Professional Indemnity Insurance

Both Public Liability and Professional Indemnity insurance can protect your business from the result of a mistake or accident, but the types of mistakes and accidents they cover are different. 

Public Liability insurance protects you and your business against the financial implications if you are found liable for loss or damage to other people’s property, or cause illness or injury that is not covered by the Accident Compensation Commission (ACC). 

Professional Indemnity Professional Indemnity (PI) insurance is an important form of protection for businesses that provide specialist services or professional advice. It is designed to respond to claims against your business for losses as a result of actual or alleged negligent acts or omissions in the provision of your professional service or advice. PI Insurance will also assist with the legal costs associated with responding to or managing claims which are covered by the policy. 

Like other insurance policies there are a number of important conditions and obligations under your insurance contract that you need to understand. You are obligated to inform your insurer as soon as possible after you first become aware of a potential claim situation.  

Professional Indemnity insurance is issued on a ‘claims made and notified’ basis, meaning the policy responds to claims first made against the insured during the active policy period, and notified to the insurer during the policy period. In a nutshell for a claim to be considered, your policy must have been active at the time the allegation was made against you, and when the claim is lodged. 

One of the vital conditions of a Professional Indemnity policy is that you may be required to give information around any circumstances that may give rise to a claim to your insurer. You have an obligation to inform your insurer as soon as practically possible once you become aware of any situation which could possibly result in a claim.

Failure to notify your insurer as soon as reasonably possible could lead to your claim being denied. So, even if you’re unsure whether it’s worthy of letting them know or not, it’s in your best interests to do so.