What is PI insurance?

PI insurance covers a professional practice, its partners/directors, and its staff against negligent acts, errors, or omissions. Depending on the policy, dishonest and fraudulent acts may also be insured. Many policies are tailor-made for the specific needs of the relevant profession.

Why purchase a PI policy

In most cases, when a circumstance that could lead to a claim is reported to underwriters, only legal costs will be incurred, as the claimant doesn’t have sufficient cause to launch a successful claim. For this reason alone, it’s imperative to purchase a PI policy so that sufficient funds are available for frivolous claims.

No matter how good a professional may be, mistakes can sometimes occur. These mistakes often prove to be extremely costly. Ask yourself this very important question: Would you be able to fund the costs to defend and settle a R10,000,000 claim? If not, a PI policy will give you peace of mind.

How much should you insure for?

In many instances, the PI claims are for smaller amounts and R1,000,000 cover will suffice. However, although rare, substantial claims do arise. In general, the amount charged to your client is not in proportion to the claim amount.

These are a few basic guidelines when choosing your indemnity limit:

View the first R1,000,000 as purely for legal costs. Don’t insure for less than your fee income. A limit of twice your fee income is used as a guide by some professionals. Look at your client base and identify where larger claims could come from and what your potential exposure would be. Buy as much cover as you believe is reasonable and affordable.

How to obtain a quotation

Please contact us via phone or email to request a proposal form for completion. Once returned we will approach Insurers for quotes.