Back to Basics
A Series of Articles That Provide The Fundamental Principles of Professional Indemnity Insurance
Professional Indemnity Insurance (PII), also known as Professional Liability Insurance (PLI) has been around for quite a while now, but if you have been purchasing PII products without understanding the fundamental principles of the insurance coverage, then our series of ‘Back to Basics’ articles is for you.
Before we get into the nitty-gritty, it’s important to appreciate the simplicity of what Professional Indemnity Insurance is there to do.
“It focuses on alleged failure to perform on the part of, financial loss caused by, and error or omission of
professional advice-and service-providing individuals and companies from bearing the full cost of defending against a negligence claim made by a client, and damages awarded in such a civil lawsuit.
Longer established occupations such as Accountants, Surveyors, Solicitors and Architects were the original ‘professionals’. But increasingly, the definition of ‘Professional’ is increasing in scope and is now catering for any person or business seen to provide specialist advice or services.”
The difficulty is that each professional will have their own legal framework to work within, along with increasing complexity dependent on the regulation in force, how it’s adopted and where (Country) it is being adopted from.
Back to Basics – Article One: “Claims Made” Cover
One of the key differences between your Professional Indemnity Insurance (PII) and most other insurance policies that your company may hold (i.e. Employer’s Liability or Public Liability), is the fact that PII cover is provided on a “Claims Made” basis.
This document will cover:
- What does “Claims Made” actually mean
- What do you actually need to refer to Insurers
- Key Points To Take Away
Back to Basics – Article Two: Professional Indemnity Insurance – An Overview
This document provides an insight into the workings of what a Professional Indemnity Insurance policy is and who needs it. A must-read for anyone who is new to this type of insurance coverage.
Back to Basics – Article Three: Notification of Claims
It is important to ensure that any claims or potential claims are notified to your insurers as soon as you become aware of them. This document provides information on when and how you should go about notifying a claim under your Professional Indemnity Insurance policy.
Back to Basics – Article Four: Settlement & Insurers Consent
When you receive a claim, especially if you are still undertaking work for the Client, there may be the urge to try and nip things in the bud and come to a settlement with the Client. However, while this approach is laudable, you may also run the risk of falling foul of the terms and conditions of the policy which in turn could jeopardise any cover that could be provided for the claim. Read this document to better understand your obligations.
Back to Basics – Article Five: Co-operating with your Insurers
This document deals with the requirement and reasonable expectation for policyholders to co-operate with insurers when notifying and dealing with the claim under a Professional Indemnity Insurance policy.
Back to Basics – Article Six: Disputes with your Insurers
Unfortunately, the world is not always an ideal place and, at times, you may find that you and your Insurers do not see eye to eye on the conduct of a claim. There can be a variety of reasons for a dispute arising, and these can range from a simple disagreement over the most cost-effective way to resolve matters to full-blown disagreements as to the facts and conduct of the claim. This document looks at how to deal with disputes when they arise.
Back to Basics – Article Seven: Reservation of Rights
From an insurance perspective, one phrase that we hope to never see in connection with a claim is “Reservation of Rights” or “ROR” for short. However, an ROR can come in one of two flavours, and this document we will consider each in turn.
Back to Basics – Article Eight: Retroactive Dates
While the key dates on your professional indemnity insurance policy will be the start and end of that particular policy period, another important date that can impact on your position is the ‘retroactive date’. This document examines what is a retroactive date, what it means and what can be done to ensure your business is not exposed.