Professional Indemnity Cover

The key difference between coverage:

• Public Liability – Provides covers for claims made against you for third party bodily injury and property damage
• Professional indemnity – Provides covers for any professional service(s) provided to your clients, this is work that is generally a fee for advice.  (I.e. claims for financial loss arising from an act, error or omission).

Examples of the main type of claims seen under a Public Liability policy:

1. Personal Injury caused by you to a third party
2. Property damaged caused by you to a third party
3. Product Liability

Examples of the main type of claims seen under a professional indemnity policy:

1. Design failure.
2. Alleged specification failure.
3. Inadequate design.
4. Structural design defect.
5. Negligent project management.

All professionals have a responsibility to their client(s) to perform their service with due care and skill. If your business breaches your professional duty of care, then you may be liable to pay compensation to third parties for damage incurred as a result.

Don’t let the two policies confuse you, or lead to an un-insured claim made against you.

Speak to one of our friendly brokers today!

The policy begins becoming complex when the Insurance providers have such a varying scope of cover. The typical extensions of cover you will find in this type of policy are:

Mitigation or Rectification Costs

Direct costs and expenses incurred by the insured in taking action to rectify or mitigate the effects of any act or omission that would otherwise result in a claim covered under the policy

Novation Agreements

Liability the insured has assumed by reason of a novated contract

Proportionate Liability

Liability the insured has assumed by contracting out of proportionate liability legislation

Contractual Indemnities

Liability the insured incurs under an indemnity or hold harmless term of a contract to the extent that such liability results from the insured’s performance of professional services

Why are premiums increasing?

The main reasons behind the premiums hike:

·        Frequency and value claims of the past years

·        Cladding exposures

·        Cross liabilities

·        Loss mitigation costs

·        Increased costs estimates

This has led the majority of insurance providers having to significantly remediate their portfolio or entirely removing themselves from this class of insurance altogether. The insurance providers that continue to write this class of insurance are conservative, and are generally hesitant to take on high risk or heavy claim clients.

Importance of having a broker

Arranging D&C PI is a complex art. It takes experience, both in understanding your industry challenges, along with possessing an extensive understanding of the insurance market to arrange cover. To try and arrange this class of insurance by yourself presently will be near impossible.

Ensure you speak to an insurance brokerage who can demonstrate their knowledge on the above.