How do I Choose the Best Indemnity Plan?

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  • Written By: Ken Black
  • Edited By: Andrew Jones
  • Last Modified Date: 11 July 2019
  • Copyright Protected:
    Conjecture Corporation
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Choosing the best indemnity plan involves looking at many different factors including price, coverage limits, company history, and the type of profession being covered. Not all companies may be able to handle all professions to the extent that an individual or company may wish to provide coverage. Therefore you, as a professional, will need to do the research in order to best protect yourself from personal liability that may come from a mistake.

The first thing to consider when looking at an indemnity plan is the price. Chances are, if you receive quotes from more than one company, no two companies will quote the same price, but they may also not offer the same benefits. Choosing indemnity insurance under such circumstances requires being able to compare costs using a cost/benefit analysis. In some cases, an indemnity plan with a lower premium may not provide as much coverage as one with a higher premium, even if both are considered basic package offerings.


An indemnity plan will only pay out up to a certain amount, including legal fees. After that preset amount, it is then up to the individual to come up with the rest of the money. This can cause problems if there is ever a situation where the claim amount exceeds the coverage amount. At that point, an individual could be forced to pay with his or her own personal worth in order to settle the claim. Some plans, or attorneys, may require that the indemnity plan pay their fees before the rest of the claim is settled.

Closely related to coverage limitations are coverage time frames. After the policy has been purchased, some plans will cover you even for actions taken before the plan was bought. On the other hand, once a plan expires, those plans will often not cover you for actions taken while the plan was in effect, if the claim is filed after coverage lapses. This is a very important distinction and should be factored into a decision not only when choosing a plan, but also when choosing whether you need coverage after leaving the profession.

Company history is another important consideration when looking to choose the best indemnity plan. Insurance liability companies are rated by watchdogs in the industry, mainly for financial stability. Others may include ratings for customer service and other factors. Researching the company prior to signing any contract is critical to ensure continuity of providers and ultimate satisfaction. Although disputes may surface from time to time, how they are resolved is critically important.

The other major factor to consider when choosing an indemnity plan is the type of profession you are in. Indemnity plans typically cover service professions that focus in a highly technical field, such as financial services. These individuals may be responsible for dealing with millions of dollars for various clients and need to be protected based on the value they are dealing with. Other professions, such as marketing, may get by with a lower coverage limit, depending on the types of customers they have.



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