Professional Indemnity Policy Covers and Wordings
From PIA
Tuesday, 9th November 2010 10:02 am
The First Area to consider would be based on the contract between the insurer and the insured, arises and brought about by the contract. The format and principals of a PI contract is that ‘Contract Law’ applies equally to insurance however there are other insurance elements that have to be taken into account.
Where Professional Indemnity is purchased in order for the cover to be binding, there must be a breakdown of what is being offered to the client by the insurer, and an acceptance of that offer by the client.
This is usually brought about by relevant information either collected online via a question set that is then agreed as by a proposal with appropriate questions asked of the client and their business activities, once both parties have agreed the terms of the offer the contract can be formed.
The terms of such a contract for Professional Indemnity would be based very much on the following:
- Length of time to be insured
- Details of the risk to be covered
- The pricing costs of the PI Cover
- The level of cover being offered
- Any terms conditions/agreements warranties
Clearly a full policy wording for professional indemnity insurance covers can be 12/16 pages long so not every point in the wordings have to be expressly agreed although clients will have a full summary and quotes from their brokers and insurers which will lay out the general principal of the cover.
The client is still well advised to check the policy wording for any areas that they may not be happy with.
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