Professional Indemnity insurance

While smaller businesses in some professions may be comfortable buying ‘off the shelf’ cover direct from insurers at relative low premiums, it is worth noting that professional indemnity insurance can be a complex and unfamiliar class of insurance.

For many professions, the risk of being sued is an occupational hazard and damages and defence costs can accumulate into the millions of pounds. Companies should always utilise the services of an insurance broker with a specialism in professional indemnity to ensure that the most appropriate cover is arranged.

WHAT WE DO

We offer an enhanced service proposition designed for all professional service firms that we continuously review and evolve to ensure we cater for the ever changing risk profile and exposures that our clients face. Our clients are all individual businesses and, as such, we work with them to tailor our services and provide solutions that are designed to meet their needs. Our key services include:

ADVISORY
We will set a renewal strategy, agree key objectives and desired outcomes, agreeing the insurer selection criteria to drive the negotiations and not be passive participants.

NEGOTIATION AND PLACEMENT
We will arrange meetings with interested insurers to provide a platform to present more about your business before renewal negotiations commence.

We deal directly and extensively with all suitable insurers, including those where only JLT can negotiate terms.

DAY-TO-DAY SERVICING
All our clients have a dedicated client team which is there for all your day-to-day requirements and who will provide a full consultative service throughout the year.

CLAIMS ADVOCACY AND MANAGEMENT
Our claims advocacy and management team consists of qualified lawyers and claims experts who work alongside our clients every step of the way, adding value with disputes or complex matters to reach the required outcome.

FAQs

What is professional indemnity insurance?

Professional indemnity insurance is a form of liability cover, giving you protection in the event of claims by a third party for professional negligence. This will cover things such as design, advice and specifications, and differs from product liability in that it covers claims arising from the provision of professional services rather than the sale of physical products. As well as negligence, claims could include error, unintentional breach of intellectual property rights and loss of documents or data. It covers damages and the legal fees and costs incurred in the defence of a claim.

Do I need professional indemnity cover?

Professional indemnity cover should be purchased by anyone providing professional advice or services, from traditional professions such as lawyers and architects, to more recently emerged professions like IT and management consultants. Sometimes it will be a requirement to have professional indemnity insurance. This could be the case where you work in a regulated profession, or a minimum level of cover could be stipulated in a contract, for example joint contracts tribunal (JCT) construction contracts.

How do I work out how much cover I need?

This depends on a number of factors, including the type of work you do; the risk that someone will take legal action against you; the potential size of a claim; and any requirements stipulated by a contract or professional body. Three times annual fee income is a good starting point, but also consider the worst case scenario and the likelihood of it happening.

You also need to think about how long you need cover for. Professional indemnity insurance is written on a ‘claims made’ basis, so while it is in force it will cover you for claims made during the policy period rather than just covering the services you provide in that period. As claims can occur long after you provide the service, you should keep cover in place for several years: typically six, although some contracts specify up to 12.

What pitfalls could catch me out?

It is essential to disclose all material information otherwise claims could be declined. Buyers must complete a proposal form, which becomes part of the policy contract. These forms are designed to capture all the relevant information but, if you feel an important part of your professional service has not been disclosed, speak to your insurer or broker. Whoever is completing the form should check with all senior executives that what is on the form is correct to their knowledge.

Consideration should also be given to retroactive cover. When you take out PI cover for the first time you may be able to buy retroactive cover to give protection for future claims that arise from professional services performed prior to the inception of your first policy. If organisations are established and have not bought cover before, they must consider existing exposures and whether they need retroactive cover back to when they started trading. There is also a claims disclosure clause that must be carefully observed. The company must disclose any potential claims, or circumstances that may give rise to a claim, to insurers within a specified timeframe. In some policies this is worded as ‘immediately’. In other policies the notification requirement is ‘as soon as is practicable’, which allows the policyholder a far higher degree of latitude.

What are the implications of getting it wrong?

