Professional Indemnity Is About the Mistakes Clients Actually Allege

A consultant may worry about giving incorrect advice. A technology firm may worry about a failed implementation. An architect may worry about a design allegation years after a project ends. All can sit under the broad professional indemnity conversation, but their claim patterns are not interchangeable.

A useful proposal begins with the work clients pay you to perform and what happens when they say it went wrong.

Use your contracts as the map

Review scopes of work, service levels, warranties, indemnities, limitation clauses and governing law. Identify subcontracted services and projects in other countries. The insurance application should tell the same story as the contracts.

Respect the reporting basis

Many professional indemnity policies respond on a claims-made basis. Prior acts, retroactive dates and timely reporting of claims or circumstances deserve close attention when switching insurers.

• Keep a central register of complaints and incidents.
• Escalate threats of a claim even if no suit has been filed.
• Check consent requirements before admitting liability.
• Preserve project records after the work is complete.

The practical takeaway

The policy should reflect how your firm can disappoint a real client, not an abstract label selected from a drop-down menu.

Coverage, exclusions, limits and claim requirements vary by insurer and policy. Read the customer information sheet and policy wording before you buy or renew.