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Archive for 2012

Professional Indemnity Insurance – A Few Facts

Monday, April 16th, 2012

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.

Hensure Business Insurance can help to arrange the cover for a wide range of weird and wonderful trades and professions.

Public Liability – A Few Facts

Wednesday, March 28th, 2012

If you have members of the public or clients coming to your premises, or you go theirs, then you should consider taking out Public Liability Insurance.

Public Liability Insurance will cover you for any awards of damage given to a member of the public because of an injury or damage to their property caused by you or your business. It also covers any related Legal Fees, Costs, Expenses and Hospital treatment if needed.

Public Liability is not compulsory insurance but in today’s ever increasingly litigious society it is wise to consider taking out this insurance .

You will also find that many of your clients and potential clients will want to see proof of adequate insurance cover before they let you work from them.

Professional Indemnity Insurance- Aggregate or Any one Claim Basis

Tuesday, March 20th, 2012

Professional Indemnity Insurance can be arranged either on an Aggregate basis or an Any One Claim basis. It is important that the difference between these 2 types of cover is understood as this could have a severe impact in the case of a large claim or if you were to incur multiple claims within and one policy period.

Aggregate Basis- with this type of cover all claims are paid out of a specified Limit of Indemnity and this reduces the amount available for subsequent claims.

Any One Claim Basis- with this type of cover all claims made during the year are entitled to the Full Limit of Indemnity. However all claims arising from the same occurrence would be regarded by insurers as one claim.

Professional Indemnity Insurance- Limits of Indemnity

Monday, March 19th, 2012

When buying a professional indemnity insurance policy it is necessary to choose the Limit of Indemnity that you consider will be necessary to cover the risks faced by your business.

It could also be the case that your are obliged to buy a certain levels of cover as instructed by your relevant professional body, or to satisfy the criteria set out by the Principal Contractor under a contract before you can deal with them.

The Limit of Indemnity is the maximum amount of money that a Professional Indemnity policy will pay out.

Costs and Expenses in Addition– this simply means that any costs and expenses incurred in investigating or representing you in defending the claim would be paid in addition to the amount of damages awarded to the third party, and further that the costs and expenses would not count towards the limit of indemnity

Professional Indemnity Insurance- A Long Term Commitment

Thursday, March 8th, 2012

We have a number of clients who take out Professional Indemnity Insurance to fulful the terms and conditions of a contract and then at renewal of the policy try and cancel the cover because the contract has finished.

At this stage we always advise our clients to keep the policy in force.

Professional Indemnity Insurance is there to cover all the past work that has been done for your clients. The basis of the cover is that of a ‘Claims Made’ policy.

In other words the policy that is in force at the time of the claim is the policy that will deal with the claim. If the cover has been allowed to lapse then basically the claim will not be covered and any client will have to deal with the claim out of their own pocket.

A lot of these negligence type claims tend to be very complicated and also involve large legal fees in defending the claim.

Without the appropriate Professional Indemnity Insurance still in place, it is more than likely that a small firm would be put out of business defending the claim.

New Professional Indemnity Facility on Powerplace

Thursday, March 1st, 2012

Powerplace have announced that Brit Insurance have joined their panel of Insurers and that brokers can now access Professional Indemnity quotations through the Powerplace site.

This is a great development for Hensure Business Solutions and will allow the team to access another of our Partner Insurers for a quick turnaround of Professional Indemnity Quotations.

Architects Professional Insurance

Wednesday, February 15th, 2012

Architects are regarded as one of the traditional professions. The profession as a whole is regulated by the Architects Registration Board (ARB). Architects PI insurance became mandatory for all qualified Architects in 1997.

Whilst the ARB is the governing body for the profession the Royal Institute of British Architects (RIBA) is perhaps the best known organisation representing the industry. All Architects must be registered with the ARB and it is the ARB which lays down the rules for Architects PI (see www.arb.org.uk).

Architects need to be a member of RIBA in order to obtain Chartered Status. Architects are involved in all aspects of planning, designing and supervising the construction of buildings of all types.

Insurers take into account a number of factors when underwriting a risk.

