Professional Indemnity Insurance
Historically professional indemnity insurance has been aimed at the, architects, solicitors, surveyors, accountants and financial advisers sector. However, in recent year’s new professions such as e-commerce, programmers and internet service providers have found that Professional Indemnity Insurance is an essential part any business risk management strategy.
WHAT’S COVERED BY PROFESSIONAL INDEMNITY INSURANCE?
Professional Indemnity Insurance protects against claims for "Business Injury", which means any financial loss that claimants suffer as a result of:
- Any negligent act, error or omission.
- Implied Statutory Terms(e.g. Sale of Goods Act 1979, Sale of Goods and Services Act 1982 and other similar legislation as well as Common Law).
- Unintentional Infringement of Intellectual Property Rights.
- Loss of Documents/Data entrusted to the insured.
- Unintentional libel, slander, defamation.
- Unintentional breach of confidence, confidential duty or misuse of information.
Professional Indemnity Insurance will pay all reasonable costs incurred in the defence (e.g. legal fees) or settlement of such claims arising from the above.
WHO NEEDS PROFESSIONAL INDEMNITY INSURANCE?
Professional Indemnity Insurance is compulsory for lawyers, accountants and financial advisers. Professional Indemnity Insurance should considered by anyone who supplies advice or services such as consultancy.
PROFESSIONAL INDEMNITY CLAIMS EXAMPLES
The following examples highlight the importance of Professional Indemnity Insurance:
STRUCTURAL DESIGN ERRORS LEAD TO £110,000 CLAIM
Detailers prepared structural drawings for the erection of steelwork. It was subsequently alleged that the drawings contained errors and £110,000 was claimed for the cost of alteration and the resulting delays in construction.
TRADE NAME ADVICE COSTS AGENT £20,000
After consulting with company registration agents, a business was told that they could trade under a particular name. Following the business launch proceedings were issued by a company with a similar name and £20,000 was paid in compensation by the agents.
DEFECTIVE RENT REVIEW NOTICE COSTS ESTATE AGENT £50,000
An estate agent who missed the opportunity to carry out a rent review because of a defective rent review notice. The claim was settled for £50,000.
CONSULTANTS DESIGN ERROR LEADS TO CLAIM OF £600,000
Fuel economy consultants were allegedly negligent in their design of heating and lighting for a factory. Substantial remedial work was required, resulting in a claim for £600,000.
£4,000,000 CLAIMED FROM ENGINEERING CONSULTANTS
Consulting engineers were found to be negligent in their design of waste heating boilers. A claim for £4 million was brought for the cost of extra work and the resulting delays.