How it Works

Guidelines towards working of Professional Indemnity Insurance

After knowing that PI insurance can insure you with your assets, you might definitely want to know how it works. Well, here’s the detailed guideline.

What PI insurance generally covers?

  • Past and present claims made by clients
  • Claims for negligence
  • Data loss claims
  • Financial loss claims
  • Claims for dishonesty
  • Claims for breaches of clients’ Intellectual Property

The financial benefits that you would get depend on the type of PI policy you take. You could rely on Online Cheap Auto Insurance for such insurance which is one of the UK’s best online Insurance offering companies.

Today, the owners of limited companies would not like to take a risk for any kind of financial loss that they may suffer because of workers under them whose consequences can be incredibly high.

Hence, the PI cover applicants are growing in professional industries although claims for data loss or negligence and other silly mistakes are rare.

If you are planning to change your career, or may be retiring, taking out Run off PI cover is highly suggested to you.

And Run off cover means?

This is an extension to your PI policy after you change your career or changed your company or retired. A client, after you leaving your profession or retirement, might claim against you for any work done by you in the past which might have caused them a loss.

Run off cover is basically designed to protect individuals against the claims which are made by clients after they leave their profession.

This is basically taken up to 6 years as this is the maximum duration for contract claims.

Retroactive Cover:

To be highly insured, many professionals would like to take out Retroactive PI Insurance which can cover all of the clients’ claims after several years of a project due to loss caused to them in the past. However, to take this cover out, the insured must able to justify that he is presently not known to have any claims against them due to works carried out in the past.

Group policies

Depending on the number of members in a group covering similar professions, Group policies can also be issued under PI Insurance.

Discounts are liable only depending on the number of people in the group.

Things to be kept in mind:

  • Only Civil Liability like any damage to the third party with respect to any mistakes, error or omissions is covered by the policy.
  • The policy will not cover any liabilities arising due to criminal act or act committed in violation of any law.
  • Negligence will be proved only if it satisfies the following conditions: Injury suffered by person/property damage as a result of that breach, breach of this duty, existence of duty of care.
  • The claim will only be taken up if that’s under the period of insurance or retroactive period or the claim first made in writing against the insured during the policy period.
  • The policy will not pay for claims arising out of contractual liability, penalties, fine, loss of goodwill, false arrest, statutory provision etc.

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