FD Beck Insurance Brokers

Three things to look for when comparing Professional Indemnity Insurance

Many business owners fall into the dangerous trap of only comparing Professional Indemnity Insurance purely on a ‘price’ basis.

Typically, people will look for a ‘compare the Professional Indemnity market’ type website. After all, often businesses are only purchasing PI Insurance because they’re entering into a contract that requires them to do so. However, there are at least three things to look for when comparing Professional Indemnity Insurance.

That said, let us start by giving you some advice: Whether or not you are contractually required to have insurance, it has no bearing on the professional duty of care you owe a client.

Therefore, even if you are only purchasing PI Insurance for contractual reasons, you want to be getting value for money. With over 20 years’ experience in insurance, I can tell you the cost becomes secondary when making a claim. The focus very quickly changes to coverage provided in the policy and what excess needs to be paid. The old saying, you get what you pay for, can also be applied to Professional Indemnity Insurance.

To help make the right choice when comparing PI Insurance, consider these three things:

Dedicated Insurance Broker vs Call Centre

First off, a qualified insurance broker will have access to policies from more than 150 national and international insurance companies. What is often not understood is that with a broker, you also have a claims advocate working for you. This means you have someone with you to help guide you through the claim.

Better still, an insurance broker provides a dedicated point of contact. Ultimately, you have a single point of contact and don’t get bounced around between people in a call centre environment.

Whether or not you are contractually required to have insurance has no bearing on the professional duty of care you owe a client.

Simon Pascoe, FD Beck

Professional Indemnity Cover Extensions

Can your insurer offer a broader, enhanced Professional Indemnity policy that stands apart from the standard policy? Check to see if your PI Insurance policy provides extensions which have not historically been included. For example, does your PI policy extend to include Fidelity Cover, i.e. cover you as an employee against losses incurred through dishonest employees?

Does your PI policy extend to include Statutory Liability? Remember, the devil is in the details. Be vigilant, check the formal quote to see what sub-limits, automatic extensions and optional extension apply.

Optional Extension for Contractors, Consultants or Agents

It is often misunderstood who is covered under a Professional Indemnity policy. Particularly when it comes to insuring various parties, such as the principal consultant, contractors and subcontractors.

Normally, a PI Insurance policy will provide cover in respect of a claim against you for vicarious liability arising from the conduct of any contractors, consultants or agents. However, the insurer typically will not cover the contractor, consultant or agent. This means if you are liable for the actions of your consultants the policy will provide cover.

Be very careful of PI policies that exclude cover for you when the claim arises out of the acts of others. Check to see that your policy provides various liability cover. If not, avoid the policy, regardless of the cost.

Be prudent with your insurance

Prudent business practice stipulates that professionals ensure that their contractors, consultants or agents maintain their own PI insurance. However, if this is not possible you may want to consider the option of extending cover to include them beyond your vicarious liability.

To get your Professional Indemnity quote online go to FD Beck’s online quote portal where almost 150 professional occupations are covered. Don’t just think your covered, know you are.

For over 100 years, FD Beck has protected Australians. Rest assured, we have the knowledge and expertise to handle every aspect of your insurance needs.