Professional Indemnity Insurance (PII)

There are more than 30 professions in Latvia for which general or professional indemnity insurance is compulsory, but it is also available on a voluntary basis for people working in other fields whose professional activities may cause harm to third parties. PII will create a sense of security and reduce worries about potential operational risks, as well as protect against losses incurred by clients due to negligence or error.

PII is mandatory, for example:

• for construction professionals
• lawyers, attorneys-at-law, notaries-at-law;
• insolvency administrators and court bailiffs;
• medical practitioners, pharmacists, veterinarians;
• auditors, accounting outsourcers, certified auditors;
• valuers, etc.

Professional indemnity insurance covers various risks arising from professional activities. Each profession is exposed to different professional indemnity risks, but the most common are:

• damage to the life or health of a third party;
• costs of proving and litigation;
• temporary or total incapacity for work;
• direct financial loss;
• damage or destruction of property;
• damages relating to the death of a third party.

The policy can be supplemented with various additional risks, such as:

• moral damages;
• damage to the environment;
• loss of profits or income to third parties;
• damage or loss of documents, etc.

Important! The PII policy usually sets a limit of liability per occurrence and per period of insurance. It may also specify certain conditions that must be met for the insurance benefit to be paid.

Compensation for damage to a third party is not payable in the following cases:

• failure to comply with the contractual deadline for submission of the claim;
• if the damage was caused deliberately and with malice;
• if the damage arises out of a planned but not yet concluded contract;
• if the loss is related to unpaid or overpaid taxes, fines imposed by the State or local authorities, legal interest;
• if the loss is related to fluctuations in currency, share or stock exchange rates;
• if the loss does not occur in the territory of insurance;
• if false information has been given about the circumstances of the accident;
• if the loss is caused by an act other than those specified in the insurance contract;
• if the loss is caused by force majeure;
• etc.

Important! When concluding an insurance contract, read the terms and exclusions carefully.

If an insured event occurs, you must inform the insurer as soon as possible and fill in an application for compensation. If requested, you must submit additional documents so that the insurer can assess the event and decide on the amount of the claim.

After the claim has been paid, the total limit of liability will be reduced by the amount of the insurance benefit paid. To restore the limit of liability to its original value, the customer must pay an additional insurance premium in accordance with the contract, unless otherwise specified in the policy.