Professional Indemnity Insurance essentially covers those claims involving a breach of professional duty or negligence resulting in financial loss to a 3rd party.

This insurance covers both the cost of claims for compensation as well as those costs to defend the claim. The cost of defending a claim can be significant, regardless of whether the claim is justified.

Any businesses, individuals or consultants who provide opinions, advice or other professional services to their clients are exposed to different elements of ligation involving any errors from the advice or service they provide.

How does it work?

You are covered if you provide any professional service involving specialist knowledge or expertise including complaints made against you to your professional body. You are also covered against civil liability for professional negligence, breach of contract, misrepresentation, Breach of the Fair Trading Act, defamation, unintentional breach of intellectual property rights, and dishonesty of employees.

What do I need to know?

In setting up a Professional Indemnity policy here are some important points to consider:

• We think a professional indemnity policy needs to be set up with the right advice by an experienced and qualified insurance broker.
• We need to understand your business, your activities and what your main exposures are.
• A completed Professional Indemnity proposal form is vital in collecting and recording the information we need to share with underwriters and insure you correctly.
• We review any contractual terms, agreements or relationships you have with your clients, suppliers and/or other parties who have requested you obtain Professional Indemnity insurance.
• It is important that any contractual terms are understood and they don’t overstep what the Professional Indemnity policy will and won’t respond to.
• It’s important that your business activities are correctly stated and reviewed often. Our main concern when a claim is notified to us is does the detail of the notification fit within the activities stated on your policy? If they don’t it can cause us an issue.
• It’s also important that you understand and review the activities shown on your policy and make sure they match up with actual and current trading activities. Talk to your broker about any amendments.

Within the Professional Indemnity market, we find certain insurers have various appetites for certain industries and exposures. It’s our job to match your business with an insurer that understands your industry and can respond effectively to any claims that arise. Many Insurers have separate legal panels and 3rd party advice agreements to support clients with certain claims. This is an important aspect in choosing the right insurer for you.

Finally, when you do have an issue or potential claim it is very important you tell us straight away. It becomes a very difficult situation to manage when we have a last-minute notification and the insurer feels prejudice by that late notification.

If you’d like to know more about Professional Indemnity Insurance please contact your AIB Group Insurance Broker for more information or by sending an email to [email protected].