Professional Indemnity Insurance Explained - It Pays To Be Prepared

Professional Indemnity Insurance Explained - It Pays To Be Prepared

As a professional, you are expected to provide quality services within the accepted standards of your area of expertise.

But despite your best intentions, mistakes or misjudgements are bound to occur and can have serious consequences.  

Often you may not feel that you have been negligent, but that will not stop Clients suing you (or your company) should they take a different view.

Without adequate Professional Indemnity Insurance, you could be left with an expensive legal bill.

In addition to further costs in terms of paying to defend yourself in court, you would also be responsible for potentially extensive compensation costs if found at fault.

If you fail to protect yourself against this liability, the consequences for your business could be financially devastating.

Professional Liability Cover

First and foremost, you can protect yourself with Professional Liability Insurance cover.

In the event of a claim, this policy will cover defence costs in court and any monetary damages awarded to the claimant if you are found at fault.

However, just purchasing cover is not enough. You will also need to engage in effective risk management as well as report claims on first knowledge.

Reporting and responding to claims immediately by developing an appropriate response plan can ensure that you have the best chance of a favourable outcome.

Quick Incident Response Plan

Your best risk management defence is to craft a definite plan for responding to professional indemnity claims.

This will allow your Insurers to proactively handle and /or defend the incident as quickly and smoothly as possible, reducing claim cost and minimising any reputational damage.

The following elements should be addressed in your plan:

  • Report the claim to your insurer as soon as possible and following the requirements of your policy. Does the insurer accept verbal notification, or is written notification required?
  • Contact a legal professional and request that they represent you in the claim. You should determine who this is before a claim occurs. Your insurer may provide you with someone, otherwise, look for one who has experience with claims in your industry.
  • Consider gathering documents, taking notes and photographing anything relevant to the claim. When possible, this should be done in the presence of your insurer or legal professional.
  • Identify or hire an expert. The claimant will generally hire an expert witness to testify that you breached your professional duty, so you should have an expert to defend your work. This could be a third party or even someone from your firm.
  • Designate a claims management project team within your office. Who will assemble and review documents, chronicle events leading up to the claim, communicate with involved parties, attend depositions and perform other necessary duties?
  • Assemble documents and stay organised. A large claim can be very time-intensive, but the more organised you are with documents and timelines, the less it will cost you in lost hours.

FREE Insurance Review

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Our team of Gurus can Compare Professional Indemnity Insurance from over 5 insurers in minutes.  

You can request a quote online, alternatively, why not book a free review at a time that suits YOUR diary.