To Err is human, and to make easy to admit, it is Professional Indemnity Insurance.
A Claims made insurance policy means you must have a policy in place at the time you are first made aware of a claim or potential claim, or are first notified of circumstances that could lead to a claim.
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 after the work is completed. The subsequent renewals are covered from the date of inception of first PI insurance policy maintained without any break and this date is called as retroactive date.
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.
This will also depend on the severity of the financial impact of a mistake in your line of work; it should be enough to cover the cost of defending or settling any claims you might face. To calculate this, check your contracts and the value of your projects and talk with peers or a professional body. We’ll tailor your policy to suit your needs, so you’re properly protected.