Professional Indemnity

What is professional indemnity insurance?

If you provide a professional service, there are many areas where you may be exposed to liability for an economic loss as a result of an error or omission by you or one of your employees. These liability challenges and threats have increased due to a demand of accountability on experts giving advice, an increasingly more litigious society, increased competition in key product and service markets and an increasing customer expectation.
These threats and challenges are made worse with an increased innovation and change in many professions, outsourcing of services and ever increasing consumer protection legislation.


Who does it affect?

The definition of 'professional' has broadened in recent years. Due to this, professional indemnity insurance is now held by workers across a wide range of industries. Any professional person providing services such as advice, is regarded by their client as an expert and is therefore open to a claim being made against them should their advice be wrong.

Professional liability insurance was once associated mainly with such groups as accountants, solicitors, medical workers and engineers. Currently however, it provides protection for advice and treatment provided by people in many industries, including architects and designers, education workers, real estate agents, health workers and consultants. Although generally a voluntary form of insurance, certain professionals, including insurance brokers, legal professionals, medical practitioners and some accountants, are required to hold professional liability insurance. Professional contractors often need to hold professional indemnity insurance if working with government bodies, local authorities or private consulting firms.

The professional indemnity policies and conditions relevant to you will vary widely depending on your industry. For further information on the professional indemnity issues that affect you, contact the relevant industry body or talk to an experienced insurance broker such as CPR Insurance.

Why is it useful?

Losing a claim made against you can result in enormous costs and expenses. Some claims take more than five years to settle, leaving a large bill for court costs and legal expenses. Even when successful, defending a claim can be costly.

Who can help?

Professional indemnity is a complex and specialised area of insurance. If you want to know more about the professional indemnity policies and conditions relevant to your profession, contact a specialist insurance broker such as Cooper Professional Risks.

An insurance broker's role is to act as your representative and work in your interests, seeking the best cover at the best price for you from market knowledge. Call a good one. Call CPR.

Cooper Professional Risks Pty Ltd trading as CPR Insurance Services is a Brisbane based business. Robert Cooper can be contacted on 07 3123 1137 or 0439 530910. Email is enquiries@professionalrisk.com.au.

Cooper Professional Risks Pty Ltd trading as CPR Insurance Services is an Authorised Representative of National Adviser Services Pty Ltd (ABN: 60 096 916 184) trading as NAS Insurance Brokers (AFS No.233750)

Professional Indemnity policies are "Claims Made" covers. Read More.

Latest News

Above-average cyclone season looms

As reported by insurancenews.com.au

Insurers should brace for an above-average cyclone season due to weakening La Nina conditions in the Pacific Ocean and warmer than average sea temperatures to the north and east, according to the Bureau of Meteorology.

The cyclone season begins next month and ends in April.

The bureau says Australia has a 67% chance of an above-average season, while the west has a 59% chance, the northwest 63%, the north 56% and the east 58%.

In neutral years the first tropical cyclone to make landfall typically occurs in late December, while in La Nina years it usually hits in the first week of December, the bureau says.

Insurance Council of Australia spokesman Campbell Fuller says even an average cyclone season – consisting of 11 events, four of which make landfall – can be devastating.

“An above-average year could bring many more than that, and each one has the potential to cause catastrophic damage if it crosses the coast in a heavily populated area,” he said.

“Only one cyclone made landfall last season, and that was in a sparsely populated part of WA’s Pilbara. There’s no guarantee Australia will be so fortunate this summer.”

Tropical Cyclone Marcia cost insurers $544 million from more than 37,000 claims when it struck Rockhampton in February last year. In 2011 Cyclone Yasi cost insurers $1.4 billion.

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Beware the escape clause in Motor policies

Cheap motor insurance can have some tough exclusions The Policy Comparison team at LMI have highlighted some new exclusions have been introduced by some of the “Cheapy” direct insurers. Previously Motor Insurance wordings did not have an exclusion for “reckless acts” but this has now changed.  Reckless driving is often defined as a mental state in which the driver displays a wanton disregard for the rules of the road; the driver misjudges common driving procedures, often causing accidents and other damages. The legal dictionary defines reckless driving as operation of an automobile in a dangerous manner under the circumstances, including speeding (or going too fast forthe conditions, even though within the posted speed limit), driving after drinking (but not drunk), having too many passengers inthe car, cutting in and out of traffic, failing to yield to other vehicles, and other negligent acts.

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