Due to the diverse nature and the wide range of risks covered by the miscellaneous classes, there is a wide range of differing professional Indemnity policy wordings available on the market and no two are the same. The most basic is Lloyd’s market wordings that have been adopted or adapted by many companies. They offer very basic, no frills cover but can be enhanced using various cover extensions to bring them up to scratch.
PI Expert has access to the whole of market, including Lloyds and can identify the most suitable insurer and policy cover for the wide range of miscellaneous businesses that operate. We are always happy to provide specimen policies and key fact documents for the policy cover that we place and are able to negotiate tailored wordings where it is appropriate to do so, so do not hesitate to ask.
Most miscellaneous wordings offer an indemnity clause limited to claims (including claimants’ costs) arising out of any negligent act, error or omission. It is not unusual for defence and investigation costs to be included within the limits of indemnity and this can greatly reduce the level of policy cover available to meet the cost of any eventual settlement in respect of damages that are made against you.
Care also needs to be taken in respect of the excess that applies to the policy cover. Miscellaneous policies may have costs inclusive excesses that apply to the insurer’s costs and expenses incurred in the investigation, defence or settlement of claims even if there is no third party claim made. You should check if it’s not clear. The cover can be on either an ‘aggregate’ or an ‘any one claim’ limit of indemnity.
Typically, miscellaneous policies will exclude things that should have more specific insurance, for example, Bodily injury / property damage, except where caused by a breach of professional duty, Claims in respect of the use of vehicles, Products liability (although as many miscellaneous businesses sell, repair and alter products there may be a requirement for cover under the PI policy for these risks).
There will also be exclusions in respect of contractual liability – this is liability assumed under any express warranty, agreement, guarantee unless such liability would have attached anyway, Insolvency / bankruptcy of insured, Circumstances known at the inception of the policy cover, Fines and penalties. Claims by financially associated parties will also be excluded although some insurers will cover these claims if they emanate from a third party. Radioactive contamination and war, Fidelity, Seepage and Pollution and asbestos are other common exclusions.
Some of the exclusions may be written back into the policy cover where appropriate – for example cover can be given where appropriate for Environmental risks (including Seepage and Pollution) although many insurers maintain this exclusion even where there is a clear and insurable environmental exposure
The following cover extensions are included as standard within the vast majority of miscellaneous professional indemnity policy wordings.
Libel & slander
Loss of documents
Dishonesty of employees
Unintentional breach of confidence
Infringement of copyright
There are a range of other Special extensions / conditions which can be agreed including (but not limited to) cover for Ombudsmen’s awards, Collateral warranties, Housing Grants, Construction and Regeneration Act 1996 (in the UK where adjudication awards are likely, such as construction professionals)