About Professional Indemnity Insurance

Professional Indemnity Insurance (PII) is a type of coverage that provides protection to professionals against claims made by clients or third parties for financial losses resulting from alleged negligence, errors, omissions, or breaches of professional duty in the course of their work. It’s especially relevant for professions that offer advice, consulting, or other specialised services.

PII helps professionals cover legal costs, settlements, or damages that might arise due to alleged mistakes or failures in their professional services. This insurance is common in fields like law, medicine, architecture, engineering, accounting, and consulting, where the advice and expertise provided can have significant financial implications for clients.

The coverage amount of PII policies varies based on the profession, the size of the business, turnover and the potential risks associated with the services provided. It’s important for professionals to carefully review policy terms, coverage limits, exclusions, and premiums before selecting a policy that suits their needs.

Which insurer will cover the claim, will it fall on the insurer at the time of the incident or when the claim was made?

Professional indemnity is designed to cover incidents on a claims made basis, and not on a claims occurred basis. The insurance operates retrospectively, essentially meaning that any claim will be dealt with (subject to the incident meeting the policy’s terms and conditions) by the insurer who is holding cover at the time of when the incident was first notified to the insurer, no matter how long ago the act, error, omission or breach occurred. This is why it is essential to ensure that your retroactive date (which should be located near where your indemnity limit, jurisdiction and geographical restrictions are displayed on your policy schedule) is back dated far enough to cover you adequately. Please note, if your retroactive date states ‘none’, the insurer will provide full retrospective coverage.