Professional Indemnity

Professional Indemnity (PI) policy protects organisations, their principals, partners and employees against a range of alleged negligence claims.

It protects those organisations which are included in the Policy as insured when the Policy is taken out. It also protects their principals, partners, directors and employees. It protects against claims and proceedings alleging the following:

• liability incurred by the performance or failure to perform Professional Services, libel, slander or other form of defamation;
• infringement by an Insured during the performance or failure to perform Professional Services;
• an employee’s dishonesty; and
• loss or damage of documents.

It does so by:

• paying defence costs, judgements and settlements; and
• providing payments at daily rates to compensate for disruption caused by attending court as a witness or observer or by seeing lawyers.

It also pays.

• the reasonable costs and expenses of replacing or restoring lost or damaged documents for which an insured is legally responsible to another party. The policy's protection is tied to those business activities of the insured organisations as agreed between the insurer and the policyholder when the policy is taken out.

The policy is on a "claims-made basis": the relevance of the period of the Policy is that the claims, proceedings and formal investigative enquiries protected against are those first made in the period. As to the cost of replacing lost or damaged documents, the cover applies where the loss or damage is first discovered during the period.

There are monetary limits and other restrictions to how much the insurer will pay under the Policy. These limits and restrictions are agreed between the insurer and the policyholder when the Policy is taken out. One matter to be agreed upon at that time is whether the Policy will provide for a maximum amount payable per claim or a maximum amount payable for the period of the Policy.

Key product benefits:

A broad ‘Civil Liability’ basis of coverage for many professional sectors which includes: 

• Wrongful act, error or omission 
• Misstatement, misleading statement 
• Breach of confidentiality 
• Unintentional breach of contract 
• Fraud and dishonesty 
• Unintentional infringement of intellectual property rights 
• Defamation

Important Policy Terms:

Retroactive Date: A date in the policy before which any work done is not covered, even if a claim is made while the policy is active.

Run-off Cover: Protection for claims brought after a business has stopped trading or a professional has retired.

Indemnity Limit: The maximum amount an insurer will pay. This can be "any one claim" (full limit for every claim) or "in the aggregate" (total limit for all claims in a year).

Professions covered: 

• Accountants - ICAEW compliant 
• Architects 
• Engineers 
• Design & Construct 
• Management/Business Consultants 
• Marketing & Media 
• Miscellaneous 
• Technology 

Professions not covered: 

• Surveyors 
• Solicitors 
• Insurance Brokers 
• Financial Institutions

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