For law firms and sole practitioners alike, it is critical that the limit of cover offered under your Professional Indemnity insurance policy is adequate for your business.

We strongly recommend you review your limit to determine whether an increase in cover, beyond what may be offered by your professional indemnity fund. For attorneys this is Legal Practitioners Indemnity Insurance Fund which offers a primary layer of insurance to its members in possession of a valid fidelity fund certificate.

So exactly what considerations should be taken into account to determine the correct limit of indemnity ?

You should consider the size of your firm, the areas of law which you practice, and the minimum limits of indemnity required by banks on whose panel you may serve.  In some cases, tenders and service level agreements may dictate the limit of indemnity to be held by the firm.

Make sure you consult a professional indemnity specialist who can walk through these scenarios with you and advise on the Top up and extensions (which operate independently from top up)  options available.

Top up cover can be likened to gap cover which bridges the gap (pays the shortfall) between what the primary insurers pay and the actual loss or claim.

The limit offered by professional indemnity funds is often not adequate on its own, especially if the following were to occur:

o   Your firm is faced with more than one claim in a year.

o   You firm is sued in one matter which alone exceeds the limit offered by the fund.

o   Your firm has a several high profile matters on the go at any one given time.

o   Directors in smaller firms are not present all the time resulting in ineffective delegation and /or supervision of staff.

o   The type of work conducted is prone to errors.

o   Defamatory claims were to be instituted against your firm.

Contact Shackleton Risk today, the risk specialists.

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