About Professional Indemnity Insurance

Anyone offering professional services owes a duty of care to their customers any body else who might reasonably rely upon the service or advice. Consumers are more and more likely to resort to litigation when it appears that professional standards have not been met.

All service providers have legal liabilities to their clients and, third parties. When action is taken to enforce these legal liabilities 'professionals' rely upon their professional indemnity insurer for advice, assistance and security.

The insurer promises to indemnify the professional against claims by clients or other persons affected by the professional's activity. The insurer will provide an indemnity to professionals for damages which are awarded against them plus legal costs of defending the claim and for costs awarded against them

Professional indemnity insurance is written on a "claims made" basis.

This means that the policy provides cover for any third party claim first made against the assured during the currency of the policy. "Claims made" cover is offered regardless of when the act, error or omission that occasioned the claim took place. However it is usual for the policy to be made subject to a "retroactive date". This means that the policy will not provide cover for claims based upon acts, errors or omissions that occurred before the retroactive date. The "retroactive date" is usually the start date of the Insured's first professional indemnity policy. Subject to negotiation the "retroactive date" can be extended back in time.