Professional Indemnity Insurance
Professional indemnity insurance policies are designed for and available to professionals across a range of industries and covers:
- Damages awarded against you; and
- Legal costs and expenses of defending a legal claim;
arising from a breach of professional duty. Professional Indemnity insurance is a “claims made” type insurance.
This insurance has developed and improved over the years. The most commonly used operative or insuring clause in a Professional Indemnity policy is a civil liability wording. In earlier years, Professional Indemnity coverage was limited to negligent acts, errors or omissions which was limiting.
A professional indemnity policy will provide cover for a “breach of professional duty”, specifically:
- Breach of duty;
- Unintentional breaches of the Trade Practices Act;
- Unintentional libel, slander and defamation;
- Unintentional infringement of copyright, trademarks, designs, patents or plagiarism;
- Loss, damage or destruction of any documents or records in the insured’s control and reasonable costs to replace and restore such documents; and/or
- Any actual or alleged dishonest, fraudulent, malicious or criminal act or omission by an employee.
Extensions included in most Professional Indemnity policies based on correct disclosure are:
- Loss arising from consultants, agents and subcontractors (contractors themselves are not covered);
- Incoming principals and their civil liability arising from prior professional practice;
- Prior corporate entities;
- Estate, heirs, legal representatives of the insured who dies or becomes legally incompetent or insolvent;
- Outgoing partners (“run off” cover - this may be available only as an extension)