Compare professional indemnity insurance from Australian insurers and protect your business from legal costs and claims
Professional indemnity insurance provides you and your business with protection for claims made against you or your business. This type of cover is designed for trained workers or businesses that give advice and/or provide a service to individuals or businesses and are looking for a form of protection against legal claims not covered under general insurance policies. Professional indemnity insurance does not generally provide cover for criminal prosecution and a number of other liabilities recognised under criminal law though other forms of insurance may cover these.
Ready to receive quotes for professional indemnity cover from Australian insurance brands? Simply enter your details in the form below. Keep reading to learn more about how professional indemnity insurance actually works.
If you are ready to speak with a consultant about different business insurance options available, simply enter your details in the form. Keep reading if you want to learn more about the different types of cover available.
- Do I actually need professional indemnity insurance?
- Professions that generally require professional indemnity insurance
- What does professional indemnity insurance actually cover?
- What won't professional indemnity insurance cover?
- Additional cover options for professional indemnity insurance
- 3 important features to know about
- How much cover do I need?
- How is professional indemnity insurance different to public liability insurance?
- How much does professional indemnity insurance cost?
- How do I compare professional indemnity insurance?
- How do I make a claim?
- Some final questions you might have
Any worker that provides another person advice and/or a service of skilful nature that has required previous training for an established discipline is recognised as a professional.
There is legislation in place in Australia to regulate the provision of services by professionals. Despite this, mistakes can and do happen in the workplace and will often lead to the professional’s client seeking compensation for damages. A professional can still be liable for losses even if the mistake was not a result of their own negligence. Professional indemnity insurance ensures your business can continue to operate despite having to cover legal costs.
Do you own your own business or provide a service?
Most Australian workers are covered under their employer’s liability cover, however any worker carrying out any consulting or contracting work must ensure that they have adequate and appropriate professional indemnity insurance in place. All professionals should take the time to review the current cover they have in place and assess whether it is worth them taking out additional cover to ensure they are protected from claims against errors or omissions they have made in the provision of their professional activities.Back to top
As mentioned previously, anyone that provides advice or a service to another in an established discipline is a potential candidate for professional indemnity insurance. Some typical professions that will usually require professional indemnity insurance include:
Many professions work closely with Australian governing bodies to determine an appropriate level of professional indemnity cover that is required for their profession. Regulations around what types of insurance are mandatory for different industries can vary from state to state. It might be best to consult with your industry body to get a clear understanding of the specific types of cover you require.
Does work that is supervised require professional indemnity insurance?
Just because the work is supervised by a principal of the company is no reason for workers to think that they may not be liable to defend claims for negligence. In the event that they end up in court on claims for negligence, the cost of legal fees and advice alone could quickly amount to tens of thousands of dollars. This may only be the start of a potential financial nightmare if they are found to be liable.
Do contract workers need professional indemnity insurance?
There have been cases in Australia where contract workers and consultant have still been found to be negligent despite carrying out duties given by principal with whom they were employed. Many companies will now require contract workers to have both professional indemnity insurance and public liability cover in place. If the work the contract worker performs causes damages, they are liable for claims from the employing company.Back to top
Essentially, professional indemnity is designed to cover the policyholder for any legal costs that may be incurred if a client files a claim. Any ensuing compensation that may be required to be paid to the client from the individual or business is also covered. Comprehensive policies will offer cover for claims from clients for financial loss, bodily harm or damage to property due to errors in the provision of the service.
