| FAQS
: Professional Indemnity
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> What level of cover should I buy?
> What is the limit of indemnity?
> What is the Excess (insured’s contribution?)
> My policy says that cover is on a ‘claims made basis’ – what does this mean?
> Will I be covered for work undertaken prior to the inception date of my PI policy?
> Am I still covered if a claim arises from an employee or a consultant working for me?
> Am I covered to undertake work outside the UK?
> What is the definition of North America?
> Can I increase the Limit of Indemnity mid-term?
> How do I cancel the policy?
> What is the definition of Employee?
ANSWERS:
What level of cover should I buy?
Every business is unique, so when considering how much cover to buy we would always recommend that you consider the exposure that your business faces each day. The exposure could, for example, be influenced by the type and size of contracts and projects you are engaged in or the type and size of clients who you undertake work for. Sometimes clients will impose minimum amounts of cover that they expect you to arrange. We always recommend that you purchase as much cover as you can afford. Often, premiums become better value when more cover is purchased.
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What is the limit of indemnity?
This means the maximum payable by Insurers in respect of a claim. Unless otherwise stated, costs incurred in the defence or investigation of a claim will be paid in addition to this figure.
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What is the Excess (insured’s contribution?)
This is your contribution to the amount of a claim. It generally applies to each and every claim.
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My policy says that cover is on a ‘claims made basis’ – what does this mean?
PI is different to most other insurances in that it operates on what is known as a ‘claims made basis’. This means that the policy will only provide cover for claims or circumstances discovered and notified to the Insurer during the period of insurance, rather than errors or mistakes occurring during the period of insurance. Therefore, it is
essential that you maintain continuous insurance as, once the policy expires, so does your cover.
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Will I be covered for work undertaken prior to the inception date of my PI policy?
The Insured (as named in the Schedule) is covered for work undertaken prior to the inception date of the policy. However, for cover to apply, it is vital that all trading names, past and present, and which were used in connection with the insured business activities stated in the proposal form are noted under the policy.
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Am I still covered if a claim arises from an employee or a consultant working for me?
Yes, the policy will cover you for claims arising from work undertaken by employees or consultants working under a contract of service in connection with the professional business.
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Am I covered to undertake work outside the UK?
Yes, you are covered to undertake work outside the UK, providing that no more than 25% of your fee income is derived from this work and that all work undertaken is subject to English law and UK jurisdiction applying. However, work undertaken in North America and Canada is specifically excluded.
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What is the definition of North America?
This means the United States of America and Canada and in each case its territories and possessions and any state or political sub-division thereof.
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Can I increase the Limit of Indemnity mid-term?
You can make changes to your policy at any time but it is standard practice for the Insurer to require a completed no claims declaration when the limit of indemnity is increased. We would be happy to assist with any enquiries that you have in this regard.
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How do I cancel the policy?
The policy can be cancelled at anytime but we would ask you to confirm your cancellation instruction in writing. It is essential that you remember that if you do cancel your policy, the ‘claims made’ nature of the cover provided only covers claims or circumstances that are discovered and notified during the period of insurance. Therefore,
if someone makes a claim against you for work you did for them when the policy was in force, if the policy is cancelled, you will no longer be able to claim against the cancelled policy as all cover has ceased.
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What is the definition of Employee?
Employee means any person including any trainee or consultant under a contract of service with the Insured or the Predecessors in respect of Professional Business at the time of any conduct giving rise to a Claim against the Insured or at the time of any other occurrence which may be the subject of indemnity under this Insurance
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