Professional Indemnity Insurance Broker
Professional Indemnity Insurance protects professionals who provide advice or services to their customers. It covers your business against legal costs and claims by third parties for damages arising from acts, omissions or breaches of professional duty.
What is Professional Indemnity Insurance?
Professional Indemnity policies indemnify insured’s for amounts which they become legally liable to pay as a result of any actual or alleged negligent act, error or omission in the conduct of their business or profession. Costs and expenses incurred to investigate, defend or settle any claim are also included, in some circumstances in addition to the policy limit, otherwise inclusive of the limit. A professional person is someone who has acquired a specialised skill and undertakes for a fee to perform certain tasks or provide specific advice to a third party. Examples of professional people include Health Practitioners, Solicitors, Accountants, Engineers, Architects, Financial Planners, IT Consultants, Management Consultants, Real Estate Agents, etc. In Australia, professional people or professional organisations owe a high level “duty of care” to third parties that rely upon their service and expertise. A duty of care is a legal obligation imposed on a professional requiring that they adhere to a standard of reasonable care when providing advice or a service that could foreseeably harm others financially, physically or mentally. A Professional indemnity policy may also cover claims for:
- Breach of the Competition and Consumer Act
- Intellectual Property breaches
- Privacy Act Breaches
- Employee Theft
- Loss of Documents including electronic data (and the cost or restoring data)
- Contractual Liability
- Statutory Liability
- Employment Practices Liability
- Legal Costs to attend an Inquiry
- Public Relation Expenses
“I thought I was covered for that”
Always make sure you disclose all your business activities to your broker as too often PI claims are declined because the business activities have been noted incorrectly.
6 years is a long time !
Under current legislation a client has up to 6 years to bring a claim against you. This means you need to retain Professional Indemnity insurance even when you sell or retire from the industry. This is called run-off cover and without it you’re financially exposed.