Typical civil liabilities covered under a policy include:
- Breach of duty. Indemnifies the insured for claims arising out of breach of duties including confidentiality, privacy or fiduciary duty
- Consumer protection liability. Claims for compensation resulting from violation of statutory duty
- Contractual liability. Claims breach of contractual agreement that can be enforced in court
- Breach of Competition and Consumer Act and Fair Trading Acts. Indemnifies policyholder for claims arising for breach of Competition and Consumer Act and Fair Trading Acts (Australia and New Zealand)
- Intellectual property. Claims made for the infringement of the use of intellectual property. Most policies will require for the act to be unintentional and for the purpose of the provision of the service
- Unintentional defamation. Unintentional publication of words believed to be defamatory of the client if the insured made the comments innocently
- Contractors or consultants. Liability arising from services provided by contractors or consultants. Indemnity will only provide cover for the policyholder and will not extend to the contractors and/or consultants that have provided the service
- Libel or slander: Liability arising from libel or slander by the insured to the client provided that it was committed during the provision of their professional service and that it was unintentional
- Loss of documents. Loss or damage to the clients documents during the provision of the insured’s service
- Misleading and deceptive conduct. Claims arising where the policyholder has engaged in conduct that is misleading or deceptive in the provision of their service as outlined under the ASIC Act 2001
- Compensation for court appearance. In the event that the policyholder’s legal advisers require the principal or employee of the policyholder’s business to appear in court, the policyholder will be provided with compensation equal to their daily salary to a maximum amount
- Claims investigations costs. Compensation for costs incurred to investigate claims paid in addition to the maximum limit provided under the policy for Australian and New Zealand jurisdictions
- Dishonesty of employees. Policyholder will be compensated for liability in respect of claims made that were the result of dishonest, fraudulent, criminal or malicious acts or omission by an employee of the insured during the provision of their service
- Inquiry costs. Compensation for costs arising out of inquiries into the insured’s liability
- Joint venture liability. Compensation arising from the insured's participation in any joint-venture related to their professional service
- Legal consultation costs. Compensation for costs incurred from legal consultation to the policyholder in the event of a claim
- Public relations expenses. Indemnifies the policyholder for adverse public relations expenses that arise during the policy period
- Spouse liability. In the event that a claim is made against the policyholders spouse, the claim will be treated as the liability of the insured’s
- Extension of claim period. In the event that a claim is made against the insured up to a specified number of days following the expiry of the policy, the insured will still remain covered under the policy
The conditions of the cover features listed above will each have their own set of conditions for compensation to be paid which may vary greatly between policies. It is crucial that anyone looking to take out cover is absolutely clear on the requirements for a claim to be paid and the maximum compensation that they stand to receive under claim.Back to top
Each policy will have its own set of exclusions whereby the insurer will not be liable to pay compensation to the insured in the event that a claim is made. Some typical exclusions listed on professional indemnity policies include:
- Claims arising following cancellation of policy: It is not unusual for many claims to be made against businesses and/or professionals a significant period of time following the provision of the service and even after they have ceased business. As many professional indemnity policies expire when they are cancelled, the policy owner may not be covered for claims made against them even if they have already retired. This can be avoided by taking out a policy with a “run off” extension discuss in the section below
- Claims arising following switching insurers: If the policyholder is covered by a policy provided by their employer and they have changed employers and switched insurers, it is unlikely that they will be covered for claims made for the business they provided with their previous employer. It is also unlikely that any compensation will be provided as the previous cover is likely to have expired. In this event it is worth the worker checking with their new insurer what provisions they have for previous claims
- Known circumstances: Generally, the insurer will not receive compensation for events that they were aware of prior to the commencement of the policy period
- Professional fees: Compensation will not be paid for any claim arising from the insured for claims by clients for fees or charges for their professional service. No refund of fees or charges from the insured will be paid by the insurer
- Asbestos: Claims or legal costs that arise in respect of asbestos
- Radioactivity and pollution: Claims that are attributable to or are the consequence of radioactivity or pollution
- Dishonest, fraudulent or criminal acts: Claims arising where the policyholder has intentionally engaged in dishonest, fraudulent or criminal acts
- Fines and penalties: Claims arising for compensation to cover fines or penalties suffered by the insured
- Directors or officers: Liability arising from claims where the insured was acting in the capacity of the director or officer of a company or organisation
- Insolvency: Claims made against the insured where all or part of the claim is attributed to the insolvency of the insured or their suppliers/contractors
- Licensing enquiries: Claims made against the insured for failing to be properly licensed, registered or accredited to provide their professional service
- Manufacturing, efficacy, faulty workmanship: Claims for loss arising out of poor manufacturing or faulty workmanship by the insured
- Owners and occupiers liability: Claims arising from occupation, leasing or ownership of any rental or other property
- Retroactive date: Claims for things done or that are thought are to have taken place prior to the retroactive date
- Superannuation trustee: Any claim arising from connection or conduct between the insured and a superannuation trustee
- War or act of terrorism: Any claim arising from war or terrorism regardless of any cause or event.
These are very broad definitions of some typical exclusions that may be placed on certain policies. It is essential that anyone looking to take out cover is aware of all policy exclusions and the conditions for claim payment prior to applicationBack to top
In addition to the default cover provided under professional indemnity insurance policies, applicants also have the option to increase their level of cover with a number of policy extensions.
