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Professional Indemnity PSA

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PROFESSIONAL INDEMNITY PSA

This Professional Services Agreement (the Agreement) is entered into as of the Effective Date: by and between Client Name: , an entity organized as Individual Corporation LLC Partnership, with principal address: (\"Client\"), and Service Provider Name: , an entity organized as Individual Corporation LLC Partnership, with principal address: (\"Service Provider\").

RECITALS

WHEREAS, Service Provider has professional expertise and qualifications to perform the professional services described in this Agreement; and

WHEREAS, Client desires to retain Service Provider to provide such services and Service Provider agrees to provide the services under the terms and conditions set forth herein; and

WHEREAS, the parties wish to allocate risk and establish indemnity, insurance and limitations of liability relating to the services to be performed.

NOW, THEREFORE, in consideration of the mutual covenants contained herein, the parties agree as follows:

1. DEFINITIONS

1.1. "Services" means the professional services described in Schedule A attached hereto and any other services mutually agreed in writing. 1.2. "Claim" means any demand, suit, action, proceeding, loss, damage, liability, cost or expense (including reasonable attorneys' fees) asserted by any third party.

2. SCOPE OF SERVICES

Service Provider shall perform the Services in a professional and workmanlike manner consistent with generally accepted industry standards. Any material changes to the scope must be agreed in writing by both parties.

3. TERM

The term of this Agreement shall commence on the Effective Date and continue until completion of the Services unless earlier terminated in accordance with Section 8.

4. FEES AND PAYMENT

Unless otherwise stated, invoices shall be due within 30 days of invoice date. Overdue amounts shall accrue interest at the lesser of 1.5% per month or the maximum rate permitted by law.

5. PROFESSIONAL INDEMNITY

5.1. Service Provider shall indemnify, defend and hold harmless Client and its officers, directors and employees from and against any and all Claims arising out of or resulting from the negligent acts, errors or omissions of Service Provider in the performance of the Services, provided that such Claim is caused in whole or in part by a negligent act or omission of Service Provider. This indemnity includes reasonable costs of investigation and attorneys' fees incurred in defending such Claims.

5.2. Client shall indemnify, defend and hold harmless Service Provider for Claims arising from Client's breach of this Agreement or Client's gross negligence or willful misconduct.

6. LIMITATION OF LIABILITY

Except for liability arising from willful misconduct or the indemnities in Section 5, the aggregate liability of either party for claims arising under this Agreement shall not exceed the total fees paid by Client to Service Provider under this Agreement during the twelve (12) months preceding the claim. Neither party shall be liable for incidental, consequential, punitive or special damages.

7. INSURANCE

Service Provider shall maintain professional liability insurance and any other insurance reasonably required by Client, and shall provide certificates upon request.

8. TERMINATION

Either party may terminate this Agreement upon thirty (30) days' written notice to the other party. Either party may terminate immediately for material breach if such breach is not cured within fifteen (15) days after written notice. Upon termination, Client shall pay Service Provider for Services performed to the date of termination and for reasonable wind-down costs.

9. CONFIDENTIALITY

Each party shall treat as confidential all non-public information disclosed by the other in connection with this Agreement and shall not disclose such information except to affiliates, employees or advisers with a need to know and who are bound by confidentiality obligations no less protective than those herein. Confidentiality obligations survive termination for a period of three (3) years.

10. INTELLECTUAL PROPERTY

Unless otherwise agreed in writing, Service Provider grants Client a non-exclusive, non-transferable license to use deliverables created under this Agreement for Client's internal business purposes. Service Provider retains ownership of any pre-existing intellectual property and tools; Client receives only the rights expressly granted herein.

11. REPRESENTATIONS AND WARRANTIES

Each party represents and warrants that it has the full corporate power and authority to enter into this Agreement and to perform its obligations hereunder, and that performance will not violate any applicable law or contractual obligation to a third party.

12. COMPLIANCE WITH LAW

Each party shall comply with applicable laws, rules and regulations in the performance of its obligations hereunder, including but not limited to data protection and export control laws.

