Core PI concepts
The architecture of professional indemnity insurance — the claims-made trigger, civil liability cover, retroactive dates, run-off cover, standard exclusions, and the common-law duties they respond to.
25 entries
Bolam test
The Bolam test, from Bolam v Friern Hospital Management Committee [1957] 1 WLR 582, is the UK standard for determining breach of duty in professional negligence cases: a professional is not negligent…
Bolitho test
The Bolitho test, from Bolitho v City and Hackney Health Authority [1998] AC 232, is the qualification of the Bolam standard under which a court may reject a body of professional opinion relied upon b…
Breach of confidentiality
Breach of confidentiality cover is a professional indemnity extension that indemnifies the insured against legal liability and defence costs arising from the unauthorised disclosure, use or misuse of…
Breach of duty of care
Breach of duty of care is the second element of the tort of negligence in English law, occurring where the defendant fails to act with the standard of care that a reasonable person — or in professiona…
Caparo v Dickman
Caparo Industries plc v Dickman [1990] 2 AC 605 is the House of Lords decision that established the tripartite test for the existence of a duty of care in negligence — foreseeability of damage, suffic…
Civil liability
A civil liability wording is a professional indemnity insuring clause that responds to any legal obligation to pay damages owed by the insured to a third party arising from the conduct of the professi…
Continuous coverage clause
A continuous coverage clause is a provision in a claims-made professional indemnity policy that preserves indemnity for a circumstance which the insured ought to have notified in an earlier policy yea…
Defamation cover
Defamation cover is a professional indemnity extension that indemnifies the insured against legal liability and defence costs arising from the unintentional publication of defamatory matter in the cou…
Dishonesty exclusion
The dishonesty exclusion is a standard professional indemnity policy term that excludes cover for liability arising from the dishonest, fraudulent, criminal or malicious acts of the insured, usually s…
Hedley Byrne v Heller
Hedley Byrne & Co Ltd v Heller & Partners Ltd [1964] AC 465 is the House of Lords decision that established a duty of care in tort for negligent misstatements causing pure economic loss, founded on a…
Insolvency exclusion (PI)
An insolvency exclusion is a clause within a professional indemnity policy that removes or restricts cover for civil liability arising directly or indirectly from the insolvency, bankruptcy, administr…
IP infringement cover
IP infringement cover is a professional indemnity extension that indemnifies the insured against legal liability and defence costs arising from the unintentional infringement of a third party's intell…
Known circumstances exclusion
A known circumstances exclusion removes cover under a professional indemnity policy for any claim arising out of a fact or matter that the insured knew, or ought reasonably to have known, was likely t…
Limited liability partnership PI
Limited liability partnership (LLP) PI is professional indemnity insurance written for an LLP — a body corporate registered under the Limited Liability Partnerships Act 2000 — covering civil liability…
Loss of documents (PI cover)
Loss of documents cover is a professional indemnity extension that indemnifies the insured for the reasonable costs incurred in replacing, restoring or reconstituting documents in the insured's custod…
Negligent act, error or omission
'Negligent act, error or omission' is the historic professional indemnity insuring trigger that responds to liability arising out of an alleged breach of professional duty in the tort of negligence, n…
Partnership cover (PI)
Partnership cover is professional indemnity (PI) insurance arranged for a traditional unincorporated partnership of regulated professionals, indemnifying the firm and its partners against civil liabil…
Practising certificate insurance
Practising certificate insurance is the professional indemnity (PI) cover that a regulated professional must hold as a condition of obtaining or renewing the practising certificate, licence, or regist…
Prior acts coverage
Prior acts coverage is the element of a claims-made professional indemnity policy that extends indemnity to civil liability arising from acts, errors, or omissions committed before the start of the cu…
Professional indemnity insurance
Professional indemnity insurance is a contract of insurance that indemnifies a professional firm or individual against legal liability to third parties arising from negligent acts, errors or omissions…
Retroactive date
The retroactive date in a claims-made professional indemnity policy is the earliest date for an act, error, or omission of the insured that the policy will cover; any conduct before that date falls ou…
Run-off coverage
Run-off coverage is the continuation of a claims-made professional indemnity policy after the insured firm has ceased trading, designed to indemnify civil liability claims made against the firm for wo…
Sole practitioner cover
Sole practitioner cover is professional indemnity (PI) insurance arranged for a regulated professional who carries on business as an individual without a separate corporate or partnership vehicle, ind…
Solicitors Compensation Fund
The Solicitors Compensation Fund is the statutory client protection scheme established under section 36 of the Solicitors Act 1974 and administered by the Solicitors Regulation Authority, providing di…
Solicitors Indemnity Fund
The Solicitors Indemnity Fund (SIF) is the historic mutual professional indemnity scheme for solicitors in England and Wales, established by the Law Society in 1987 and now operating in long-tail run-…
Insurance Act 2015
The statute that reshaped UK non-consumer insurance law — duty of fair presentation, warranty reforms, proportionate remedies, and the section 13A claims-handling duty.
