Professional Indemnity Insurance

Known also as errors & omissions (E&O) insurance, professional indemnity insurance (PII) is a liability insurance. It protects individuals and organisations that provide professional advice and services from bearing the cost of defending against a negligence claim made by a client, and damages awarded in such a civil lawsuit. The coverage focuses on alleged failure to perform on the part of, financial loss caused by, and error or omission in the service or product sold by the policyholder.

PII coverage also provides for the defence costs, including when legal action turns out to be groundless. While coverage may include defence cost in case of criminal prosecution and regulatory investigations, it does not include other potential liabilities under civil law that are not specifically defined as being covered in the policy, and which may be subject to other forms of insurance (e.g. like D&O liability).

Financial institutions and financial service providers have become increasingly concerned about professional liability exposures, with good reason. A single lawsuit can have devastating repercussions for a company’s solvency and reputation.

The financial industry has entered an era of unprecedented change: A wave of new regulations, rapid technological change, an evolving business environment, increased competition, the globalisation of financial markets and increasingly more sophisticated consumers are shaping the industry.

The PII core coverage is to reimburse loss including defence costs of the insured organisation arising from a claim for any wrongful professional act of any insured in rendering or failing to render professional financial services.

It includes defence cost with regards to alleged wrongful professional acts. Additional coverage is available (subject to the conditions of a policy), like:

Taking out a professional liability insurance is a process that requires diligence. This factsheet [270 KB] provides relevant information.

If you are interested to receive a quote for professional liability insurance, please return us a completed application form [209 KB] . We provide transparency and assist the client in optimising its insurances.

For fund managers and for independent asset managers, there are combined insurance solutions available on the market, which include coverage for D&O-liability, professional indemnity and fidelity insurance.

Combined insurance solutions provide the advantage that certain coverage gaps are avoided from outset.

For most companies, insurance represents one of their biggest investments and their largest source of contingent capital. The main purpose of insurance is to protect their balance sheet, and to reduce volatility in the profit and loss account following a large loss.

The challenge for insurance buyers is raising the awareness of the value of insurance beyond that of a commodity, and articulating how individual insurance covers can contribute to the financial strategy and financial modelling of the organisation.

A standard product, - the name says it all - often does not match the client’s individual risk profile and maybe leaving the client unaware of critical gaps in coverage. Leading insurers often provide 'off-the-shelf' insurances with impressive features and attractive pricing. Such policies are sometimes very efficient to bind, no annoying questions asked.

However, most of the times these standard products contain unusual exclusions that limit coverage and/or the insured has to comply with specific contractual obligations as a condition precedent to an insurance claim made and successfully settled. We help our clients to eliminate such clauses from their policies.