Professional Indemnity Insurance

Professional Indemnity Insurance

What is Professional Indemnity (PI) Insurance?
Trade Practices & Related Legislation
"Claims Made" & Retrospective Liability
Why do you need PI insurance?
How to apply

What is Professional Indemnity (PI) Insurance?

Appropriate PI Insurance indemnifies insured persons against damages awarded against them by a Court, or resulting from an approved negotiated settlement, in relation to an act, error or omission in the conduct of their business which breached the professional duty of care owed. It also covers the costs and expenses of defending claims of negligence on their part or the part of a party acting on their behalf.

Trade Practices & Related Legislation

An increasing number of legal actions brought against the professional include, as an alternate "pleading", allegations that the professional misled, or deceived the aggrieved party. Because allegations of this nature do not actually claim negligence as the cause of loss any resulting award for damages made against the insured professional may not be covered by a standard professional indemnity insurance policy. It is essential that your PI Insurance contains this cover.

"Claims Made" & Retrospective Liability

PI Insurance is underwritten on a "claims made" basis which means that you must have a current policy in force at the time a claim is made against you. It will only respond to a claim made under it during the specified period of insurance. However, a PI Insurance policy does offer indemnity in respect to work performed prior to inception of the insurance, provided that you have Retrospective Liability cover. Check your policy to see what protection you have.

Why do you need PI insurance?

You may feel that because your work is supervised by others, you do not need PI Insurance, but please consider this:

Defending a claim of "negligence" usually involves seeking specialist legal advice and costs can very quickly mount up. You could expect to pay, for your own legal costs alone, $15,000 per day should the claim end up in Court. On this basis, the cost of defending a claim can very easily become a financial nightmare for the uninsured professional person. Executive Coaching professionals have been held to be negligent even though their work was supervised by the principal by whom they were "employed". In some of those instances the principals own PI Insurance did not protect the Executive Coaching professionals. Many government bodies, local authorities and private consulting firms now insist that the professional contractors and consultants with whom they deal carry PI Insurance. Everything a professional person does and says in the course of their business could result in a professional liability claim. In the present climate, spurious claims of negligent advice are being made with the aim of delaying the payment of professional fees. You might know that the claim is spurious, but you still may need to defend it. Remember, Civil Courts operate on the balance of probability principle, rather than the level of proof required in Criminal Courts.

How to apply

For an obligation free quotation please phone 1800 245 123, or alternatively you can complete the form below and a member of our team will contact you shortly:

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