Professional indemnity insurance should be a priority for business leaders
Odett Van Jaarsveld, Head ofProfessional Indemnity (PI), Underwriting and Single Projects at SHA.
Professionals who offer advice or services face significant liability risks in the event that clients suffer damages. Yet in spite of this, a survey conducted by SHA Specialist Underwriters has shown that only 57% of business leaders have considered the need to ensure that their professionals are covered under an adequate liability policy.
This is according to Odett Van Jaarsveld, Head: Professional Indemnity (PI) Underwriting and Single Projects at SHA, who says that the first annual SHA Industry Risk Survey indicates that a relatively high number of professionals are finding themselves in situations where they are being held liable by clients for damages suffered.
“One interesting finding was that around 20% of the brokers that we interviewed had processed a PI claim within the previous 12 months. It is also important to note that insurers and reinsurers globally have reported a marked increase in the severity of liability lawsuits. As companies increase their service offerings in order to maintain their competitive edge, it is highly likely that the complexity and frequency of professional liability lawsuits will continue to escalate exponentially.”
With this in mind, Van Jaarsveld says that business leaders need to make adequate PI cover one of their top priorities for their companies. “A professional liability lawsuit has far-reaching implications and has the potential to impact the professional’s career for years to come. It is therefore vital that professionals have the best defence team, not the cheapest, in the event of a PI claim.”
She adds that the survey also revealed a very positive statistic. “We have found that business leaders are indeed taking the threat of liability very seriously, and that most are already taking measures to manage their risks in this regard. Around 76% of the business leaders that we surveyed, conduct background and qualification checks on employees.”
However, even with stringent risk management protocols in place, Van Jaarsveld says that it should never be taken for granted that negligence, errors or omissions could occur. “PI cover is the final line of defence to protect professionals from financial ruin, should the worst occur. It is therefore imperative that business leaders consider the implications and make it their responsibility to ensure their companies have the best insurance cover in place,” Van Jaarsveld concludes.
https://www.agcs.allianz.com/insights/expert-risk-articles/liability-claims-trends/
https://www.willistowerswatson.com/-/media/WTW/.../marketplace-realities-2018.pdf