13. NOTICES

Notices shall be in writing and delivered personally, by certified mail, return receipt requested, or by recognized overnight courier to the addresses set forth above (or such other addresses as either party may designate by notice).

14. AMENDMENTS; WAIVER

No amendment to this Agreement shall be effective unless in writing and signed by both parties. The waiver of any breach shall not be construed as a waiver of any subsequent breach.

15. COUNTERPARTS

This Agreement may be executed in counterparts, each of which shall be deemed an original, and all of which together shall constitute one and the same instrument. Electronic signatures shall be deemed original signatures for all purposes.

16. GOVERNING LAW

This Agreement shall be governed by and construed in accordance with the laws of the jurisdiction specified above without regard to conflict of laws principles.

17. ENTIRE AGREEMENT

This Agreement, including all schedules and attachments, constitutes the entire agreement between the parties with respect to the subject matter hereof and supersedes all prior and contemporaneous agreements and understandings, whether written or oral.

18. SEVERABILITY

If any provision of this Agreement is held to be invalid or unenforceable, such provision shall be reformed only to the extent necessary to make it enforceable, and the remaining provisions shall remain in full force and effect.

GENERAL PROVISIONS

The parties acknowledge that they have had the opportunity to review this Agreement with counsel and that the terms hereof are negotiated and not to be construed against either party as drafter.

Client Printed Name:

By:

Date:

Service Provider Printed Name:

By:

Date:

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What the Professional Indemnity PSA Is and When It Applies

A Professional Indemnity PSA is a contract provision or standalone agreement allocating responsibility for losses arising from professional services, errors, omissions, or negligent advice. It typically defines the scope of indemnity, notification and defense procedures, limits or caps on liability, insurance requirements, and exclusions. Organizations use it to transfer or allocate financial risk between service providers and clients, to set expectations for claims handling, and to require proof of professional liability insurance where appropriate in commercial engagements.

Why a Professional Indemnity PSA Matters for Risk Allocation

A clear Professional Indemnity PSA reduces ambiguity about who pays for claims tied to negligent professional advice or services, aligns contracting parties on insurance and defense responsibilities, and helps manage exposure to third-party claims. Well-drafted indemnity language is central to contract risk management and insurer underwriting assessments.

Why a Professional Indemnity PSA Matters for Risk Allocation

Who Typically Prepares and Signs a Professional Indemnity PSA

The Professional Indemnity PSA is used by organizations and individuals who provide or purchase professional services and need to allocate liability and insurance responsibilities clearly.

Parties should involve legal counsel and their insurance broker to confirm the indemnity scope, required endorsements, and whether the PSA interacts with other contract provisions such as limitation of liability or warranty clauses.

Core Elements to Include in a Professional Indemnity PSA

A Professional Indemnity PSA should cover scope, trigger events, who defends claims, monetary limits, insurance obligations, and exclusions to ensure clarity on responsibilities and remedies between parties.

Scope

Define covered services, timeframes, and whether third-party claims, client reliance, or subcontractor acts are included or excluded from indemnity.

Trigger

Specify what triggers indemnity (negligence, breach, willful misconduct, or intellectual property infringement) and whether claims must be asserted within a notice period.

Defense

State which party controls defense, whether counsel approval is required, and how defense costs are allocated or advanced during claim resolution.

Limits

Include monetary caps, per-claim and aggregate limits, and any deductible or self-insured retention applicable to indemnified losses.

Insurance

List required insurance types and limits (professional liability/errors & omissions), naming conventions, and whether a certificate or endorsement is required.

Exclusions

Call out excluded losses such as punitive damages, consequential losses, or claims arising from unlawful acts or client-supplied specifications.

Essential Information Fields to Capture

Parties: Full legal names
Effective Date: MM/DD/YYYY
Services Scope: Concise description
Indemnity Trigger: Negligence, breach, IP
Insurance Limits: Dollar amounts
Notice Address: Street, email, phone

Risks and Consequences of Weak or Missing Indemnity Terms

Uninsured Exposure: Large out-of-pocket losses
Contractual Liability: Unlimited indemnity obligations
Defense Control: Loss of control over litigation
Regulatory Risk: HIPAA reporting exposure
Third-Party Claims: Investor or client suits
Tax/Reporting: Potential penalties under IRC

Real-world Examples of Professional Indemnity PSA Use

These short cases show how organizations use Professional Indemnity PSAs to manage professional risk and maintain compliance across client engagements.

