# Typical Rate for Professional Indemnity Insurance



## BootDog (24 Mar 2005)

Anybody know the typical rate for professional indemnity insurance? As far as I know, it is billed as a % of turnover - is this in the 0.1%, 5% or 10% range?

The situation is as follows:
Employee being contracted out to Third party firm (a bank).
Third party insists on E1,000,000 cover for liability, relating to public liability (death and injury), property damage, and professional indemnity.
Industry is services to the banking industry (payments processing).

My view is that public liability should be provided by the third party as it is their premesis & property etc., but they have a case for professional indemnity being provided by the contracting company.

Any views?

Bootdog


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## sim (25 Mar 2005)

My understanding of PI insurance is that yes the premium cost is related to the turnover,your companys track record(experience etc) and also to the level of cover you require. i also think the rates are different in different areas of business. In my field of expertise (engineering) PI cover jumped nearly threefold in one year alone and that was without any claims etc. Your insurance broker should be able to get quotes however I know when trying to get PI cover for an independent venture I was contemplating i got swamped in paperwork and gave up!
Regarding the Public Liability maybe they mean employers liability? I understand Public Liability as protection against claims from the public on their premises etc which they would have whilst employer liability as protection of your employees in the event of an accident/death on company time.
Will check roughly what % we pay of turnover and revert.


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## Brendan Burgess (25 Mar 2005)

Hi BootDog

I run an employment agency and we get our insurance through Brennans Insurances, whom I would strongly recommend you should use. I am at home today, but I will post the contact details when I am back in the office.

Forget insurance for the moment - as an employment agency supplying contract staff who are on our payroll, we have three  potential problems:

Our recruitment consultants could act negligently e.g. they could supply an accountant who had been convicted of fraud to a client. The accountant defrauds the client. The client would certainly be able to make a claim against us. If we could have or should have known, or worse still, did know about the conviction, we might be held liable. We have PI insurance against such an occurrence. To the best of my knowledge there has been no claim against any agency for negligence in this field.

Our clients sometimes ask us to provide employers' liability insurance. We refuse on the grounds, that although we pay the employee, they are under the control of the client. Irish legislation and precedent specifically recognises the client as the employer. We have no legal liability in common law. Nor can the client "contract out" of the legislation which says that they are the employer. 

We are also asked to provide Public Liability insurance. Say one of our contractors, while working for the client, beats up a customer of the client. Again we refuse, as we have no control over these circumstances. 

We would not be able to get insurance which would cover the liabilities of the client as we don't have an "insurable interest".

You should of course get professional advice on your own particular situation. My PI insurance does not cover me for misleading advice given on AAM!

Brendan


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## Imperator (25 Mar 2005)

*Public Liability Insurance*

Brendan

If I read your post correctly, you supply contractors to work on various client premises.  The contractors I assume are in the main self employed as sole traders / limited companies etc.

While your firm may not need to have a public liabilty policy for these people, I imagine they in themselves should have Public Liabilty Insurance.  They have places of business and carry out work on sites themselves. 

Could one of your clients say "O.K., we don't need to see you provide a policy for Mr. X, but make sure that Mr. X himself has a public liability policy" ?

Imperator


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## elderdog (26 Mar 2005)

*Re: Public Liability Insurance*

Is P.I. cover always provided on a claims made basis ?

My impression is that it is.

If true then you have a multi year exposure for work done in any one year.

This can result in you having to maintain your P.I. cover for several years after you cease doing whatever it is you got the cover for in the first place.

eDog


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## sim (26 Mar 2005)

*Re: Public Liability Insurance*

yeah Elderdog is correct, in our business you are obliged to maintain PI cover for normally 6 years and in extreme cases up to 12 years. This is ok if you are operating year after yar but if it was only for a one off it is quite onerous.
Brendan is also quite right in advising you speak to your broker as they can help you tailor the cover to your requirements based on their experience etc.


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## BootDog (26 Mar 2005)

*Re: Public Liability Insurance*

Thanks for the replies,

It appears this is a bit of a pandora's box...

Among the issues that have popped out:
- questionable as whether there is an "insurable" interest that I can base any cover on
- would an insurer insure my business and contractor on the basis of a risk/premesis that is not at all in my control
- even given favourable outcomes to the above, there's a risk of having to maintain cover much longer than the intended contract period

With regard to the issue of a client company having cover, or insisting that all subcontractors have their own cover, I vaguely remember covering some of this at premium renewal time for a related business. End result was that we decided to keep public liability cover for a) the sub-contractors that do not have cover themselves (e.g. either we don't check if they have cover, or they say that they have cover, but actually don't - and again, we don't verify their statement); or b) visitors to the premesis, who aren't expected to have cover themselves.

I intend to talk to a couple of insurers in the next week or two, or sooner if the issue is forced. If I dig up anything, I'll add it to the post.

I'd still appreciate if someone can give a typical rate for comparison though...

Bootdog


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