Professional Indemnity Insurance

Professional Indemnity Insurance is essential throughout all professions. A professional service provider owes a duty of care to their customers and to anybody else who may reasonably rely on the service or advice. Customers are more likely to initiate litigation proceedings when it appears that professional standards have not been met.

All professional 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.

A Professional Indemnity insurer indemnifies the professional against claims by clients or other persons affected by their activity. The insurer provides 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 which means that the policy covers any third party claim first made against the assured during the current policy. "Claims made" cover is offered regardless of when the act, error or omission that occasioned the claim took place. It is also usual for the policy to be made subject to a "retroactive date" stating that the policy will not provide cover for claims based on 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. It is possible for the "retroactive date" can be extended back in time buy negotiation.