Insurance reporting 101: insurer bad, client good
Bowel cancer is killing 1,200 Kiwis a year

Checklist: what you should consider when buying professional indemnity insurance:

The following points highlight some key aspects an adviser should consider when looking at purchasing professional indemnity insurance.

The Insured

  • Who are the parties named as covered by the policy?
  • Does this include all advisers and entities under which they operate?
  • Does this include cover for administration staff?
  • What happens if I bring someone into the business? When do they need their own cover?

Operative or Insuring Clause

  • Does the insuring clause clearly describe what is insured?
  • Does the cover you understand you have bought meet the cover you need?
  • Are there any activities which you undertake that would not be seen to be included by the business description?

Territory and Jurisdiction

  • Do you offer advice to clients outside of NZ? Does the policy include cover for this advice?

Limit of Indemnity

  • What level of cover are you required to carry under your agency agreements?
  • Does the limit of indemnity you hold reflect the mix of product advice you give now?


  • Do any of the definitions change the meanings of the words or expressions in the insuring clauses or exclusions?


  • Do any of the exclusions remove cover for any activities necessary to conduct your core business?
  • Do any of the exclusions remove cover for any activities necessary to conduct your non-core business?

Excess and related clauses

  • Do you understand how the excess operates in practice?
  • Does the insurer pay the costs and expenses incurred in defence of a claim (or does this fall within the excess)?
  • Is there are a higher excess or deductible for some activities? E.g. Fire & General advice

Other insurances

  • Does your cover extend to other types of insurance, E.g. Public Liability, Statutory Liability?
  • Is Internet Liability the same as Cyber Liability Insurance?

We would like thank Clinton Stanger of Curated Risk Limited for supplying us with the content.


Feed You can follow this conversation by subscribing to the comment feed for this post.

The comments to this entry are closed.