If you purchase Professional Indemnity insurance then you more than likely understand what you are covered for, but what do you do in the event of a claim being lodged against you? We have put together this brief overview to help assist you should the worst case scenario occur.
Notification of Claims
All losses or incidents which may result in a claim are to be reported as soon as possible after the event to us.
The first notification should be by telephone, or as circumstances dictate, and should include the following information: -
Description of incident
Claimant and their relationship to you
Estimation of Loss; and
Your opinion on liability
What is a Claim
In its simplest form most Professional Indemnity policies the term 'claim' is defined as receiving a written demand for money.
Receipt of a Written Demand
If you are unfortunate enough to receive a written demand thus potentially trigger the insurance policy it is imperative that you do not provide any form of admission of liability. Insurers could use this as reasons to deny liability or only proportionality indemnify you, the insurer in this instance would cite that you prejudiced their position /ability to defend the claim .
The first this that you should do is contact your insurance broker. The handling of the claims is where the true knowledge and service standards of a brokerage is tested.
Receipt of a Verbal Demand
Occasionally, a client will contact you and threaten to sue you verbally or express displeasure within your work and hold their right to sue. This places you in a tricky circumstance as it can be unclear whether this is something that should be notified to the insurer. As with a written demand you should lean on your insurance broker in these circumstances and contact them and explain the circumstances.
After notifying your broker then you should start pulling together all of your internal files on the work which has triggered the allegation. Your insurance broker will send through a claim form, this needs to be completed and returned as quickly as possible so as to get the insurer on-board quickly and allow them to start working on your defence.
You should avoid contacting the claimant unless instructed to do so by your broker or insurer. The reason for this is that you could inadvertently compromise both yours and the insurers position.
The next step is the easiest to say, but hardest to do and that is to try not to take the notification personally. Many businesses do and either become too emotionally involved within the process or 'bury their heads in the sand' hoping that it will all blow over.
Finally, your broker and insurer are experts within the insurance industry, they are best placed to be able to assist and handle the claim process for you. They should keep you in the loop with updates and how things are proceeding.