Professional Indemnity Insurance News

Pressure on business and professional indemnity insurance prices has been an increasing source of management focus, as the bleak and barren financial and business risk landscape of the Global Recession continue to dominate the Global and UK economic outlook.

In the past 12-24 months (2008-2009) the Professional Indemnity Insurance sector has reported biggest rises in the cost of providing liability cover in the conveyancing sector.

How best should professionals respond to the indemnity insurance market? My suggestion is to shop around. Let’s be honest, in whichever industry sector one examines, when there is concerted pressure on prices and margins the market leaders tend to squeeze the value they offer, often hiding price or rate rises in lower value packages masquerading as better value deals.

Why some pi cover in PII policies offered by Professional Associations are not always the best all round offer. Contrary to a common perception most industry associations might not always be the Professional’s best source of fully comprehensive indemnity cover due to a number of reasons. Firstly trying to please too many members by offering standard levels of cover. Secondly, not being insurers themselves it is a possible scenario of missing key indemnity cover changes and thereby falling short of providing full rounded protection. Complacency can be an expensive mistake, as my example below highlights.

I was speaking with a solicitor today, who had been ruined 3 weeks ago. His partner had been siphoning off money from client accounts, and had been highly sophisticated in hiding his illicit activity. The results are devastating. The victims are not solely the clients, who will be covered by Law Society indemnity, but also the unfortunate partner. The Law Society, far from protecting the injured party have as a precaution temporarily suspended the solicitor from practicing. Which organisation is best placed to look after the interests of the client? I don’t know about you, but I would feel safer with an independent specialist, an expert at professional indemnity cover for my profession, and someone who would work hard on my behalf.

In conclusion, with a matter of such fundamental and far reaching consequences it certainly does pay to shop around, even if in the end you cannot bring yourself to insure yourself under any other indemnity policy other than the one specified by your trade association; but be warned.

In the example quoted, the solicitor is being advised to go bankrupt as the best way to resolve the issue. Despite this he will still be unable to practice law for a further 18 months minimum. I know him personally. I can vouch for his integrity, and professionalism. His only error was being a little too trusting of his partner of the firm of the past 20 years. There might be a claim against the auditors, though the situation developed so quickly that it is unlikely that there would be a claim against them.

It is precisely cases like this one, where it pays not only to get a good price, but to get top level cover. In fact, the moral of any story involving a Professional Indemnity Insurance (PII) claim is to make sure that Professional Indemnity Cover really does cover all eventualities’, providing full levels of cover, and then and only then seeing what the best price is for that policy.

One of the quickest and most effective ways to consider the PII options is to search online. A free online service like the one offered by a leading website Business Professional Insurance allows consumers (Professionals) to receive quotes for a number of leading UK Indemnity providers all members of the Association of British Insurers.

Management consultants are highly in demand by businesses that requires consultation that will help in various aspects of their business. The main job of a management consultant is to provide advice to a business and his field of work is diverse and varied, often being complex. With complexity comes stress which could result in professional negligence of a particular part of the job.

Although management consultants need to take care of the legal aspects of their clients, they also are in danger of being liable for the damage or negligence that they cause, although it could be unintentional. Even the most reputable of management consultants can find themselves caught in the middle of a litigation battle when in dispute with a client over a small mistake or issue that was probably overlooked.

With professional indemnity insurance on their side, management consultants can be rest assured that all their legal expenses will be taken care of.

Although there are several insurance brokers that you can contact via a directory, finding one over the internet has become much simpler now. Those days of prolonged waits and lengthy paperwork are long gone; sometimes you would have a claim even before a policy was taken. With the internet and the pc, it is now only a matter of time that you can get PII coverage. Prices of Professional indemnity insurance can be got within a few minutes and clicks that you could count on your fingers.

With just a few clicks of the mouse, you can learn a lot about the insurer, their policies and if they can tailor it according to your profession. Prior to the internet it would have taken several days to complete these steps that you can now complete in a matter of minutes. This will let you determine a figure that is more suitable to you and will also know of what you need to pay.

The level of service offered by Business professional insurance online means that business consultants can now access the approproate level of cover, depdendent on turnover, number of consultants on the books, and client business sectors, in under an hour from initial request to policy cover to commence.

There are important aspects to working as  professionals (accountants, solicitors, medical consultants and specialist) and business advisers, as well as freelancers, contractors, agents etc . Please ask the respective professional indemnity insurer to provide you with advice, particularly about in the event of a claim, as often the claim referrs to a previous indemnity insurance period.

Construction contractors are those who work in the building trade and make their living of the same. It is easy therefore for construction contractors to be slapped with litigation if at all a client is not satisfied with the job done, or if the construction work has resulted in harming the client. Although construction contractors are licensed, they could sometimes make mistakes and cause errors in a project without having any personal reason to do so.

Personal indemnity insurance for construction contractors helps cover them incase there is a legal case issued against them. It takes care of their legal expenses and also expense that they might have to incur towards the client incase they loose the legal battle. The skill areas covered are construction managers, contracts managers, fire safety audits, projects managers, site engineers, structural engineers, Electrical engineers, highway engineers etc.

Professional indemnity insurance works on the principle of “claims made” rather than “occurrence basis”. The coverage in” claims made policy “is applicable only if the claims are made known to the insurers within the policy period. Once the coverage period has ended the insurers will not prove you coverage incase of any claims made. Even if that particular event for the claims made happened during the time the coverage was applicable.

Let’s look at this with an example; if you were working for a construction company and have gone ahead and retired from work life. You could possibly get a claim against you for the services you provided during when you were working. The professional indemnity policy in this case will not be applicable and the insurers will not cover your claim. In this type of situation the “Run off cover” will help give you the required coverage only if the claim is from the time the run off insurance was existent.

Only the business knows the kind of issues that it could face better than anyone else. Since no two businesses and risks faced are the same a single type of insurance cover does not benefit all. Ideally a business should buy enough PII cover that they can afford.

Depending on the services that a business provides, clients set a limited bar required for coverage. If the services provided are contractual in nature the coverage for their service providers are also restricted. Most countries require the consultant as well as the contractors to have a minimum coverage to safeguard their business.

Some insurers allow a cover called retroactive cover, which is a recommended cover for all business as this cover insures that all liable areas that a business might suffer from are covered. Retroactive coverage helps cover all of the work that was done much before the cover was applied for.

Basically all types of business that earn a profit or income and who basically are into servicing clients require professional indemnity insurance. Those working in the finance field often opt for professional indemnity insurance so that they can operate their businesses without any fear. Large and small business professionals like web designers, medical practitioners, financial planners, law firms, marketers etc can all apply for PII. With PII they are well protected and can be rest assured that they will not loose their money if ever a client files for legal action against them.

Professionals like graphic designers, engineers etc who work for a fee also can apply for professional indemnity insurance. As in their profession it is easy for them to commit a mistake because of which they could loose money.

PII is good for those who render services and they could be from any field or profession. With PII they can be rest assured that they will be covered if at all they commit a professional error.

Welcome to Indemnity Insurance News blog dedicated to information surrounding the insuranc that saves the bacon of hard working management consultants and delivers them peace of mind.