Run Off Cover
It is not unusual for many claims against professionals and businesses to take place a number of years following the provision of the service to the client. Run off cover will provide an extension of the policy cover after the policy has expired and/or the policyholder has retired or the business has ceased. It is worth having an understanding of how professional indemnity insurance is designed to provide cover on a “claims made” basis.
How long should run off cover be taken out for?
This will vary between individuals and organisations. Government bodies can provide advice on an appropriate run off period based on the service provided. It is best to review the legislation on the profession to determine how long following the provision of the service that claims can be filed and legal proceedings commenced against a professional.
Claims Made Cover
Claims made professional indemnity insurance provides cover for the insured from the date that they become aware of an event that may result in a claim. Notice is then given to the insurer who must work within the conditions of the policy to defend the claim. This means that the insurer must work to settle the claim even if the event leading to the claim took place when the policyholder was insured under another policy. This ensures that workers that have changed employers are still covered for events that took place for service provided to previous clients.
Fidelity insurance indemnifies the policyholder for direct losses suffered as a result of dishonest acts of their employees. Fidelity insurance generally covers loss or misappropriation of client’s funds that were under the control an employee in their business. This cover can be taken out as a separate policy or included as an extension of the standard professional indemnity insurance policy.
Common exclusions for fidelity insurance
- Loss must be discovered by the insured during the period of insurance
- Insurer must be notified of loss within a specified period of time. This will be outlined in the policy disclosure statement
- Cover is not provided for losses that have occurred following the discovery by the insured of such conduct by the principal, director or employee or after the insured had reasonable grounds for suspicion of the act occurring
- Indirect or consequential loss is generally not covered. This may include liability to third parties, trading losses, investigation costs or damages of any kind
- Insured must be able to substantiate to the insurer any loss covered by this policy extension
- Each policy will have a sub-limit applied for liability payable to the insured in the event of a loss occurring
3 important features of your policy to know about
1. The Policy Retroactive Date
The retroactive date refers to the date after which your professional indemnity insurer will cover any acts, errors or omissions committed by you. In other words, any acts, errors or omissions that occur prior to this date will not be covered by your policy. However, there are two ways in which the retroactive date can be listed – unlimited or specified – so you’ll need to check the fine print of your policy to see which definition your insurer uses.
- Unlimited Retroactive Date: The insurer will cover claims relating to acts, errors or omissions regardless of when they occurred.
- Specified Retroactive Date: Policy restricted to cover claims that arise from acts, errors or omissions that occur after the date outlined in your policy documents.
Some insurers limit the retroactive date to the time your business first took out professional indemnity cover but, ideally, you will typically hope for the retroactive date to not be any later than the date your business began offering services to customers. If you change to a different professional indemnity insurer, in most cases the retroactive date in place will be carried forward by the new insurer so that past work you have performed is still covered.
2. Costs inclusive limit of indemnity vs. Costs exclusive limit of indemnity
The limit of indemnity is the maximum amount an insurer will pay in regard to any one claim made against you. However, it’s important to check whether your policy has a costs inclusive limit of indemnity or a costs exclusive limit of indemnity.
- Costs Inclusive: Includes defence costs in the maximum amount it will pay for a claim. So if your policy offers $3 million cover, costs inclusive, and if a claim is made against which requires you to pay a liability of $3 million to the claimant but also sees you incur legal defence costs of $300,000, your policy will only cover the $300,000 of legal costs plus $2.7 million of liability. That leaves you with $300,000 left to cover out of your own pocket.
- Costs Exclusive: Legal defence costs are covered in addition to the limit of indemnity, which therefore makes it a more desirable option for most businesses.
3. Costs exclusive excess vs Costs inclusive excess
It’s also important to check whether the excess payable under your professional indemnity insurance policy is costs exclusive or costs inclusive. With a costs exclusive excess, you won’t have to pay an excess when you incur legal costs during the successful defence of a claim. Instead, you’ll only have to pay an excess if you have to pay compensation in respect of a claim.
On the other hand, a costs inclusive excess is payable when you incur defence costs – regardless of whether you end up having to pay compensation to the claimant or not. That’s why it makes sense to look for a policy that offers a costs exclusive excess.
How much cover do I need?
