Top 10 Tips for Reviewing your Professional Indemnity Insurance Coverage

1.  Policyholder 

Check that your full business name is correctly listed. This needs to be the legal entity in which you trade under. 

2. Business Description 

Ensure that the business description correctly reflects the business services that are insured under the policy.  

3. Prior Business 

Ensure all prior company names (legal entities) are listed under the insured name and that the Business Services are listed under the Business Description. (If they are not listed, it is likely you are not covered for work undertaken through these entities). 

4. Retro-active Date

The retro-active date should provide cover for either unlimited date or the date your business commenced. In some circumstances, insurers may not be able to provide full information from the date your business commenced if no previous professional indemnity insurance was in place before. 

5. Policy Limits (Limit of Indemnity)

Review your policy limit to ensure that you are adequately protected. Consider your prior, current and forthcoming work.  

6. Policy Excess

Minimum excesses are set by insurance companies. Whilst increasing your excess may have a slight reduction in premium (generally not more than 5–10%), the premium saving should be compared to the additional amount payable in the event of a claim or multiple claims. 

7. Territorial and Jurisdictional Limits

Insurance policies issued within Australia provide at minimum Australian Territorial and Jurisdictional Limits. If you are providing products and services to or in other countries, then you should ensure that your policy is suitable for this.  

8. Policy Extensions

Review the policy extensions to ensure that you understand the nature of cover provided. 

9. Policy Endorsements, Exclusions & Conditions

Review the policy endorsements, exclusions and conditions to ensure that you understand the extent of the cover provided.  

10. Claims & Notifications of Circumstances

It is extremely important in order to comply with the policy coverage to notify all claims or circumstances to your insurer in the year that they arose, prior to the expiry of your policy.  Failure to do so may result in a claim not being insured. 

Ask all your employees/authorised representatives/sub-contractors to confirm in writing that they are not aware of any circumstances or claims against them. Encourage openness and not a culture of fear regarding notifications to PI Insurers. If in doubt, refer any issues to your insurance broker or adviser, or in their absence directly to your PI Insurer. 

The policyholder has an obligation to understand the terms of the contract. Whilst an insurance broker’s role is to provide advice and to ensure that the policy is in accordance with your instructions, current legislation places responsibility on all parties to an Insurance Contract to be aware of the details of that Contract. We recommend you read these documents in conjunction with the Policy Wording and retain these documents and that you keep them both in a safe place.