Professional Indemnity Insurance

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)