Unfortunately there is no set answer for how much cover you should take out. Every business is different and there are different regulations in place for minimum cover required for certain professions. As an example, accountants are required to have a minimum of $2 million cover in place with up to $75 million in cover if charging fees over $2.5 million. These requirements can also vary from state to state.
Some other factors to consider that will impact what you pay for cover include:
- Clause of contract. Most contracts will specify a minimum amount of cover that the worker must have in place to carry out the project.
- Type of project and value. This is the correlation between the value and size of the project being undertaken and the workers exposure to claims for professional negligence
- Perceived exposures. Assessment of possible causes of loss, injury or damage that may lead to a claim being brought against you.
- Number of parties relying on advice. If the nature of the project means that advice will be passed onto more than one party, the worker may be liable for claims from other parties affected.
- Cost of defending a claim. Some policies will have an additional limit applied for the actual cost of defending a claim. Lengthy court cases can quickly run into the tens if not hundreds of thousands of dollars.
- Willingness to carry risk. This requires the worker to assess how much of the risk they are willing to carry themselves with a lower policy limit or by transferring the risk to other parties.
- Cover for previous claims. Professional Indemnity Insurance is of a "Claims Made Basis" . This means that cover can apply for claims made against the worker for previous activities. With this in mind it's important to consider the potential value of claims in the future following inflation.
Determining an appropriate level of cover is no easy task. It's worth taking the time to speak with a financial adviser to help you assess the risks you are exposed to and what protection packages may be suitable.Back to top
Professional indemnity insurance must be able to provide adequate cover for the insured to be protected from any civil liabilities that may arise from the provision of their service either from themselves or by others working on their behalf. This cover must be broad enough to extend to past, current and future work. Professional indemnity policies will generally provide cover for:
- Each party identified in the policy schedule. This may include people, firms or incorporated bodies
- Past, present and future principals
- Any entity that is created or under the control of the insured that performs a professional service during the policy period
- Past, present and future employees of the insured. This may extend to include volunteer workers and students
- Liability of the principal from previous business conducted for the same service that is listed under the current schedule
- Entities that have previously traded with the business insured under the policy
- Subsidiary companies of the insured
- The insured’s spouse
- Legal entities of the insured
Some (but not all) policies may also include cover for:
- Joint venture liability
- Liability for professional service that has been provided by an agent or consultant
Everyone is regulated under common law to not cause damage to anyone or their property or to cause them any financial loss. This liability is known as ones general duty of care and is separate to the professional liability that professionals have in the provision of their business to ensure that their client does not suffer any injury, damages to property or financial loss.
|Professional Indemnity||Public liability Insurance|
Can I be covered under the one policy?
One of the main reasons that people often get confused between these different types of cover is because many policies will provide cover for public, product and professional liability under the single policy. This is usually outlined in the product cover features and exclusions though it can be difficult for applicants to know exactly what events they will be covered for. Many professional indemnity insurance policies will have exclusions in place for injury or damages to property and vice versa. As an example, a professional indemnity insurance policy may have the cover extension that provides cover for claims arising out of “Manufacturing, Loss or Faulty Workmanship” though this may recognise personal injury or damage to property as a loss.
The risk is that many policyholders may actually be significantly underinsured from particular losses by relying on one umbrella policy to provide adequate cover for public, product and professional liability. It is worth speaking to an insurance consultant to help them find and tailor a policy closer to their needs.
Brian is a property management specialist in charge of his own property management firm. A claim of mismanagement was brought against Brian’s firm in regards to a multi-tenancy block of units. The claimant alleged that Brian’s firm had failed to arrange necessary remedial works and maintenance, failed to chase up rental payments from tenants and neglected to report and provide expenses and receipts from third-party contractors.
The amount claimed against Brian’s firm was $1 million. After investigating the claims against the firm, Brian’s professional indemnity insurance provider argued the case in court. While the claims against the property management firm were proved, the insurer’s legal team were able to negotiate a substantial reduction to the claim, which was eventually settled at $545,000. Around $50,000 in legal costs were also incurred.
Happily, Brian’s professional indemnity insurance had a costs exclusive limit of indemnity of $2 million, which meant that the compensation amount and the legal costs incurred were all covered by Brian’s insurer. However, Brian did have to pay an excess of $5,000 to contribute towards the claim amount.