Optica Ventures — COO

The interface is simple and easy-to-use for our team; more importantly, it is just as easy for our customers.

  • Signed indemnity clauses clarified client responsibility for advisory recommendations.
  • Result: clearer claims allocation and smoother insurance verification when onboarding new portfolio companies.

Martin Properties — Founder

I can process and execute all of these documents online with 100% compliance and built-in security.

  • The PSA required contractors to carry professional liability insurance.
  • Outcome: reduced contract disputes, faster contract execution, and documented evidence for risk transfer to insurers.

Step-by-Step: Completing a Professional Indemnity PSA

Follow these steps to prepare, review, and finalize a Professional Indemnity PSA so it accurately allocates risk and meets insurance requirements.

  • 01
    Gather details: Collect party names, service description, and effective date.
  • 02
    Define triggers: Specify what events will trigger indemnity obligations.
  • 03
    Set limits: Choose per-claim and aggregate caps and any deductible.
  • 04
    Attach insurance: Require certificates and endorsements from insurers.

How to Configure an Online PSA Workflow

Configure e-signature and routing settings to match your approval process and evidence requirements when using an eSignature platform.

Field Configuration
Signature Type Electronic signature with audit trail
Authentication Level Email or SMS OTP; KBA for higher risk
Routing Order Sequential or parallel signer order options
Document Retention Keep audit trail and signed PDF copies

Where to Send and How to Submit the Signed PSA

Determine submission paths and custody rules so signed PSAs are delivered to the right parties and retained correctly.

  • Primary Recipient: Send final signed copy to contract admin and client.
  • Insurance Broker: Provide certificates and endorsements as proof of coverage.
  • Internal File: Store executed PSA in contract repository with audit trail.
  • Legal Counsel: Share if indemnity language deviates from standard form.

Digital Signing and eSubmission Considerations

Ensure the eSignature platform supports secure audit trails, configurable authentication, and certificate storage to preserve evidentiary value for indemnity obligations.

  • Authentication Methods: Email, SMS, KBA options
  • Integrations: Salesforce, NetSuite, Google Workspace
  • Document Formats: PDF, DOCX supported

Use platforms that retain a tamper-evident audit trail and provide exportable signed PDFs and certificates of completion for storage with insurance and contract records.

Important Timing: Notice, Insurance, and Claim Deadlines

Common timing elements in a Professional Indemnity PSA affect when parties must notify claims, maintain insurance, and renew coverage.

Effective Date:

When obligations begin; triggers coverage and statute timing.

Claim Notice Period:

Typically 30–90 days; check contract for exact requirement.

Insurance Proof Deadline:

Provide certificate before services commence.

Policy Renewal:

Maintain continuous coverage during contract term.

Record Retention:

Retain executed PSA per retention schedule below.

eSignature Pricing and Capability Snapshot for PSA Workflows

Compare core pricing and feature dimensions relevant to signing and distributing Professional Indemnity PSAs. signNow is listed first per vendor comparison convention.

signNow DocuSign Adobe Sign PandaDoc HelloSign
Starting Price $8/user/mo $15/user/mo $14/user/mo $19/user/mo $15/user/mo
Free Trial 7-day free trial Varies by offer Varies by offer Varies by offer Varies by offer
Bulk Send Yes Yes Yes Yes Varies
Audit Trail Yes Yes Yes Yes Yes
HIPAA Compliant Yes Yes Yes No No
Envelope Cap No cap 100 envelopes/user/year Varies by plan Varies by plan Varies by plan

FAQs and Troubleshooting for Professional Indemnity PSAs

Answers to common legal and practical questions about using, signing, and storing a Professional Indemnity PSA in U.S. contexts.


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