Professional Indemnity

In today’s litigious society, claims against companies and individuals for breach of professional duty resulting in a financial loss are becoming more commonplace.

Professional Indemnity Insurance is designed to provide you and your company with financial protection when claims of this nature arise. It will give you peace of mind when providing advice to your clients.

Any company or individual providing professional advice or services can be held liable for financial loss arising from errors or omissions committed by themselves or their employees. A Professional Indemnity policy will insulate you against this financial exposure, even if a claim against you fails in court.

Professional Indemnity insurance can also extend to cover the legal costs you incur in the defence of a claim.

A Professional Indemnity policy will empower you with greater control and security over the future of your business.

Please Note: Below are some of the more common insurance policy features, however, the list is not exhaustive and some features may not be offered by certain insurers. Please refer to the insurer specific policy wording for inclusions, exclusions, terms and conditions.

Covered Features

Loss of Documents

Coverage for loss of documents by the insured or any person to whom they have entrusted them. Will cover the costs to replace or restore lost or damaged documents.

Fraud and Dishonesty

Policy cover for dishonesty or theft by employees provided that you have not condoned or committed the dishonest, fraudulent or criminal act that resulted in the loss.

Defamation

Provides cover for any claim made alleging libel, slander or defamation.

Reinstatement of Indemnity Limit

Most Professional Indemnity policies will allow a reinstatement of the policy limit in the event that the initial limit has been eroded.

Advancement of Costs and Expenses

Defence Costs, Legal Representation and Public Relations expenses will be advanced prior to the final disposition of a claim.

Bodily Injury & Property Damage

In some cases your policy can be extended to provide cover for an error or omission which results in a Third Party suffering injury or damage to property as a result of a breach of professional services.

Specialist

FAQ's:

Who needs Professional Indemnity Insurance?

Anyone who gives advice and/or services that require a special skill might be regarded as a ‘professional’. That means persons other than those in ‘traditional’ professions, such as doctors and lawyers, are now considered to be professionals, including Strata managers. Make sure you describe your professional activities accurately when taking out this policy. Activities performed and not listed on your policy schedule will not be covered in the event of a claim.

Why does a professional need a Professional Indemnity policy?

Even professionals are only human and mistakes do happen. If there is an error omission that causes someone else “damage”, a professional may also be held to be liable even though there was no negligence.

What protection will a Professional Indemnity policy provide?

Insurance is the best protection against claims of professional negligence. In the broadest sense a Professional Indemnity policy will provide cover in respect to both defence costs and compensation in the event of an action alleging an error or omission during the provision of your professional service.

What is a ‘claims made’ policy & how does it differ from an ‘occurrence policy’?

Most policies, such as Public Liability, Home and Car Insurance require you to have a policy in place on the date the claim happens. With Professional Indemnity Insurance, you need to have a policy in place on the day someone makes the claim against you, even if it is years after the event.

What fact, situation or circumstance should I notify to an insurer?

All of them! If anyone lets you know that they are thinking of claiming against you or you become aware of a potential claim, let your insurer know immediately.

What is meant by a ‘known circumstance’?

Claims arising after the policy inception, which are due to circumstances you already knew (or should have known) at the time of the policy inception, are excluded.

This is because at the time of entering into the insurance, there was a real possibility that a claim may eventuate. So, if you are thinking of changing insurers and are aware of a possible claim, make sure your current insurers are notified NOW of this event. You will also need to advise this to any subsequent insurers under your Duty of Disclosure.

What is the retroactive date?

Retroactive date is the date after which acts, errors or omissions of the insured are covered. This date will be the date on which they first started practicing.

What is automatic reinstatement?

Unlike other forms of liability insurance, the sum insured of the Professional Indemnity policy is limited so that the limit applies to the aggregate of all claims against the policy in the policy period.

The automatic reinstatement allows this aggregate limit to be doubled, while the limit for any one claim remains the limit of the sum insured.

Is cover available for Bodily Injury & Property Damage under a Professional Indemnity Insurance policy?

Under some Professional Indemnity Insurance policies, there is either no cover or limited cover for subsequent Bodily Injury or Property Damage as a result of the professional negligence.