As with most types of protective insurance, the cost for cover to be taken out can vary dramatically depending on the insured’s cover needs. In the case of professional indemnity insurance, this will depend on whether the policy is for a sole trader or for a business looking to provide cover for a significant number of employees. While sole traders may be able to get adequate cover for just a few hundred dollars, the cost of insuring a multinational company could run into the hundreds of thousands of dollars. Key factors that impact what you pay include:
- Number of staff employed by company and annual turnover. Sole traders or companies with say 15 employees won't require the same level of cover as large-scale organisation.
- Types of clients that company/professional services. Professionals that work on large-scale,. multi-million dollar projects will require a higher level of cover than smaller firms.
- Industry. The nature of the service provided and the level of risk for claims being made will impact how much is paid for cover.
- Policy inclusions and exclusions. Obviously more comprehensive protection packages with increased levels of cover will cost more than more basic policies.
The cost of professional indemnity insurance is largely based on the percentage of your companies total legal spend and the likelihood of the company being taken to court. The insurer that you go with and the policy that you choose will also play a major role in the final cost of cover.
Quote example for professional indemnity cover
The example below is an online quote obtained from insurer CGU. Please note this price is only to be used as a broad example of what may be paid for cover and does not take into consideration additional factors that may increase or decrease the monthly premium. The example assumes there has been no history of previous claims or any previous declines for cover.
|Business Details||Example 1||Example 2|
|Occupation||Accounting Services||Fitness Instructor|
|Gross professional fees earned in last 12 months||$300,000 - $400,000||N.A|
|Number of premises||1||1|
|Level of cover||Comprehensive||Comprehensive|
|Professional indemnity limit||$5 million||$5 million|
|Liability cover||$10 million||N.A|
|Monthly Premium (Indicative Price)*||$307.66*||$88.55*|
Is professional indemnity insurance tax deductible?
Yes. According to the ATO, premiums for professional indemnity insurance are tax deductible.Back to top
With so many different cover options available on the Australian Professional Indemnity Insurance market, it is crucial that any sole trader or business looking to take out cover take the necessary steps to compare different options to ensure they are receiving adequate cover at the right price.
- Default cover features: It is critical that anyone looking to take out cover closely review the cover features listed in the product disclosure statement to know exactly what liability they will be covered for. Refer to this section for an overview of typical cover options
- Policy extensions: Most policies will offer a number of additional cover options to applicants to ensure there is an adequate level of cover in place. Such extensions may include run off cover and fidelity insurance
- Limit of liability: Each insurer will clearly state the maximum compensation that will be paid for each claim within the product disclosure statement
- Policy exclusions: Each insurer will have its own set of exclusions for when a policy will not be paid. It is critical that these are reviewed closely when comparing policies to avoid any surprises in the event that a claim is made further down the track. It is not enough to just skim over these…the conditions for payment must be closely reviewed and understood
- Entities covered under the policy: Each policy will list the parties that will be covered under the policy. It is critical that any business owners looking to take out cover for employees and other entities related to their business that they have a clear understanding of whom exactly is covered for the provision of professional services
- Professional services provided in the past: It is vital to have a clear understanding of how your insurer deals with claims for work that you carried out with a previous employer or while covered under a previous policy. Many policies will not recognise claims that have been made outside of their retroactive date
- Cooling off period: Each provider will offer a cooling off period whereby you will have the option to cancel your cover if you feel it does not meet your needs. This is generally about 21 days
- Claim conditions: Insurers will have conditions in place for the payment of claims for different liability faced by the insured. Some key aspects of the insurers claims conditions to review include;
- Alteration to risk
- Cancellation / Termination
- Changes to the policy
- Worldwide territorial / jurisdictional limits
In the event that a claim is made against the insured, it is their duty to inform the insurer as soon as possible. Notice is to be put in writing and sent to the insurer by courier, fax or certified mail. The insurer will recognise that notice has been received once their underwriting division has received the notice.
Every letter, demand, writ, summons and legal process pertaining received by the insured related to the claim must also be forwarded across to the insurer.
Most insurers will have claims form located on their website for the insured to complete. These will usually be comprised of the following sections:
- Details of the insured
- Policy details
- General information about the claimant or potential claimant
- Details of the insured’s retainer/contract
- Details of the claim or circumstance
- Details of the insured’s response
- List of relevant documents that have been attached to the claim form
- Insured’s declaration
Conditions to be aware of when making a claim
Claims co-operation: In the event of a claim, the insured will do everything in their power to provide all necessary documentation and evidence to the insurer relevant to the claim that is made. They will also do everything in their power to diminish the loss and assist with the defence, investigation or settlement of any Claim. This is to be done at the insured's own cost.
