Professional Indemnity | What happens when important documents go missing?

What does a professional indemnity insurance policy cover?
August 20, 2018
Collateral Warranties & Professional Indemnity Insurance
September 16, 2018

Losing important documents when providing a professional service can prove very expensive indeed. If you mislay key documents, your client could have a case against you for a breach of your professional or contractual duties.

The costs of losing documents

Professional Indemnity (PI) insurance can protect you against the financial impact of such claims and the cost of your legal defence. But what a standard PI insurance policy won’t do is cover the expenses involved in reinstating any lost documents.

These costs can be far from trivial. If you are an architect or an accountant, for example, reinstating lost, stolen or damaged documents could require many hours work, with considerable cost attached.

That’s why, Loss of Documents cover is a popular extension to standard PI policies.

What to look for

The limit on claims for Loss of Documents will often be separate to the limit on the main policy. It’s important to ensure you will have sufficient cover, should you need it. For a small design agency, for example, a limit of 5,000 or 10,000 euro might be plenty. But architects, lawyers or accountants may need 50,000 euro or more.

The other important factor to consider is whether an excess applies to any amount you can claim for replacing lost, stolen or damaged documents, and if so, how much. Too high an excess could severely restrict the usefulness of Loss of Documents cover, especially on smaller claims.

Not just a question of liability

The key point to remember is that your PI insurance only covers liability costs, not ‘material damage’. So you could still end up facing significant costs for replacing documents that have been lost or stolen.

With that in mind, it is well worth considering adding a Loss of Documents extension to your Professional Indemnity insurance policy.

If you would like a quotation, please call us on 049-4332944, e-mail or complete our online enquiry form.

Disclaimer: The material contained is this article is for general information purposes only and does not constitute professional advice.

James Martin
James Martin
James Martin has 16 years of experience as a general insurance broker. He is a member of the Chartered Insurance Institute and has completed a Diploma in Corporate Finance.

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