To guarantee sufficient protection and suitable coverage for the risks connected with your profession, several important factors should be considered when choosing a professional indemnity (PI) policy. Here are some factors to consider:

Coverage Scope

Nature of Services

Ensure the policy covers the specific professional services you provide. Different professions have unique risks, and the policy should be tailored to address these.

Claims Covered

Verify what types of claims are covered, such as negligence, errors and omissions, breach of duty, misrepresentation, and defamation.

Policy Limits

Limit of Indemnity

Assess the policy’s limit of indemnity to ensure it is sufficient to cover potential claims. Consider both the per-claim limit and the aggregate limit.

Exclusions And Extensions

Exclusions

Carefully review the policy exclusions to understand what is not covered, such as fraud, criminal acts, known claims, and contractual liabilities.

Policy Extensions

Consider any additional coverages or extensions that might be beneficial, such as run-off cover, intellectual property infringement, loss of documents, and public relations crisis management.

Retroactive Date

Check if the policy has a retroactive date, which determines how far back in time the coverage applies. Claims arising from incidents before this date are not covered.

Claims-Made Basis

Most PI policies are written on a claims-made basis, meaning coverage is triggered when a claim is made, not when the incident occurred. Ensure there is no gap in coverage when switching policies or retiring.

Deductibles

Take note of the deductibles or excess amounts you will be required to pay out-of-pocket in the event of a claim. 

Compliance

Ensure the policy complies with any industry-specific or regulatory requirements for professional indemnity insurance. Certain professions may have mandated minimum coverage levels or specific conditions.

Policy Costs

Consider the cost of the policy, including premiums and any additional fees for endorsements or extensions. 

Renewal Conditions

Understand the terms and conditions for renewing the policy, including any potential changes in coverage, limits, or premiums. Ensure continuity of coverage to avoid gaps.

Policy Documentation

Ensure the policy documentation is clear and comprehensible. You should understand the terms, conditions, exclusions, and claims process.