Advance payment of claims expenses: The insured will advance payments of necessary expenses that may be incurred in the defence of a civil liability claim. All payments must be repaid to the insurer in the event that the insured is not eligible for payment of such claim expenses under the terms of the policy.
Claims conduct: In the event that a claim is made:
- Insurer is entitled to take over and conduct in the name of the insured to defend any claim made
- Insurer reserves the right to deny cover to the policyholder as it assesses a claim or conducts defence on behalf of the insured
- The insured or insurer will not contest or litigate the claim if the senior council is of the belief that attempts should be made to reach a settlement for the claim
Allocation: In the event that there is a claim made for losses that are both covered and not covered under the policy, the insured and the insurer will work together to agree upon a fair and proper allocation between covered loss and uncovered loss by taking into consideration the financial exposure to both covered and uncovered parties.
Defence and settlement: The insured will not admit liability or settle a claim without first receiving the insurers consent.
Other insurance: In the event that the insured may be covered under other forms of insurance, they must give complete details of this cover to the insurer. Most policies will not cover any claim or loss that may be covered under another policy.
Who is considered a professional?
An individual that provides advice and/or a service in an established discipline is considered to be a professional. This may be anyone from lawyers to architects to graphic designers.
Why is professional indemnity insurance necessary?
Each professional is responsible for showing duty of care in the provision of their service to clients and members of the public. In the event that in the course of provision of the service the client suffers a loss through an act, error or omission by the professional, professional indemnity insurance protects the professional from financial loss that may be suffered from any claims. Some workers will be required to hold a professional indemnity insurance policy by law either as a contractual requirement or to be a member of an association relevant to their field.
How do I get professional indemnity insurance?
Cover can be purchased either directly from the insurance brand or with the help of a financial adviser. An adviser can help you determine an appropriate level of cover and assist you with your policy application.
What is the difference between a “claims made and notified policy” and an “occurrence policy”?
- Claims made and notified: Any fact, situation or occurrence that may lead to a claim being made must be notified to the insurer within the period of insurance. If the policy has retroactive cover in place, the event leading to the claim could have taken place prior or after the period of insurance. The insured must not have any prior knowledge of any known circumstances that may have resulted in a claim.
- Occurrence policy: Event leading to a claim must take place during the period of insurance, though the insurer can be notified of the event at any time following.
When should an insurer be notified in relation to a claim made?
An insurer should be notified at the occurrence of any fact, situation or circumstance that would provide a reasonable basis for belief that a claim might be made against the insured. The earlier that the insurer is notified the less the likelihood of a successful claim being made against the insured.
What is loss of documents?
The loss of documents as recognised under professional indemnity insurance is the loss of a third party's documents that were in the possession of the insured. A claim may only be filed if the insured has suffered a financial loss as a result.
Do insurers charge excess in the event of a claim?
There are two types of excess that may be applied to the policy:
- Costs inclusive: Excess applied to legal costs and settlement.
- Costs exclusive: Excess applied to actual settlement of a claim. No excess is paid if matter is successfully defended.
Costs exclusive is more desirable to policyholders but is only offered by select insurers and at a higher premium.
What is covered under civil liabilities professional indemnity insurance?
Policyholder is indemnified from claims arising from civil court. This is in comparison to criminal liabilities that may be involved by a criminal court.
What is the policy inception date?
This is the start of the policy period.
What is the retroactive date?
This is the date whereby events, acts errors or omissions by the insured that may lead to be a claim following will be covered.
What is hold harmless clause?
A hold harmless agreement is an agreement in contract between two parties whereby the recipient of that clause is “held harmless” by the other contracting party or anybody else claiming against the recipient for events related to the contract. This effectively means that the professional cannot be held liable by the contractor for any claims or loss in respect of the service provided. This can cause issues for insurers if they wish to subrogate against another party for the recovery of a claim for another party that is found to actually be liable. If the other party has a hold harmless clause in place, little can be done by the insurer to recover this claim.
What is automatic reinstatement in professional indemnity insurance?
Professional indemnity insurance policies will have a benefit limit that can be paid for the total sum of claims made against the insured in the policy period. Automatic reinstatement allows the aggregate limit to be increased, while the sub-limit for individual claims will remain the same.