Professional Indemnity Insurance Quotes

Whether you already hold professional indemnity insurance or are looking to protect your practice for the first time, it is important that you continuously seek quotations from the leading professional indemnity providers. Preferably this can be achieved by one of the professional indemnity insurance brokers or professional indemnity agencies.

Many times the insurance premium is decided by a range of different factors. Type of profession and project, duration, deductible, limit of liability, claims are all good examples of the underwriting consideration.

What Is Professional Indemnity Insurance?

Professional indemnity  insurance policies are generally set up based on a claims-made basis, meaning that the policy only covers claims made during the policy period. A key component is the wording. Typically a policy will provide indemnity to the insured against loss arising from any claim or claims made during the policy period by reason of any covered neglect, error or omission committed in the conduct of the insured’s professional business during the policy period. Claims which may relate to incidents occurring before the coverage was active may not be covered, although some policies may have a retroactive date, such that claims made during the policy period but which relate to an incident after the retroactive date (where the retroactive date is earlier than the inception date of the policy) are covered.

Coverage does include criminal prosecution, nor all forms of legal liability under civil law, only those specifically enumerated in the policy.

Some policies are more tightly worded than others and while a number of policy wordings are designed to satisfy a stated minimum approved wording, which makes them easier to compare, others differ dramatically in the coverage they provide. For example, breach of duty may be included if the incident occurred and was reported by the policy holder to the insurer during the policy period. Wordings with major legal differences can be confusingly similar to non-lawyers. Coverage for “negligent act, error or omission” indemnifies the policyholder against loss or circumstances incurred only as a result of any professional error or omission, or negligent act (i.e., the modifier “negligent” does not apply to all three categories, though any non-legal reader might assume that it did). A “negligent act, negligent error or negligent omission” clause is a much more restrictive policy, and would deny coverage in a lawsuit alleging a non-negligent error or omission.

Coverage is usually continued for as long as the policyholder provides covered services or products, plus the span of any applicable statute of limitations. Cancelling the policy before this time would in effect make it as if the insured never had coverage for any incidents, since any client could bring any case with regard to any such services or products that occurred before the statute of limitations cut-off point. A break in coverage could result in what is called a “gap in coverage,” which is the loss of all prior acts.

It is vital that you seek professional indemnity insurance quotes from different insurance companies – preferably via brokers.

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Professional Indemnity Insurance Brokers

An insurance broker finds sources for contracts of insurance on behalf of their customers. The three largest insurance brokers in the world, by revenue, are Aon, Marsh & McLennan, and Willis Group Holdings. All three firms have their own specialist departments when it comes to professional indemnity,

Insurance brokerage in the UK

The Insurance Broker became a regulated term under the Insurance Brokers Registration Act 1977 which was designed to deal with bogus practices of firms holding themselves as brokers but in fact acting as representative of one or more favoured insurance companies. The term now has no legal definition following the repeal of the 1977 Act. The sale of General Insurance has been regulated by the Financial Services Authority since 14 January 2005. Any person broking insurance can now call themselves an insurance broker.

Insurance brokerage is largely associated with general insurance (car, house etc.) rather than life insurance, although some brokers continued to provide investment and life insurance brokerage until the onset of more onerous Financial Services Authority regulation in 2001.

Insurance broking is carried out today by many types of organisations including traditional brokerages, Independent Financial Advisers (IFAs) and telephone or web-based firms.

A Lloyd’s broker is a firm of brokers that has been approved by Lloyd’s of London, and having met certain minimum standards, is able to place business directly with Lloyd’s underwriters.

Insurance brokerage in the United States

Insurance brokerage in the United States is also a regulated industry, with almost all states individually issuing brokerage licenses. Most states have reciprocity agreements whereby brokers from one state can become easily licensed in another. Over the last 10 years the Insurance Licensing requirements amongst the states have streamlined and most applications for license can be done elctronically.

Because of industry regulation, smaller brokerage firms can easily compete with larger ones, who are forbidden by law from providing their customers with rebates or other discounts on the policy prices of insurance companies.

Brokers play a significant role in helping companies and individuals find property and liability, life and health insurance. For example, research shows that brokers play a significant role in helping small employers find health insurance, particularly in more competitive markets. Average small group commissions range from 2 percent to 8 percent of premiums. Brokers provide services beyond insurance sales, such as assisting with employee enrollment and helping to resolve benefits issues.

