What are the risks?
Any company, practice or individual that provides professional advice or services carries a duty of care to their clients. Failure to provide such services can often lead to costly legal actions and whether the failure to perform is justified or not, the costs to defend such an action can very quickly accumulate and impact on the day to day running of the business.
Professional Indemnity Insurance (PI), which is mandatory in many jurisdictions worldwide, is a fundamental tool used to protect businesses from such allegations of claim. The policy steps in to indemnify defence costs, or in some cases pay on behalf of the policyholder thereby removing the financial burden payments could otherwise have on monthly cash-flow.
The policy will allow you to continue to grow the business and ultimately pay the loss suffered from any successful claim. Many businesses simply use the policy as a device to secure contracts with clients. At the very least it`s good business practice to buy.
What can businesses expect to face?
Potential claimants can range from shareholders, investors and employees to liquidators, banks or regulatory bodies. Whilst the individual can sometimes rely on the company to stand in and pay for their defence this is more commonly not always the case.
In such instances the costs are for the individuals own account and costly litigation can rapidly eat into personal assets; savings, property and general lifestyle. For an individual this can be financially crippling.
What does it cover?
The basic D&O policy operates a two-fold coverage approach. It can pay the defence costs to the individual or in cases where the company pays these on the individuals behalf, the policy will reimburse the company. Either way the policy provides a crucial comfort factor to the individual, who can focus on running the business.
At Safeonline we put together a wide range of bespoke PI and D&O programs, either as a standalone policy or in blended format. We ensure the programs we organise are tailored to our clients business and specific requirements. In some cases we can wrap in General Liability covers; public, products or employers liability thereby giving our clients a complete policy solution. In addition to the standard D&O offering we can extend covers to include Entity EPL and securities cover for traded businesses and can also arrange stand-alone public offerings policies.
- Duty to defend
- Technology services/products cover
- Innocent insured coverage
- Professional services carvebacks
- Cyber liability coverage
- Copyright infringement
- Malicious (hacker) attacks