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Consultants Professional Indemnity Insurance, PI cover

Consultants professional indemnity insurance

Consultants professional indemnity insurance is an insurance cover designed to protect a business offering professional advice or services.

Historically this insurance, consultants professional indemnity insurance, has been taken out by the traditional professions – accountants/architects/surveyors/engineers etc. However times have changed and there is now a long list of people who provide a service and are considered to be ‘professionals’. A ‘professional’ is now generally regarded as any person who offers ‘specialist advice or services’.

The following is  a list of occupations that should consider taking out consultants professional indemnity insurance due to the nature of the advice that they give :

  • Business and management consultants
  • Careers consultants
  • Catering consultants
  • Compliance consultants
  • Education consultants
  • Facilities managers
  • Fire protection consultants
  • Food safety consultants
  • Health and safety consultants
  • Human resources consultants
  • Leisure consultants
  • Logistics consultants
  • Procurement consultants
  • Training consultants

These occupations can be  covered on a  miscellaneous professional indemnity policy.

What does consultants professional indemnity insurance cover?

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

  • Breach of civil liability
  • Any negligent act, error or omission
  • Unintentional intellectual property rights infringement (other than patents)
  • Unintentional breach of confidence, confidential duty or misuse of information
  • Unintentional defamation (libel & slander)
  • Loss of documents or data entrusted to the insured
  • Computer virus transmission
  • Negligence of sub-contractors
  • Irrecoverable fees
  • Bodily injury or property damage arising from breach of professional duty
  • Defence costs
  • Court attendance costs

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

Some points to be aware of:

  • A lot of consultants buy professional indemnity insurance so that they can fulfil the requirements set out in the contract with their customer. The consultant basically has to prove that he has consultants professional indemnity insurance in place before he can start the contract with a potential customer. However, PI should NEVER be purchased just for the duration of a contract. All PI is written on what’s called a “claims made” basis – i.e. it’s the policy you have in force when the claim is made that pays out, rather than the policy you had when the work was carried out. So, if you complete your contract and then cancel your PI cover and a claim comes in subsequently then you will NOT BE COVERED. Basically, if you take out PI it’s a long-term commitment.
  • If you decide to ‘shop around’ at renewal of your policy then you should ensure that the quotes that you receive are on a “like for like” basis. Care should be taken to ensure that the policy cover’s all your civil liabilities rather than just your error’s and omissions. It is also important to check the limits of indemnity and check whether it is on an “ any one/ each and every claim” or “in the aggregate” basis. You should also check the excesses applicable under the policy as they can vary dramatically from one insurer to the other.
  • 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.

 

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