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Professional Indemnity - law books

Professional Indemnity Insurance

Historically, it was the traditional professions which sought Professional Indemnity Insurance, however today’s professionals cannot ignore allegations of professional negligence. The allegation must be admitted or defended and as a result, there can be cost implications in either case.

Professional Indemnity Insurance is an important purchase for those companies that provide advice, design, specification, supervision, technical assessments or surveys. It is irrelevant whether such professional service is provided for a fee or gratuitously, as a duty of care is still owed to their client or other third party.

This form of cover is a type of legal liability insurance which provides an indemnity for the financial consequences of professional negligence, following a breach of professional duty by way of neglect, error or omission. In addition, an indemnity is provided in respect of the legal and other costs and expenses incurred in the defence of a claim.

This type of insurance is now seen as the appropriate risk transfer mechanism for a diverse range of consultancy and professional businesses, both traditional and modern.

A sample of companies that this type of insurance is suitable for:

  • Banks
  • Solicitors
  • Surveyors
  • Stockbrokers
  • Architects
  • Publishers
  • Accountants
  • Conveyencers
  • Fund managers
  • Advice bureaux
  • Interim managers
  • Company doctors
  • Loss adjusters
  • Naval architects
  • Financial advisors
  • Captive managers
  • Insurance brokers
  • Venture capatalists
  • Property managers
  • Project managers
  • Financial institutions
  • Signposting services
  • Planning consultants
  • Underwriting agencies
  • Yacht and shop brokers
  • Engineering consultants
  • Recruitment consultants
  • Construction consultants
  • Advertising & PR agencies
  • Credit reference organisations
  • Credit reference organisations
  • Healthcare & medical malpractice
  • Business management consultants
  • Computer software programmers & IT consultants
  • Railway consultants (including track & signal planning and design)
  • Contractors who sign collateral warranty agreements and/or undertake design and build contracts

The duty of care owed is usually the mantra of ‘reasonable skill and care’, in the discharge of the services provided. If a professional fails to exercise this duty (i.e. is negligent) then they may be liable for losses incurred by their client and/or third parties. Taking into account the operation of the current legal system, even proving innocence can be very expensive.

Policy wordings are always carefully assessed by W Denis before being offered. Some trade bodies require mandatory minimum levels of coverage, such as the Solicitors Regulation Authority or Royal Institute of British Architects. We strive to exceed those minimum levels of cover where possible by negotiating bespoke enhancements with the underwriters.

Some professions benefit from an enhanced professional indemnity policy wording which is blended with directors' and officers' liability insurance, e.g. venture capital trusts.

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