The Assigned Risk Pool (ARP) is essentially a safe haven for solicitors who have not been able to obtain Professional Indemnity Insurance in the open market. In October 2011 the amount of time that a firm can remain in the ARP was reduced from 12 to 6 months and from October 2012, the ARP will be funded jointly by insurers and solicitors, with liability for claims arising from firms who have not taken out insurance moving from the ARP to the Compensation Fund. The ARP will be replaced in October 2013 with a system where insurers offer a 3 month extended policy to firms who cannot obtain Professional Indemnity for the following year to allow them extra time to find an alternative insurer.
Archive for April, 2012
A new report by the Insurance Industry has shown that nearly one third of UK small businesses have admitted that they only purchase the minimum amount of insurance cover required, whether that’s for property or transport or is a compulsory form of insurance such as Employer’s Liability Insurance. Only 21 % had Professional Indemnity cover in place. This stresses the importance of using a broker to advise an SME on the appropriate covers and to help out with Risk Management advice.
There has been a recent landmark judgement handed down on 28 March 2012 in that the supreme court has allowed the appeals of Zurich Insurance Plc, Employers and victims on the meaning of certain Employers Liability Insurance policies in relation to their application to Mesothelioma claims. The supreme court also dismissed the appeals of Excess, Independent, Municipal Mutual Insurance and Builders Accident Insurance, who were contending that their policies responded to such claims only if the date when the Tumour became established in the body was during the period of insurance and did not respond if the exposure to Asbestos occurred during the period of the policy.
If you are in the business of selling your knowledge or skills you may want to consider taking out Professional Indemnity Insurance, as this can protect your business against claims for loss or damage made by a client or a third party if you make a mistake or are found to have been negligent in some or all of the services that you provide. Professional Indemnity Insurance also covers legal costs involved in defending a claim.
Many professionals are required to have Professional Indemnity insurance cover to satisfy the requirement of their Professional Trade Body. This includes, Insurance Brokers, designers, architects, accountants and solicitors.
An important aspect to consider when purchasing Professional Indemnity Insurance is that the cover is usually on a claims made basis, meaning that the policy will only cover claims that are made when he policy is ‘live’. Therefore if you plan to cancel your policy when you close your business or retire then you may need to arrange ‘Run off’ cover for a period of time afterwards.
Professional Indemnity Insurance can be called by different names depending on the profession involved. This is often referred to as Medical Malpractice Insurance when linked to the medical profession. It is often known as Errors and Omissions insurance when we talk about negligence involving Consultants, Brokers and Lawyers.
Professional Indemnity Insurance is purchased by a wide range of professionals ranging from the Accounting and Financial Services professions through to the Construction professions where the scope of work could involve Design and Build.
Common claims that Professional Indemnity Insurance covers are Negligence, misrepresentation, violation of good faith, fair dealing and inaccurate advice.