CCW Global is a specialist broker for Professional Indemnity Insurance products, helping companies around the world obtain the highest quality protection possible.
Professional Indemnity Insurance, also known as Errors and Omissions Insurance, is a type of corporate insurance product which is designed to protect businesses in advice-giving industries against negligence claims in regards to the businesses’ services.
In many parts of the world a Professional Indemnity Insurance plan will be a mandatory purchase for businesses operating within specific industries. For example, any Hong Kong based Insurance Brokerage will have purchased a professional indemnity policy due to local regulatory requirements. Additionally, in some cases a professional indemnity insurance policy is required by customers who will demand that such cover is in place before any business can be placed with the service provider.
As previously stated, a Professional Indemnity Insurance policy is designed to protect businesses against the risk of supplying bad, or wrong advice to customers.
Claims under a Professional Indemnity policy are normally unrelated to bodily injury, except in the very specific case of Medical Malpractice Insurance, and will mainly be in regards to losses a customer has realized which have stemmed from misleading or bad advice provided by a company; no matter whether the advice was intentionally or unintentionally wrong.
Under a Professional Indemnity Insurance plan from CCW Global, coverage for negligence claims and subsequent civil suits can include:
Because of the nature of a Professional Indemnity Insurance policy, the plan is created based on the specific nature of the business being insured. As such, this type of policy is normally tailored to meet the exact needs of the company being protected; for example, the overall maximum limit of the policy will change based on variables like the business’ total annual revenue or the total value of the individual contract requiring PII protection.
In order to better understand exactly how a Professional Indemnity Insurance policy could help protect your business from the risks associated with giving customers advice, we can look at examples of this type of insurance in action.
A client has contracted an accountancy firm to assist with a Tax issue. The accountant advises to proceed in a certain manner by taking specific actions in relation to the tax problem.
This advice is later determined to be incorrect, and directly leads to the client having to pay a fine, resulting in a compensation claim against the company which initially offered the advice.
A professional indemnity policy would cover the Accountant’s liability for the customer’s loss stemming from the bad advice, and would cover the costs associated with a legal defence in any subsequent civil suit brought forth by the client.
A client contracts an Architectural firm to design a new building. The firm creates the designs which are then sent to the contractor to commence building. However, during the building of the structure a number of serious design flaws are found which will compromise the integrity of the entire building; requiring all work to be torn down at the building to be re-started.
The re-starting of the construction will lead to a significant financial loss for the client, who submits a claim for compensation against the architectural firm for bad services. A professional indemnity insurance policy would help to cover the costs of the Architect’s legal defence in a civil suit, as well as any resulting compensation payments for the customer’s losses stemming from the shoddy design.
As highlighted above, a Professional Indemnity Insurance policy is normally only purchased by companies in advice giving industries. However, a range of industries can benefit from the protection of a comprehensive professional indemnity policy.
CCW recommends that businesses and professionals in the following areas strongly consider the purchase of a professional indemnity insurance plan if such coverage is not already a regulatory requirement:
Please note that this list is not exclusive and in many cases CCW Global can help to provide bespoke Professional Indemnity or Errors and Omissions insurance which has been specifically designed for a specific job or industry.
If you would like to receive a free no-risk, no-obligation consultation to learn about the Professional Indemnity Insurance options offered by CCW Global, or if you would like to investigate whether a Professional Indemnity Insurance plan is right for your company, please Contact Us Today.
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