What is Professional Indemnity Insurance?
Professional indemnity insurance covers the cost of compensating clients for loss or damage resulting from negligent services or advice provided by a business or an individual.
Professional Indemnity Insurance In South Africa
Professional Indemnity insurance essentially provides the Name Insured in the policy with indemnity in respect of legal liability arising out of the practice of the profession.
This normally arises as the result of negligent acts, errors or omissions. Claims do arise in the course of rendering professional services and thought needs to be given to the risk exposure, risk management and risk transfer.
Professional Indemnity is aimed at providing protection against financial loss resulting from a legal liability to a third party.
Anyone who offers services or advice in a specialised field could be held accountable at law for the advice or service to the general standards of their profession or industry.
Some lines of business are therefore legally required to have this cover in place and this is where AIG is able to offer insurance solutions for a wide range of modern professional activities.
Features and Benefits
A wide range of policies covering specific professions, or for other specified fields.
Tailor-made wordings for the following professions – Accountants; Attorneys; Advocates; Estate Agents; Media; Telecommunications; Technology; Outsourcing; Insurance Intermediaries; Teaching Organisations; Engineers.
Who is it for?
All types of professional practices, from sole-traders to large multidisciplinary firms.
What is covered?
Our liability coverage means that if a claim is made by a third party because of your professional services, and we have not excluded it, it is covered.
Wrongful Act, error or omission.
Misstatement, misleading statement.
Breach of confidentiality.
Unintentional breach of contract.
Defense costs in addition to Policy Limits (policy retention is not applicable to defense costs).
Fraud and Dishonesty.
Unintentional infringement of intellectual property rights.
Defamation.
Worldwide territorial limits excluding North America (North American cover optionally available).
Cover is on a “claims made” basis.
Is professional indemnity insurance compulsory in South Africa?
FSPs are required by law to “maintain in force suitable guarantees or professional indemnity or fidelity insurance cover”.
Does a limited company need professional indemnity insurance?
Professional insurance is not a legal requirement for businesses. In fact, the only business insurance that’s required by law is employers’ liability insurance, which is a legal requirement for most businesses with staff.
What level of professional indemnity insurance is required?
Specific PI requirements
Membership for accountants and accountancy firms is typically reliant on a level of cover at least two and a half times their gross fee income for the last financial year.
How do I claim professional indemnity insurance?
Insurance + Risk Services
5 important tips for claiming on your Professional Indemnity Insurance.
Duty of Disclosure – if in doubt notify the insurer!
Include ALL Insured names.
List and update ALL of your professional services.
Ensure your PI policy covers Vicarious Liability.
Continuity / Continuous Cover Clause.
How long do you need professional indemnity insurance?
Traditionally, run off insurance would be maintained in this way every year for up to six years. Six years is the period many professional bodies require their members to carry run off PI for, this is therefore a good benchmark to use for all professions.
How does professional liability insurance work?
Professional liability insurance is a type of business insurance that provides coverage for professionals and businesses to protect against claims of negligence from clients or customers.
Professional liability insurance typically covers negligence, copyright infringement, personal injury, and more.