Professional Indemnity Overview

1. Professional Indemnity Overview Ian Storm – Giles Insurance Brokers Limited Tel: 01582 542337 Fax: 0870 4009406 Email: ian.storm@thebroker.co.uk

2. Typical Claims – Management Consultants • An insured acted as an interim finance director. When the company suffered a downturn claiming the insureds advice was the cause. The insurer paid to defend these allegations and to protect his professional reputation • Client developed a computer based training system, the CBT had been registered when an employee discovered a Swedish IT company using the same name, it had not been registered by the Swedish IT company but they had been using it widely across Europe. The PI policy paid for the product to be renamed and also the subsequent re-printing of the promotional materials

3. Typical Claims – Marketing/Advertising • Incorrect amounts of mailers in a direct marketing campaign were despatched to different regions resulting in a large number not being sent and the customer refused to pay the complete printing costs. The Insurer was able to pay the outstanding amount • Market research undertaken on behalf of a brewery for a product launch was performed incorrectly and hence was not made available to the brewery on time for the product launch due to the resulting loss they sued for the whole cost. The insurer paid for the research to be conducted again and covered the loss suffered by the brewery

4. Typical Claims – IT consultants • A contractor incorrectly installed a modem leading to extra costs of £10,000 • Contractor lost data carrying out a back up of a system leading to extra cost of £75,000 • New system installed for print, mail and storage in breach of the original agreement leading to a claim of £250,000 • New Data management systems failed to meet specification leading to a claim of £500,000

5. What is PI PROVIDES COVER FOR: • Negligent acts or omissions Other available extensions • Defamation • Infringement of intellectual property • Dishonesty • Breach of confidentiality • Any civil liability • Fidelity • Loss of Documents

6. Insolvency, liquidation or receivership advice Mergers and Acquisitions Investment Pollution Contracts and legal matters Offshore or oil/gas related Recruitment or placing of medical personnell Training Human Resources Strategic/organisation consultancy Project management Health & Safety Computer and IT consultancy Marketing consultancy Risk Area’s

7. Risk Management • Always have a contract in place – framework of services/written specifications • Keep client informed of all developments • Receive regular client ‘sign off’ and any changes noted and signed off by client • Ensure all sub-contractors carry adequate Professional Indemnity and Public Liability • Do not react to a potential claim pick up the phone to your broker/insurer as most claims can be nipped in the bud • Be a part of or have qualifications recognised by a professional body • Do not step outside own expertise • Dabbling in unfamiliarity leads to claims

8. Cover/General Information • Cover is provided on a ‘Claims made basis’ • Standard limits of indemnity are £250,000, £500,000 or £1,000,000 – Higher limits are available but are usually dictated by specific contracts • Always complete a proposal form • Declare all material facts - ??? • Use an expert broker- One size does not fit all!

9. Why buy it • Duty of care – Lee Cookson • Protects the business and individual for their civil liabilities • Provides access to expert defence lawyers • Protects your professional reputation • Protects your clients