The gap between Professional Indemnity policies can be huge!
I have been fortunate enough to have spent over a decade focusing on Professional Indemnity policies and exposures.
And it is truly comparing apples and oranges!
If your business provides any form of advice, this type of policy is something that needs to be looked into. If anyone is making decisions based on your words or expertise, this is something that needs to be looked into. If someone is giving advice on your behalf, this is something that needs to be looked into.
There are many Insurance professionals that don’t subscribe to being Professional Indemnity experts. And like many areas of advice, this can be a very specialist area.
I see the following as key areas of difference with a lot of policies (this is not a definitive list, and is my opinions as an overview):
- Defence Costs in addition to the Limit of Indemnity;
- Excess applied exclusively – what this means is an excess is applicable only when a settlement has been awarded, this does not get applied if the claim is defence costs only;
- Bodily Injury and Property Damage should not be excluded. It is important to remember that Professional Indemnity is covering the design, advice and \ or specification provided by the business, this may lead to bodily injury or property damage that is not covered under other policies;
- Full Civil Liability wording;
- Broad Insuring Clause that does not inadvertently exclude Vicarious Liability;
- No crazy hidden exclusions such as “the insolvency, bankruptcy or liquidation of any party involved in the project.” This could be disastrous if someone connected to the project and outside of your control or dealings had these issues, this could make the entire policy non-responsive;
- Most importantly, strong claims payment history and willing to work with the broker to make sure the Insureds interests are looked after. It is important to keep in mind that Professional Indemnity claims and allegations can be very complex and expensive, you want the right advisers in your corner.
- And when the business finishes, the exposures don’t go away. This is where the right run-off cover needs to be implemented to protect the business, current and former directors and employees from any future exposures in relation to past advice.
An accusation of wrong doing without the right protection can lead to financial calamities, even if nothing wrong has occurred. The cost of defending such an action can cause such financial stress on the business and even personal assets of those involved.
I am always happy to discuss this topic, please feel free to contact me.