Professional Indemnity insurance provides you with cover should your client allege you have caused him financial loss due to your negligence whilst providing professional services.
This could be in the form of advice if you are a consultant, or an estimating or tendering service, maybe you provide drawings or calculations. Mistakes do happen so it makes sense to have protection and these days it is increasingly common for contracts to make professional indemnity insurance mandatory.
As insurance brokers we recommend that you read all your insurance policies and make yourself familiar with the terms and conditions but we are realistic and know that you are busy earning a living in your chosen field and may not have time to sit and read 3 or 4 policies, some of which seem to be longer than War and Peace!
Many times claims are notified too late for the simple reason the policy hadn’t been read and the person buying the insurance had no idea what circumstances would be covered. Better to make the enquiry at the earliest opportunity and then at least you can move forward with the knowledge you are going about things the right way.
We have put together a few points to remember about your professional indemnity cover and making a professional indemnity claim:
- Professional indemnity (PI) insurance is on a claims made basis which means you notify the insurer that is on cover at the time the complaint is made not the insurer on cover at the time you carried out the work
- It is a condition in all PI policies that you notify your insurer of any circumstance which may give rise to a claim. It is very important that you do not wait for a formal claim but notify your insurer as soon as your client indicates that he isn’t happy with your work. Or, maybe you realise you have made a mistake that has financial implications; it’s at this point you should involve your insurer.
- Don’t seek your own legal advice before notifying your insurer, your policy includes defence costs and if necessary your insurer will appoint a solicitor.
- Don’t enter into any negotiations or attempt to reach an agreement as this may prejudice the insurer’s position and they may decline to deal with the claim.
- A phone call to your broker is the first step. We will generally ask for a short email briefly outlining the circumstances, providing names of involved parties and copies of any relevant contracts. We will also ask you for your comments regarding their allegations. If you feel you have made a mistake then say so, it makes it much easier for us and your insurer to deal with.
Here at Caunce O’Hara we want you to get the best possible advice and protection.
If you need advice about arranging professional indemnity cover don’t hesitate to give us a call. If you have already arranged your cover and were wondering about making a claim, just call us and talk it through. We are here to help you.
If you would like a quote for professional indemnity insurance, please call our friendly team on 0161 833 2100