What PI Insurance won't cover
Although
contractor professional indemnity insurance is designed to provide you with comprehensive protection and access to expert assistance if a client accuses you of
professional negligence, there are some risks it won’t cover.
That could be because the risks would normally be covered by another kind of
insurance cover, which isn’t the same as your
contractor professional indemnity insurance. Or some risks and associated costs and expenses are simply outside of the scope of a typical
contractor professional indemnity insurance policy.
This is quite normal, but you should check your policy documentation and familiarise yourself with risks excluded from your
contractor professional indemnity insurance in case you wish to consider other
insurance products.
Policies complementing contractor professional indemnity insurance
If you look through the documentation you received when purchasing your
contractor professional indemnity insurance and check the exclusions, you will see that risks such as
employers liability, land, buildings and products are excluded. This is because you would normally take out separate policies to cover those risks.
Other exclusions in this category include
business interruption, patent disputes and
product or
service recall costs. If you think your contracting business might need
insurance cover for any of these, in addition to your
contractor professional indemnity insurance, then cover can be easily arranged.
Risks outside the scope of contractor professional indemnity insurance
Most
insurance policies exclude extreme occurrences, such as war, terrorism, radioactive contamination, seepage, pollution, asbestos and toxic mould. Fortunately, most contractors will not encounter these risks in the course of delivering their services. Those that might will have their policy and premiums adjusted accordingly.
More mundane exclusions out of the scope of a typical
contractor professional indemnity insurance policy are fines and penalties. You will also find that, unless you specifically request it and pay an enhanced premium, your policy will exclude services delivered to clients in North America, because of the litigious nature of those territories.
If you have been contracting for many years and have just changed
contractor professional indemnity insurance provider, you should also check to ensure that your past contracts are covered. You will normally be asked when purchasing a new
contractor professional indemnity insurance policy whether you would like retroactive cover for the risks of past clients claiming against your new
contractor professional indemnity insurance.