Insurance brokers in Australia

In Australia, all Insurance Brokers are required to be licensed by the Federal Government’s Australian Securities and Investments Commission (ASIC). Reputable and experienced insurance brokers in Australia will generally also hold additional qualifications such as a Certificate or Diploma in Financial Services which requires the completion of in depth studies in a specific area, the most common being General Insurance or Insurance Broking.

Within Australia there are also a number of industry bodies that issue professional accreditations to members that comply with best standards of professional practice and integrity and maintain up to date skills and knowledge. The two main accreditations are ANZIIF’s CIP (Certified Insurance Professional) and NIBA’s QPIB (Qualified Practicing Insurance Broker).

Dealing with an insurance broker as opposed to directly with an insurer is something many customers (particularly businesses) choose to do in Australia for the following main reasons; the ease of having the “shopping around done for them”, having the opportunity for premium funding which allows for larger insurance policies to be paid in installments rather than all at once; dealing with one broker for all policies from the Car Insurance to professional indemnity insurance rather than dealing directly with several insurers, and the ease of having claims managed by the broker who deals directly with the insurer on the client’s behalf which typically expedites processing time and assists in achieving a favorable outcome.

Hence, by dealing with specialized professional indemnity insurance brokers (what is professional indemnity insurance?) you can find more adequate and cost effective cover for your business.

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Professional Indemnity Insurance Cost

How Much Does Professional Indemnity Insurance Cost?

In this article, we’ll cover where to find professional indemnity insurance, how much it will cost, and some strategies that could help you save money when shopping for a policy.

Where to look?

If you carry other types of insurance, such as homeowners or a general liability insurance policy, check with your insurance provider. If that company offers a professional liability product, you may be able to buy it at a discounted rate. A disadvantage of this approach is that your provider may offer only one indemnity insurance product. If you don’t like the coverage or the premiums, you’ll be out of luck. If your company doesn’t offer what you need, ask for a referral to another company or an independent agent who might.

The advantage of working locally is that if you have a problem or you need to file a claim, you can easily check in with your agent in person, which can be more difficult with an agent you’ve found through a Web site.

That said, you can find legitimate companies on the Internet that offer professional liability insurance.

Regardless of which company you decide to use, research the company’s background. Ask to see its industry ratings, including a review of its claims payment history.

What does it cost?

The cost of professional liability insurance varies, but considering the current economic climate, you probably won’t think it’s cheap. Premiums generally start at about $1,000. The quotes I received from a number of insurance companies ranged from $1,000 to $1,450 for a standard policy that covered me for $1,000,000 for each claim and up to $2,000,000 per year.

Premiums also vary depending on your revenues, the number of employees in your organization (I have none), your location, the limits and deductibles you choose, and your risk factors. Remember that your costs for insurance are deductible as a business expense, so the out-of-pocket cost isn’t as shocking as it might seem.

Factors Affecting Your Indemnity Insurance Premiums

Your premiums will vary depending on your business. (As a documentation specialist, I seem to be in a fairly low-risk category.) Factors that affect your risk and your premium include the following:

Experience: Several of the applications and quote request forms that I found required much more detail from applicants who’ve been in business for less than three years. Presumably, the less experience you have, the more risk you present.

Types of clients: If you deal with clients who have a lot to lose (e.g., a company that processes a high volume of financial transactions), you’ll have more on the line if they decide you’ve cost them money.

Services provided: If you develop mission-critical software, your risk will be higher than that of someone who provides auxiliary services.

Money-saving strategies

You can reduce the cost of liability insurance in a few ways. First, buy only what you need. Some policies include coverage for the following, while others quote it separately. Make sure you understand what’s included, what’s priced separately, and what you can opt out of:

Property: This covers your equipment and other business property in the event of loss, theft, or damage as simple as a spilled soda on a keyboard.

General liability: This protects you from claims of bodily injury and property damage.

Virus liability: This protects you if a client experiences damage caused by a virus that it claims your solution introduced. This is one of the more optional coverages. For example, I don’t need it as a technical writer—none of the solutions I provide are vehicles for viruses.

Intellectual property coverage: Also known as patent infringement protection, this coverage protects you in the event that a client accuses you of stealing a technology or even an idea.

So to sum up the professional indemnity insurance costs depends on your revenues, the number of employees in your organization, your location, the limits and deductibles you choose, the choice of insurance company, the services you provide, claims history etc.

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