Professional Indemnity Insurance for Charities: A QBE Guide
One of our insurer partners, QBE has produced a ten point guide to Professional Indemnity Insurance, ’10 Things to Know About Professional Indemnity Insurance’, a potentially essential section of cover for charities and social enterprises.
If your organisation is not sure if you need this cover, you can always contact Ladbrook for advice but the QBE document is a useful and thought provoking simple summary covering a number of aspects of this cover.
The key messages are:
- If an organisation can get things wrong while providing a professional service, you have a ‘PI’ exposure
- A professional service is an intangible service where there is a suitable expectation by the recipient from the provider of experience, knowledge or skills. This means that the providers are expected to hold a greater knowledge than the average person in that service. It could be in design, consultancy, advising, translation, mediation, education or training.
- The primary cover is for financial claims that might arise from negligence, error or omission. Some PI policies extend cover to include lost documentation, accidentally releasing client information, defamation or dishonest acts by employees.
- It does not matter whether you charged a fee for the service or advice offered. Even if the advice was off hand, friendly and free conjecture, a client may seek damages and a court may rule that your actions were a breach of a professional duty of care.
- PI Insurance is provided on a claims made basis. This means that you are only insured for claims and notified during the policy period. This can be a tricky area and we would always encourage charities to seek advice because some PI claims lag between the incident of advice and the financial loss.
- Retroactive cover provides cover for work that you have done in the past, essential when you consider the previous point.
- When operations cease for a charity, risks still exist that a party might seek a claim against the charity for historic negligent advice or services. A run-off policy can be arranged for organisations in this position.
If your charity needs advice about professional indemnity, contact Ladbrook today.