Professional Indemnity Insurance

Professional Indemnity Insurance is a type of business insurance that provides coverage for professionals who provide advice or services to clients. A Professional Indemnity Insurance Policy will therefore cover the policyholder in an instance where they are liable for financial losses due to the provision of negligent services or advice, provided that the negligent act, error, or omission occurred during the course and scope of the insured’s professional duties.

A vital aspect of a Professional Indemnity Insurance Policy is that it is a “Claims Made Policy” which means that the policy must be in force at the time an incident is reported. It covers claims arising from work performed on or after the retroactive date stated on the policy. When you purchase a Professional Indemnity Insurance Policy, it will have a specific retroactive date mentioned in the policy.

This date represents the point in time from which your coverage starts, protecting you against claims arising from work performed on or after that date. Any error or omission that occurred prior to the inception date (or retroactive date if a replacement policy is being issued) of the policy will not be covered.

This makes retroactive cover an important aspect of Professional Indemnity Insurance, as it is designed to protect professionals against claims related to past acts, errors, or omissions that may come to light after the policy has been issued. Without retroactive cover, the insurance policy would only cover claims arising from work performed after the policy’s effective date.

Various insurers may have distinct criteria or prerequisites concerning retroactive cover and dates, so you should canvass this with your Financial Services Provider prior to applying for a Professional Indemnity Insurance Policy. Your Financial Services Provider must provide this information in any recommendation that is made in respect of this type of policy.