Prevention is better than a cure
The onus is on you to ensure that all such matters are notified in line with your policy terms and conditions. It is important that the policy terms and conditions are fully complied with when a claim or potential claim occurs, to avoid problems with policy coverage.
Most professional indemnity claims occur because of mistakes which are often easily avoidable. To minimise the risk of a claim and to help give yourself the best defence, you may find the following points useful:
- Keep well-recorded file notes of all meetings and of any advice that is offered to the client.
- Ensure that you have good diary systems to avoid any slippage on agreed time scales etc.
- Refer to checklists as an aide memoir to ensure that relevant information has been obtained at an early stage.
- Ensure that your Letter of Engagement is clear and precise and identifies the proposed course of action and any advice that is being given.
- Maintain good communication with your clients and always follow up meetings and telephone discussions in writing.
- Whilst the archiving of old files can be a problem in terms of storage costs and space, access to the file when dealing with a claim is essential when it comes to entering a defence.
- Encourage a culture of openness in respect of potential claims or problems within the business. It is far better for managers and staff if they feel they are able to admit to a mistake. Problems left to fester will create insurance disputes if they are notified late.
When you should notify your broker
You should notify your broker immediately if you become aware of a claim or a circumstance which may give rise to a claim. Notification must be made irrespective of your views on liability or the amount involved.
Professional indemnity policy wordings are very strict on the time allowed in which to make a notification from the date of first awareness, so it needs to be done without delay. Failure to notify within the period specified by the policy may leave you uninsured.
Information you should provide as part of your formal notification:
- Copies of any correspondence received which may be (but not limited to) emails, letters, file notes or any legal documents such as a Writ.
- The date of your first awareness.
- The identity of the potential claimant and any other parties involved.
- A brief outline of the problem and your views on liability.
- An indication of the potential financial value of the claim.
Once you are aware of the claim or circumstance, there are certain rules you must follow to avoid a potential breach of your policy terms and conditions:
Do Not:-
- Admit liability
- Take any action which could prejudice your Insurer’s position or their ability to investigate the claim
- Enter into any claims correspondence without your insurer’s permission
- Settle or offer to settle
- Disclose your insurer’s involvement
P I Professions have a wealth of experience and knowledge when dealing with claims and are here to assist.
Frequently Asked Questions
If you have either experienced a loss, or need to defend a claim, it could be that you need a claims management service. We can work with you on a variety of circumstances such as directors liability, cyber-attacks, business interruption, negligence and more.
The main benefit of a claims management service is that it allows you to resolve claims in a time effective manner. Claims against your organisation can cause huge disruption and wreak havoc when it comes to your day-to-day operations. By outsourcing to experts, this takes away that added stress and strain, and you can feel safe in the knowledge that it is in capable hands.
Our expert advisers can work with you to see any vulnerabilities within your organisation. After we have a look at any processes and procedures you may have in place, we can recommend risk mitigation plans and strategies to protect you from potential risks.