15 entries
Consumer Insurance (Disclosure and Representations) Act 2012
The Consumer Insurance (Disclosure and Representations) Act 2012 reformed pre-contractual disclosure in UK consumer insurance, replacing the duty of disclosure derived from the Marine Insurance Act 19…
Contract certainty
Contract certainty is the market principle that the complete terms of an insurance contract must be agreed between the insurer and insured before the contract incepts, and that contract documentation…
Enterprise Act 2016 amendments
Part 5 of the Enterprise Act 2016 amended the Insurance Act 2015 by inserting section 13A (and the associated contracting-out provision in section 16A), creating an implied term in every contract of i…
Fair presentation of the risk
The duty of fair presentation requires a commercial insured to disclose every material circumstance it knows or ought to know, or to give the insurer sufficient information to put a prudent underwrite…
Inducement (insurance)
Inducement is the requirement that an insurer establish, as a matter of fact, that a misrepresentation or non-disclosure actually influenced its decision to enter into the contract or to do so on the…
Insurance Act 2015
The Insurance Act 2015 is the principal statute governing non-consumer insurance contracts in the United Kingdom, introducing the duty of fair presentation, reforming warranties and providing proporti…
Late payment damages (Enterprise Act 2016)
Late payment damages are damages recoverable by an insured for breach of the implied term in section 13A of the Insurance Act 2015 — inserted by section 28 of the Enterprise Act 2016 — that insurers m…
Marine Insurance Act 1906
The Marine Insurance Act 1906 is the foundational codification of English marine insurance law, drafted by Sir Mackenzie Chalmers and still in force, but substantially amended by the Insurance Act 201…
Material circumstance
A material circumstance is one which would influence the judgement of a prudent insurer in deciding whether to accept the risk and, if so, on what terms, and must be disclosed to satisfy the duty of f…
Material misrepresentation
A material misrepresentation is a statement made by the insured in connection with an insurance contract which is false in a material respect, was relied on by the insurer in entering the contract, an…
Reasonable search (Insurance Act 2015)
A reasonable search is the enquiry that an insured is required to make under section 4 of the Insurance Act 2015 to identify material circumstances within its organisation so as to satisfy the duty of…
Section 11 of the Insurance Act 2015
Section 11 prevents an insurer from relying on non-compliance with a contractual term tending to reduce the risk of loss of a particular kind, at a particular location, or at a particular time, where…
Section 13A claims handling duty
Section 13A of the Insurance Act 2015 implies into every contract of insurance a term that the insurer must pay any sums due in respect of a claim within a reasonable time, breach of which entitles th…
Warranty (insurance)
A warranty in insurance is a term by which the insured undertakes that some particular thing shall or shall not be done, or that some condition shall be fulfilled, or whereby the insured affirms or ne…
Warranty into a suspensive condition
Section 10 of the Insurance Act 2015 abolishes the rule that breach of warranty automatically and permanently discharges the insurer's liability, converting warranties into suspensive conditions under…
Aggregation
How multiple claims combine against the limit — the AIG v Woodman line of authority, originating cause, series-of-related-transactions wording, and the SRA Minimum Terms composite clause.
