The professional indemnity insurance policy is designed to protect the policyholder against claims arising from a breach of professional duty, but all policies, whether on a civil liability or negligence basis will contain exclusions so what are the standard exclusions under a professional indemnity insurance policy?
The exclusions you will find under most professional indemnity insurance policies can be separated into distinct areas;
Market Exclusions to Professional Indemnity Insurance Policies
These exclusions are common to most commercial general insurance policies in the United Kingdom and these include losses arising from radioactive contamination, war, terrorism, pollution. asbestos and toxic mould.
Risks covered under other insurances
- Third party injury or property damage unless arising from a breach of professional duty. This is the subject matter of public liability insurance.
- Liability arising from the ownership of land or property.
- Claims from employees in respect of your legal liability for injury death or disease. This is the subject matter of employers liability insurance.
- Claims arising from the supply of a product. This is the subject matter of product liability insurance.
- Cost of product recall – This is the subject matter of product recall insurance
- Directors and officers liability and employment practices liability and legal expenses insurance.
General Cover Restrictions
- Liquidated damages – damages that are specified and agreed in the contract for example penalty clauses for late completion.
- Criminal fines and punitive damages – it is against public policy for these to be covered by an insurance policy
- Claims brought outside the jurisdiction show in the policy or claims brought under USA/Canada jurisdiction
- circumstances that may lead to a claim that the insured was aware of at the inception of the policy
- claims arising from the dishonesty of the insured
- claims arising from work undertaken outside the geographical limits of the policy
- claims arising before the retroactive date in the policy
- liability assumed under contract that would not normally attach to the insured in the absence of the contract
Specific Restrictions Related to Certain Professions
For many occupations and professions, professional indemnity insurance is issued under a Miscellaneous Professions policy wording, this is a general wording that may be issued on a civil liability or negligence basis and may be subject to additional exclusions targeted to a particular occupation.
For the longer established professions such as accountants, estate agents, surveyors there may also be standard policy exclusions applied on a specific wording for the profession for example for estate agents and accountants the policy will generally exclude the provision of financial advisory services.