Professional Indemnity Insurance Broker
Professional Indemnity Insurance Broker
What is a Professional Indemnity Insurance Broker?
A Professional Indemnity Insurance Broker is an expert in identifying and securing tailored insurance cover that is tailored to meet the unique needs of your business.
Their role is to ensure that your company is comprehensively protected against potential claims that could arise due to the professional advice, recommendations, or professional services you provide.
If such advice, recommendations, or services lead to a financial loss for your clients, you could find yourself facing legal claims for breach of professional duty.
What is Professional Indemnity Insurance?
Professional indemnity insurance protects individuals, businesses, and their employees from the financial burden of claims and allegations made against them due to the advice or recommendations given. It also covers for an actual or alleged breach of professional duty. If you’re a business that provides advice, you may benefit from protecting your business with a Professional Indemnity Insurance Policy.
A Professional Indemnity policy can cover the legal costs, compensation for damages, and other losses incurred as a result of defending your business in court for actual and alleged claims of negligence.
What does Professional Indemnity cover?
Professional Indemnity Insurance can offer general protection which may include cover against:
The implications of unintentional errors can vary significantly depending on the context and the nature of the work being carried out. In some cases, these mistakes might have minimal impact, easily corrected with little to no consequences. However, in other instances, even a small oversight could lead to more significant issues, potentially causing financial loss to a client.
When a client misunderstands advice from a professional, it really shows the importance of speaking clearly and keeping good records in any professional setting. Mistakes in understanding can happen in many fields, such as law, finance, healthcare, or in general businss. These mix-ups can come from using too much jargon or assuming the client knows more than they do. All of these examples can result in losses to your clients.
An example of a copyright Professional Indemnity claim could be when a business uses images or music sourced from the internet, assuming they are free to use. However, the content is copyrighted, and the original creators sue for copyright infringement. Professional indemnity insurance would cover the legal fees and any damages owed to the copyright holder.
What is typically not covered?
Personal Injury claims that result from the advice you’ve given
Intentional Acts including defamation, slander, libel
Claims made if you don’t have an active policy in place;
Prior Known Circumstances
Industry specific exclusions that the insurer have applied
Undisclosed Activities
Work done before your retroactive date
Activities done outside of your insured jurisdiction
Is Professional Indemnity Insurance Compulsary?
Certain professions must have professional indemnity insurance to operate legally. This insurance is crucial for lawyers, accountants, engineers, real estate agents, and financial service providers, like mortgage and finance brokers. They need to show proof of insurance to their professional associations to conduct their business.
While not mandatory for all professions, such as consultants, having professional indemnity insurance is strongly advised. It’s particularly important for anyone offering advice that might lead to financial losses for their clients. This insurance can protect against legal claims, safeguarding your reputation and ensuring you can continue providing valuable advice with confidence.
How Morgan Insurance Brokers can help you
Professional Indemnity policies can be confusing. We should be your preferred Professional Indemnity Insurance Broker. Morgan Insurance Brokers translate your cover into easy to digest terms so you’re only insuring for the cover you need, and not paying for cover you don’t.
Just like you, we are highly experienced and experts in providing advice to our clients. Engaging Morgan Insurance Brokers will provide you with peace of mind that your day to day business activities are covered by an insurance policy that is going to respond when you need it to.
Frequently Asked Questions
Professional indemnity insurance cover can range in price depending on many different variables. The main contributor to an expensive policy is if the advice given would result in a physical injury, or a large financial loss to your client. The other contributing factors which drive the insurance premiums are your annual turnover, how many employees are giving advice, and the limit of liability you’d like to insure.
Professional Indemnity Insurance, also known as Errors and Omissions Insurance, provides essential coverage for professionals across various industries. This type of insurance offers protection against claims made by clients for negligent acts, errors, or omissions that occur during the course of providing professional services. Both terms refer to the same type of insurance, offering the same benefits and scope of coverage to safeguard professionals from potential legal costs and damages.
Morgan Insurance Brokers can evaluate the type of clientele you work with, and what your likely exposure would be if your work resulted in your clients suffering a financial loss.
Legal fees are covered under a Professional Indemnity policy. However, the amount that your insurer contributes is dependent on the type of cover you select. If you have insured for a Professional Indemnity policy that is “costs in addition”, then your policy will pay for the legal and defence in addition to the policy limit that you’ve selected. If you have insured for “costs inclusive”, then your policy will only pay up to the limit of liability that you’ve selected, with defence and legal fees being deducted from the insured sum. Legal and defence costs can be costly, so where possible it’s in your best interest to obtain a policy that is “costs in addition”.
Professional Indemnity Insurance policies will have a standard excess to all compensation claims paid.
If you have a Professional Indemnity Insurance Policy that has a “costs inclusive” excess this means that you will have to pay the standard excess if there were any legal and defence costs incurred, regardless if there was a settlement claim for compensation. A “costs exclusive” excess means that you do not need to pay an excess if the only costs incurred are legal and defence fees, and where there is no compensation claim.
A “costs exclusive” excess is more favourable and is standardly available. Where it is not always available is for
industries where they may incur a high frequencies of claims, such as a real estate agent, or property management business. For these industries, the insurers will most likely offer a “costs inclusive” excess.
Professional Indemnity insurance Policies are structured on a “claims made basis”. What this means for you is that when you are first notified by a client of a potential scenario that could result in a claim, you should consider letting your insurance company know. Professional Indemnity Insurers require you to notify them of the actual or alleged claim scenario when you first become aware of it so they can intervene immediately. With their help, they can mitigate the risk before it progresses, thus potentially preventing a claim. If you fail to notify the insurer within your policy period, you may forfeit your cover.
Professional indemnity insurance policies are designed on a “claims made basis” meaning that in order to make a claim, you have to have an active policy in place at the time that the claim is brought against you. If you cancel your policy, you are forfeiting all cover for any of your previous works. In order to protect yourself, you should consider restructuring your policy to a “run off” policy.
No, professional indemnity insurance and public liability insurance are not the same.
Professional indemnity insurance is designed to protect professionals who provide advice or services to their clients which if the incorrect advice or a failure to provide a service can lead to financial losses.
Public liability insurance, on the other hand protects yuo for third-party claims of personal injury or property damage.
In some cases, Public Liability Insurance policies can be supplemented with an Errors and Omissions extension. This addition enhances the policy, providing broader protection that covers not only third-party bodily injury and property damage but also specific professional errors or omissions that could lead to financial loss for the client. Opting for this extension can be a strategic decision for professionals seeking comprehensive coverage, ensuring that they are well-protected against a wide range of potential claims.
Professional Indemnity insurance will protect your business including your employees for claims brought against them for breach of professional duty, advice and recommendations that they’ve provided that results in a financial loss.
No, Professional Indemnity and Directors and Officers are different insurance products.
Directors and Officers is a component of a more comprehensive Management Liability Insurance policy. This type of insurance is specifically crafted to offer protection to directors, partners, and shareholders of a company against claims alleging mismanagement. These claims can arise from a variety of sources, including shareholders, employees, customers, or regulatory bodies, and typically relate to decisions or actions taken by the management that are perceived to have negatively impacted the company or its stakeholders.
Professional Inmnidety Insurance is a cover that will provide protection for claims that have resulted in financial loss to a third party as a result of th advice and recommendations you’ve provided to them.