These include;

  • Practice Size – The number of partners and staff as well as the gross annual income of the firm.
  • Qualification and experience – Underwriters will want to satisfy themselves that an architect is suitably qualified and/or experienced to carry out the work undertaken on behalf of his client.

The usual cover;

  • Usually the limit of indemnity will be “any one claim” with legal costs in addition.
  • The excess will not normally apply to insurers’ costs and expenses.
  • If the cover is on a civil liability basis, then the cover would normally include negligence, liability for dishonesty, liability for lost documents, libel and slander and breach of warranty of authority.

Bare in mind if the practice ceases, partners must ensure that they purchase run-off cover for at least six years. The limit of indemnity must be maintained at the highest level in the preceding three years to the cessation of the practice.

For more information regarding Architects Professional Insurance please see here.

Consultants Professional Indemnity Insurance

Tuesday, February 14th, 2012

Professional Indemnity (PI) Insurance is an insurance cover designed to protect a business offering professional advice or services.

Traditionally this insurance has been taken out by professions such as Accountants, Architects,  Surveyors,  Engineers etc. However this now includes a wide range of people who also provide a service and are considered to be Professionals. This  includes IT Consultants, Business Advisors, Consultants, Marketing Consultants, Management Consultants, Recruitment Consultants, P R Consultants, Health and Safety Consultants, Training Consultants and many more.

PI Insurance also protects against claims for damage to your client’s business, which means any financial loss that they suffer as a result of:

  • Any negligent act, error or omission
  • Breach of Implied Statutory Terms under the Sale of Goods Act 1979 and Supply of Goods and Services Act1982
  • Unintentional Infringement of Intellectual Property Rights
  • Loss of Documents or Data entrusted to the insured
  • Unintentional defamation (libel & slander)
  • Unintentional breach of confidence, confidential duty or misuse of information.

Professional Indemnity will pay all reasonable costs incurred in the defence (i.e. legal fees) or settlement of such claims arising from the above.

Please note if you already hold PI and decide to change insurer at renewal you MUST ensure that the new policy has RETROACTIVE COVER built in to cover the work carried out in the past that was insured by your previous policy.

There are some other points you should be aware of, these can be seen within our full article here.

Architects PI Insurance – Collateral Warranties

Monday, February 6th, 2012

What are collateral Warranties?

Collateral Warranties or Duty of Care agreements are contractual agreements between parties who otherwise might not be in a contractual arrangement.

The Reason for Collateral Warranties.

The collateral warranty boom began in the late 1980’s following the House of Lords decision in D & F Estates v Church Commissioners in 1988. During the previous 15 years the courts had shown an increasing readiness to award damages against negligent contractors and consultants without the claimant having to demonstrate that he had any contractual rights. After the decision in D & F Estates it was clear that owners and occupiers of buildings needed a contractual remedy in order to pursue claims for certain types of losses and this was provided by collateral warranties.

Forms of Collateral Warranty

Standard forms published by the British Property Federation (BPF) are designed to limit the warrantor’s obligations. These forms are generally approved by professional bodies and insurers.

Who will require collateral warranties?

In the case of an architect it is unlikely that he will have a contractual relationship with the purchaser of the building or the eventual tenant. The building may also be funded by a bank or some other financial institution and again the Architect is unlikely to have a contractual relationship. A Collateral Warranty creates a contractual relationship between the Architect and these parties which reflects the responsibilities that the Architect had to his client.

Assignment

These agreements can also be assigned meaning that their benefits can be passed on from one funder, owner or tenant to the next. Very often they only stop when the limitation period expires and this is likely to be 12 years after the date of practical completion. So now the Architect can be pursued by parties other than his client.

What is the Stance of PI Insurers towards Collateral Warranties

As a rule the P I Insurance Market will normally accept claims arising from sensibly worded agreements. The British Property Federation has agreed standard templates with most construction related professional bodies (RIBA, ACE, RICS included), which most insurers will accept.

Most PI policies address the issue of collateral warranties by clearly setting out the limits beyond which cover will not apply. This should avoid the need to submit each and every agreement for sanction by the insurer. Some Insurers will also offer a free collateral Warranty checking service as part of the policy.


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