Professional indemnity insurance is designed to cover the insured entity, its directors and employees from claims which result from an alleged breach of professional duty owed to a third party.
It is important to recognise that the policy responds to both the allegations of a wrongful act (regardless of their validity) as well as indemnity’s paid to third parties which means the policy is essentially separated into two sections being;
Historically the cover was tailored to suit those industries that you would normally associate with ‘expert’ or ‘tailored’ advice such as Accountants, Engineers or Real Estate Agents but with an ever increasing rise in litigation it is now seen as standard risk management practice to ensure all professional service related businesses carry professional indemnity policy.
Whilst there are a number of factors which determine the coverage afforded under your Professional Indemnity policy there are only a handful of questions to be answered in order to generate an indicative quotation which we have detailed below;
The reality is we could allow you to quote, finalise and purchase your policy but to do so, in our opinion would be unethical as it could leave you exposed in the event of a claim. Professional Indemnity Insurance represents a contract at law, and whilst obtaining a quotation requires only a handful of questions to be asked it is reliant upon Us, your broker, to ensure that the coverage provided is tailored to mirror the risks that your business faces on a day to day basis. A failure to ensure that we do this properly will undoubtedly leave you exposed in the event of a claim, which in essence defeats the purpose of purchasing the policy in question.
Outside of the basic quotation questions it is compliant upon Us need to know the following;
– What your key business risks are
– Why you are purchasing your policy
– What are your concerns and
– What makes your business unique
Without asking these questions, how can we ensure that you are properly covered in the event of a claim!
Not all insurance providers are the same. At FD Beck, we are an insurance broker which means we are we are your advocate! We act on behalf you, 100% of the time, no questions asked. This ensures that you have access to our in-house expertise, claims handling knowledge and know that we are your representative and not a middle man for an insurer. We are here to;
– Negotiate with your insurer to ensure we get the best deal available.
– Tailor your policy to meet your specific needs.
– Answer any questions you have as part of the policy purchase or throughout the policy period.
– Help manage your claims with your insurer.
Just as importantly not all Professional Indemnity Insurance policies are the same. Not only do the policy terms and conditions differ from one insurer to another but the fundamental basis of the policy can also be different.
Before proceeding with any policy the following things must be asked;
– Is my policy organised by an Insurance Broker or an Agent of the insurer? Remember there is a significant difference particularly in the event of a claim.
– Is my policy limit ‘Costs in Addition’ or ‘Cost Inclusive’? The offering presented by FD Beck is ‘Cost in Addition’ which means that any costs incurred in defending your claim are always viewed separately to your limit of indemnity. This ensures that should you be required to indemnify a third party, your Limit of Indemnity will always remain protected.
– Is my policy excess ‘Costs Exclusive’ or ‘Costs Inclusive’? All quotes issued by our online calculator are done so on the basis of being Cost Exclusive which means you will only pay a policy excess only if indemnity is granted to a third party. Therefore should you have to deal with a baseless allegation your business will not incur any costs when notifying of a claim.
In a society where litigation is now so prevalent (Australia is the second most litigious country in the world behind the USA), it is now recognised that Professional Indemnity Insurance is an essential tool to risk management as it helps protect both your personal and business assets from allegations of a wrongful act, regardless of their validity.