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What kinds of professional indemnity insurance claims are there?

29/03/2019

Judges gavel

Can of worms. Opened.

We’re going to assume that you already know a bit about professional indemnity insurance. If you don’t, no problem, have a read of this. It’ll help get you up to speed.

Now, we know that professional indemnity insurance helps protect your business if a client alleges you’ve been negligent. To illustrate how, we’re going to give you some real-life examples.

Specific claims vary by industry so it’s difficult to cover everything here. For example, marketing people don’t face exactly the same risks as IT people.

So it’s important to realise instead that all professionals have a duty of care to their clients when they undertake work for them. It’s a breach of that duty of care that usually results in a claim.

What’s in a word?

Negligence. It's a broad term and it covers a whole range of possible circumstances.

But that’s why you bought cover in the first place. Because you just never know, right?

Any professional can be accused of negligence. If someone does sue you, regardless of whether the claim is valid or not, your professional indemnity insurance picks up the tab.

What else is there? Well, you may also have heard of other jargon-heavy terms like infringement of intellectual property and defamation. Your policy should certainly cover these basics too.

The nitty gritty

But, as promised, here are some quick examples of actual claims (of various types) against actual clients (of various types) that we’ve dealt with. All of these can be considered as negligence:

  • Architect sued by his client for the costs of rectifying an extension built from a flawed design. Insurer paid £22,500.
  • Logistics company sued by a competitor for copyright infringement and intellectual property theft relating to their business model and their website. Insurer paid £170,000.
  • Web designer’s client sued by image owners for using unlicensed pictures on his website. Client sued the web designer. Insurer paid £9,000.
  • IT consultancy’s web hosting partner company hacked – consultancy’s clients’ websites offline for a day. Consultancy sued for loss of business by a client. Insurer paid £3,200.
  • Marketing agency omitted a digit from a client’s phone number and left out their web address in a printed advert. Commercial decision made to reprint advert at agency’s cost. Insurer paid £21,995.

Makes you think doesn’t it?

What’s clear is that professional indemnity claims come in all shapes and sizes. Mistakes happen no matter how careful you are – or think you are. Anticipating them isn’t easy (you wouldn’t need professional indemnity if it was) but, thankfully, protecting yourself is.

See just how easy by getting a quote or giving us a call.

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