Professional Indemnity Insurance is a type of liability insurance that covers the legal defence costs and damages, if any, awarded in the event that a client claims negligence on the part of a professional in the course of performing their duties.In other words, should a professional person, during the course of their work cause their client to suffer a financial loss due to failure to perform, an error or omission in the service or product sold or a mistake is made, that professional, so long as the mistake etc.... was made honestly and without malice is covered under the professional Indemnity policy.For some professionals PI insurance is required by their industry regulatory bodies. Some of the professionals that require these policies include but are not limited to architects, lawyers, doctors, engineers, and financial services consultants. An example of a possible claim is as follows: An insurance broker writes a home owner's policy for a client. The client requested replacement cost cover on his contents, but the cover arranged was based on the actual cash value. The client would be able to make a claim under the Professional Indemnity Insurance coverage of that broker.Another example an accountants client invests in an internet investment scheme which turns out to be fraudulent. The client sues the accountant claiming that the accountant was aware of the clients intent to invest in this company and the accountant did not advise against it even though the client felt that the accountant should have been aware of the fraudulent nature of the scheme.