Aon Quartely Magazine

Example of a claim
A graphic designer was briefed by
their client to provide price tags that
would fit round the stem of Christmas
trees. The tags would need to
withstand exposure to the elements
and stay fitted to the tree while it
grew. The tags did not survive the
test of time; the ink ran, rendering
them useless to the client. The client
lost money due to this oversight and
took legal action against the graphic
designer for professional negligence.
The graphic designer’s professional
indemnity insurance policy covered
their legal costs and compensation
payments to the client, a total cost of
over Kshs.450,000. The client didn’t
pursue their claim for the full cost of
the labels; if they had, the claim could
have cost as much as Kshs.5,000,000.;
Do I need professional indemnity insurance?
Don’t Guess - Know
You should know what
your policy does and -
more importantly - does
not cover. Come to Aon
Kenya for all your insurance
needs.
Many professions need to have
professional indemnity insurance
as part of their respective industry
body’s regulatory requirements.
Even if you are not obliged to have
PI insurance, without it, you could
be liable for thousands of pounds
worth of legal fees and compensation
payments – not to mention lost
income from the time spent
defending any allegation.
Professions that might need
professional indemnity insurance
include (but are not limited to):
• Management and business
consultants such as marketing
consultants, training consultants
and education consultants
• IT professionals including
IT contractors, consultants,
programmers and developers
• Recruitment agencies and
recruitment consultants
• Designers such as web designers,
graphic designers and interior
designers
• Fitness professionals including
personal trainers, dance teachers
and yoga instructors
• Teachers and tutors including
private tutors
• Doctors and Lawyers
How much does professional
indemnity insurance cost?
The cost varies depending on a
number of factors, including the
amount of cover, but Market Direct
offer PI insurance cover from for a
wide range of professionals.
What does ‘claims made’ mean?
A ‘claims made’ policy provides
cover for claims which are made and
notified to the insurer during the
period of insurance.
This means that provided the
wrongful act occurs during the period
of insurance, and you report it to the
insurer during the period of insurance,
it will be covered. However, if the
policy is cancelled or not renewed,
cover will end and any subsequent
claim – regardless of when the
wrongful act occurred – would not
be covered by that policy. As such,
it’s important to have professional
indemnity insurance cover in place –
even between contracts or work – to
ensure your business is protected. All
Markel Direct professional indemnity
insurance policies are on a ‘claims
made’ basis.
This contrasts with a ‘claims occurring’
policy which provides cover for claims
which occur during the period of
insurance. Professional indemnity
policies are rarely, if ever, written on
this basis. It is more commonly found
with public liability and employer’s
liability policies.