements.
What Does UAE Professional Indemnity Insurance Cover?
Professional indemnity insurance commonly covers negligence, copyright infringement, personal injury, and more. This can include damages caused by services a professional provided or services they should have provided.
Generally, professional indemnity protects against legal actions and financial losses associated with any of the following:
- Professional oversights and mistakes
- Services provided (or not provided) that result in client damages
- Claims of negligence
- Breach of contract
- Copyright infringement
- Claims of slander or libel
Professional Indemnity Insurance Coverage Exclusions
- Intentional Misconduct: Fraudulent or criminal acts are not covered.
- Contractual Liabilities: Losses due to contract breaches beyond standard professional errors.
- Property Damage & Bodily Injury: Unless directly related to professional negligence.
- Fines & Penalties: Government-imposed fines are typically excluded.
- War, Terrorism & Cyber Attacks: Unless specified under additional coverage.
Professional Indemnity Insurance Claims Process in Dubai
Steps to File a Claim:
- Notify the Insurer: Report the claim as soon as an issue arises.
- Submit Required Documents: Provide contracts, emails, and proof of work to support your defense.
- Investigation & Assessment: The insurer evaluates the claim to determine liability.
- Legal Representation & Settlement: The insurer may provide legal defense and negotiate settlements.
- Claim Approval & Payout: If found liable, the insurer compensates the affected client as per policy terms.
Which Industries Require Professional Indemnity Insurance in Dubai?
- Legal & Consultancy Firms: Lawyers, accountants, and business consultants.
- Architects & Engineers: Required to protect against design errors or structural miscalculations.
- Healthcare & Medical Professionals: Medical Malpractice Insurance is a specific form of PI for doctors and healthcare providers.
- IT & Technology Services: Protection against software failures, security breaches, and faulty digital services.
- Financial Services: Insurance brokers, investment advisors, and auditors.
- Marketing & Media Professionals: Covers intellectual property disputes, false advertising claims, and defamation.
Examples of Professional Indemnity
Examples of professional indemnity can vary based on your specific industry and services provided. General examples of professional indemnity or negligence include:
- An accountant who fails to provide services at the level expected of a reasonably competent accountant resulting in damages to the client.
- An architect responsible for designing a building that proves to be unsafe resulting in damage or financial loss to the client.
- A lawyer who fails to provide services at the level expected of a reasonably competent attorney resulting in damages to the client.
- A client sues your flower shop after you delivered the flowers to their wedding late.
Why would you need Professional Indemnity Insurance In Dubai?
Professional Indemnity Insurance is important because you save a lot of time and money while defending against a claim as you could be held responsible for your action/advice as well as for those of your partners and employees.
The Policy safeguards your business through cover against claims as well as legal costs, which allows your business to confidently continue its operations. If there is a sincere claim against you, insurance companies along with your insurance broker will provide the proper procedures for you to represent yourself in the correct manner. This allows you and your business to prepare all the required legal documents if you were to go to court.
When your business relies on the advice you give, Professional Indemnity Insurance is extremely critical to move forward with your business. From a risk management perspective, it helps you tighten your business and the manner in which the business provides advice.
Of course, this is a very specific and complicated type of insurance and you’ll need the help of a knowledgeable broker throughout the whole process; Starting with providing options and advice, selecting the most suitable policy, the inception of the policy, and keeping you updated whenever there are amendments or endorsements or claims.
How Much Does UAE Professional Indemnity Insurance Cost?
The price of your professional indemnity insurance can vary depending on a variety of factors. For example, if your business is in an area more prone to professional indemnity claims, such as a legal firm.
The cost of your policy will vary based on the following factors, including:
- Industry
- Amount of coverage
- Number of employees
- Prior claims experience (if you’ve had to file any previous claims
Is Medical Malpractice Insurance the Same as Professional Indemnity Insurance?
No, but they are similar. Medical Malpractice Insurance is a specialized type of PI Insurance designed specifically for healthcare professionals. It covers claims related to misdiagnosis, surgical errors, and patient harm.
Professional Indemnity Insurance Policy Options in the UAE
- Claims-Made Policies: Covers claims filed during the active policy period, even if the incident occurred earlier.
- Occurrence-Based Policies: Covers claims related to incidents that happened while the policy was active, even if reported later.
- Tailored Industry-Specific Policies: Custom coverage for high-risk professions such as healthcare, engineering, and legal services.
How Much Coverage Do I Need?
Professional indemnity insurance typically has a coverage limit. This limit established the maximum amount your insurer will pay toward a covered claim. Any financial loss that exceeds your coverage limit is the responsibility of the policy holder. Working with your insurance professional, you’ll determine the exact amount of coverage needed to protect yourself if a client takes legal action for professional negligence.
Your coverage limits will take the following into consideration:
- The size of your business.
- How many employees you have.
- The industry of your business.
- Business location.
- The services your business provides.
- History of previous claims for professional negligence.
Protecting Your Interests
Understanding how professional indemnity insurance coverage will protect your business can help you be prepared in the event a client takes legal action against you for professional negligence. At Petra, our team of insurance professionals are here to help you protect your interests – both personal and professional.
UAE Professional Indemnity Insurance FAQs
Yes, insurers offer customized coverage based on industry risks, policy limits, and additional protections.
- Professional Indemnity Insurance covers errors, omissions, or professional negligence.
- General Liability Insurance covers bodily injury, property damage, and accidents on business premises.
Yes, small businesses providing professional services can face liability claims, making PI Insurance essential for protection against legal disputes and financial losses.
Other Commercial insurance policies
Medical Malpractice Insurance
This insurance will provide protection against third party claims for medical malpractices that occur covering the cost associated with it.
Business
Insurance
Business insurance is coverage that protects businesses against losses that may occur during the normal course of business.
Business Interruption Insurance
Understanding how business interruption coverage will protect your business can help you be more prepared in the event of an unforeseen natural disaster.
Employee Benefits Through Insurance
Employee benefits through insurance have become a crucial aspect of the modern workplace, playing a significant role in attracting and retaining top talent.
Marine & Aviation Insurance
Marine cargo insurance covers the goods, property and/or merchandise carried by a ship or aircraft.
Cyber Ransom Insurance
Cyber ransom insurance is designed to protect your business in the event of a ransomware attack.
Keyman
Insurance
This is taken out by a business to compensate for any financial losses that would arise from a death or injury of an important person.
Workmen’s Compensation Insurance
It provides coverage for your valued employees in the event they fall sick, get injured or lose their life during employment.
Business Protection Insurance
Hazards that can threaten your company in the future are diverse and very much unpredictable. you need to hedge yourself from all these risks.
Credit
Insurance
Credit insurance is an insurance policy purchased with the intention of protecting a business against commercial and/or political risk that is beyond the control of your company.
Income Protection Insurance For Empolyees
Loss of income in the event of a disability, illness, or death can cause significant personal and economic hardships for employees & their families.
Commercial Property Insurance
We provide a tailored strategy to guard against calamities like fire happening to your assets like buildings, supplies, and warehouse stock.
Contractor All Risk Insurance
Contractor All Risk Insurance is part of our to cover against contracts and construction risks.
Corporate & Business Health Insurance
Corporate & Business Health Insurance serves not only as a mandatory legal requirement but also as a strategic benefit that businesses offer to their employees.
Fleet
Insurance
Whether you own a taxi company, car rental service, or delivery service, if your business relies on multiple vehicles fleet insurance is required.
Professional Indemnity insurance
The cost involved in health care today is extremely high and continuously increasing.
Strata
Insurance
Strata insurance provides the peace of mind that comes with knowing your strata property is covered in the event of damage to common areas.