All you need to know about Professional Indemnity Insurance
What is Professional Indemnity Insurance?
A Professional Indemnity policy covers your liability for professional errors. A typical PI policy will provide indemnity to the insured against ‘loss arising from any claim or claims for breach of duty which may be made and reported to the insurers during the policy period by reason of any neglect, error or omissions committed in the conduct of the insured's professional business...’. It is typically purchased by anyone who gives advice in return for a fee such as architects, business consultants, surveyors, IT Consultants. If the advice that a consultant gives to a client is incorrect or negligent and the client suffers a financial loss as a result of the poor advice then it is a Professional Indemnity policy that responds to pay the defence costs and any compensation due to your client.
Why would I need Professional Indemnity Insurance?
Traditionally, people like Accountants, Surveyors, Engineers, Solicitors and Architects, the ‘traditional’ professions, were regarded as 'professionals'. But the times have changed and there is now a long list of people who provide a service and are considered to be professionals. This list includes the likes of IT companies, design & construct firms, media consultancies, management consultants, agricultural consultants, environmental, acoustic engineers and so it goes on. Modern reliance upon services provided by others and the increased use by business of outside consultants has increased the scope of this term and a professional is now often regarded as any person who offers 'specialist advice or service'.
What do I need to get a competitive Professional Indemnity insurance quote?
Insurers use a proposal form to assess the risk. The proposal form allows the underwriter to build a mental picture of the work being undertaken by the Professional and so assess the exposure the risk has. It allows the underwriter to identify high and low risk areas of work the clients experience in their specialist field and their approach to risk management. Tailored proposal forms are available for most of the traditional trades.
What should I consider when purchasing Professional Indemnity cover?
The best wording is full ‘civil liability’. Because this wording is so wide it typically has many exclusions such as risks like employers and public liability which should be insured separately. The most common wording is ‘breach of duty’ which will provide indemnity to the insured against ‘loss arising from any claim or claims for breach of duty which may be made and reported to the insurers during the policy period by reason of any neglect, error or omissions committed in the conduct of the insured's professional business.
You can select a limit of indemnity; the minimum for most trades is £250,000 increasing up to £5m or £10m for larger contracts. Limit of indemnities can be on an ‘aggregate’ basis (which means the limit of indemnity is the limit that can be claimed per policy year) or on an ‘any one claim’ basis which is superior as the limit applies to each and every incident. The level of policy excess is also important. It is worth noting that the excess will often apply to defence costs. Some PI providers also offer various extensions to the cover such as : -
• Dishonesty of employees
• Breach of client confidentiality
• Breach of Copyright
• Libel and Slander
• Loss of Documents
• Ombudsman Awards
How long should a Professional Indemnity quotation process take?
Although some insurers have now introduced computerised systems for quoting smaller professional indemnity policies these systems are still very much in their infancy and we normally require a full proposal form to be completed to obtain the most competitive terms from our full range of markets.
Why Choose the Insurance Provider CRS Consultants?
When looking around for Insurance of this type it is easy to put your details on the internet and search through different providers and different products as we know that no two policies cover the same levels and so by getting an independent insurance broker involved means that they will do the searching and they then will point out any clauses that they feel relevant to your risk.
CRS Consultants Ltd have built up an enviable reputation of offering high quality affordable products and are developing areas in which we feel we can go that extra mile for our customers. Our constant investment in our quality staff keeps us ahead of our competitors and ensuring that we are fully updated with any regulation changes for all types of trades means you will generally speak to a specialist in your area of expertise to marry up your proposal.
The time taken by our dedicated commercial team will assure you that no matter what you are looking for in terms of your business needs an affordable solution can be attained.