Getting it wrong can be hugely expensive. Failing to disclose material information could mean a claim is declined. Likewise, if you do not take out sufficient cover you could find yourself having to meet the additional costs. Organisations also need to think about the damage to their reputation when a claim is made. They need to establish a plan as to how to minimise the damage, and put in place protocols with the insurer to ensure claims are handled in a timely and efficient manner.

WHY JLT

We are specialists. Our deep expertise and entrepreneurial culture give us the insights, creative freedom and tenacity to go beyond the routine and deliver better results for our clients. Heres what makes us different:

PARTNERSHIP
Our dedicated team works alongside our clients to create lasting relationships. We are by your side throughout the year providing advice on risk management, claims and other related issues.

PERSONAL SERVICE
We provide a personal and trusted service for our clients.

REGIONAL EXPERTS
Our team of experts are based throughout the country to provide local, hands-on service and support.

PROACTIVE CLAIMS
Our in-house team of highly experienced claims professionals specialise in managing, negotiating and resolving claims quickly and effectively.

MARKET STRENGTH
We have has strong trading relationships with the majority of the global insurance market. As a result, we are well positioned to access a wide range of insurers with an appetite for underwriting professional indemnity insurance.

KEY AREAS OF FOCUS

Lawyers
Our Legal Practices Group is made up of specialist practitioners committed to providing insurance and risk management solutions to the legal services industry. It is widely acknowledged (both by clients and insurers), as being one of the most experienced of its kind. We have built one of the largest market shares of law firms in England & Wales and currently represent over 1,000 firms. These range from sole practitioners and high street firms, to the larger City, national and international practices.

Property agents and chartered surveyors
Our team has developed an insurance and risk management service designed specifically around the needs of property consultants and surveyors. We are constantly reviewing and evolving our offering to ensure we cater for the ever changing risk profile of the industry such as the impact of technology and cyber threats.

Through our strong trading relationships across a broad range of insurers, we are well positioned to access insurers that are suited to individual needs, which we recognise will vary considerably between firms. We work tirelessly to ensure that our clients are offered choice and this remains central to our proposition for clients.

Licensed conveyancers
We have secured exclusive professional indemnity insurance schemes for firms regulated by the Council of Licensed Conveyancers (CLC). These exclusive schemes are underwritten by leading “A” rated law firm insurers to ensure we are able to offer a professional indemnity solution to firms of all sizes. Our legal services team is one of the largest and most experienced in the UK and we are committed to providing CLC regulated firms with competitive professional indemnity protection.

RISK MANAGEMENT

Anyone who practices in the legal services sector will recognise many of these risk issues: ever increasingly demanding clients, limited resources, changing regulatory requirements and the risks associated with online communications cyber.

We appreciate that many firms have limited resources focused on risk management and compliance, covering such risk issues. We can provide a supporting role to your risk initiatives bringing our experience to the table to use as and when you feel we can add value.

We assist large firms that have considerable internal risk management and compliance expertise at their disposal as well as smaller firms who have to juggle their fee earning time with fulfilling their roles in risk and compliance. Our services include:

Benchmarking and claims analysis
By benchmarking various criteria, we are able to highlight how firms compare. This helps us to identify the areas for closer focus and improvement. Unlike many broking firms who have limited data, JLT has one of the largest data pools in the solicitor professional indemnity insurance market.

With information on well over 5,000 firms (which includes 58,000 lines of claims data) across the whole spectrum of size and specialisation within the profession.

Risk management training seminars
Although people are the only real asset of a law firm they are also its biggest risk. Embedding risk awareness continues to be an important factor in the control of risk. Our insightful seminars and workshops look to transform the sometimes negative attitudes towards risk management and compliance. Our risk management training sessions typically last an hour and can be conducted at any time.

Market intelligence/support
Market intelligence is important because it can help you to identify new trends and risks. It also provides early warning of market changes, trends, threats and opportunities. For us, keeping track of the professional indemnity insurance marketplace is an integral part of our business.

Keeping our clients informed of developments in the marketplace is just one of the areas in which we excel. We provide regular updates on risk issues affecting the legal sector.