10 entries
Aggregate limit
An aggregate limit is the maximum total amount an insurer will pay across all claims made or notified under a liability policy during the policy period, irrespective of the number of separate claims.
Aggregation clause
An aggregation clause is a policy provision that treats two or more claims, losses or circumstances as a single claim for the purposes of the limit of indemnity, the excess, or both, where they share…
Deductible
A deductible is the amount of each loss the insured retains before insurer indemnity engages; in modern UK usage the term is largely interchangeable with "excess", although it retains specific histori…
Each and every loss
"Each and every loss" is a basis on which a limit, excess or deductible applies separately to each individual loss or claim, rather than collectively across all losses in the policy period.
Excess (insurance)
An excess is the amount the insured retains on each claim before the insurer's indemnity engages, functioning as a first-loss layer that the insured must absorb either from its own resources or from a…
Originating cause
"Originating cause" is the broadest of the unifying factors commonly used in aggregation clauses, treating losses as a single claim where they can be traced back to a common underlying source even tho…
Per claim limit
A per claim limit is the maximum amount an insurer will pay in respect of each individual claim under a liability policy, irrespective of how many separate claims are notified during the policy period…
Series of related matters
"Series of related matters" is an aggregation trigger that treats claims as a single claim where they arise from the same act or omission, or from similar acts or omissions, occurring in a series of s…
Series of related transactions
"Series of related transactions" is an aggregation trigger that treats claims as a single claim where they arise from the same or similar acts or omissions occurring across a sequence of transactions…
Single act or omission
"Single act or omission" is a relatively narrow aggregation trigger that treats claims as one claim only where they arise from the same identifiable act or failure to act on the part of the insured.
Commercial insurance
The mainstream commercial classes — business interruption, public and employers' liability, directors' and officers', product liability, trade credit, cargo.
10 entries
Business interruption insurance
Business interruption insurance is the class of commercial insurance that indemnifies a business for the loss of gross profit, revenue or earnings, and the increased cost of working, that it suffers a…
Cargo insurance
Cargo insurance is the class of marine insurance that indemnifies the owner of goods - or another party with an insurable interest, such as a buyer, seller or financier - against loss of or damage to…
Combined commercial policy
A combined commercial policy is a single package insurance contract that bundles several standard business covers - typically property damage, business interruption, public liability and employer's li…
Commercial insurance
Commercial insurance is the collective term for non-consumer insurance products purchased by businesses, partnerships, sole traders, charities and other organisations to transfer the financial consequ…
Directors and Officers insurance
Directors and Officers (D&O) insurance is a liability product that protects directors, officers and certain other senior managers of a company against personal financial loss arising from claims alleg…
Employer's Liability (Compulsory Insurance) Act 1969
The Employer's Liability (Compulsory Insurance) Act 1969 is the United Kingdom statute requiring employers carrying on business in Great Britain to maintain insurance against liability for bodily inju…
Employer's liability insurance
Employer's liability insurance is the compulsory class of insurance that indemnifies a UK employer against legal liability to pay damages, and associated costs, to employees who suffer bodily injury…
Product liability insurance
Product liability insurance indemnifies a manufacturer, importer, supplier or distributor against legal liability to third parties for accidental bodily injury or property damage caused by a defect in…
Public liability insurance
Public liability insurance protects a business against the financial consequences of being held legally liable for accidental bodily injury to, or property damage suffered by, third parties (members o…
Trade credit insurance
Trade credit insurance is a pecuniary insurance product that indemnifies a business against the risk of non-payment by its commercial customers for goods or services supplied on credit terms, principa…