Professional Indemnity

Professional Indemnity insurance claims examples

As these case studies demonstrate, any professional service provider can be held liable for their actions.

These case studies are examples of the types of claims that may be covered under a Professional indemnity policy, but not under a Public Liability policy.

The building consultant
A building consultant was involved in constructing a house. The owners claimed that the weatherproofing failed and sued the consultant alleging negligence. The matter went to a judicial settlement conference.

The building consultant was exonerated but still had to pay over $20,000 in legal costs.

The accountant
An accountant was asked by the client to consider the accounts of the business he planned to buy. The client's business partner had an accountant who provided the figures. The client went on to buy a share in the business.

The business did not do well. The client then claimed against both accountants for providing negligent advice. The claim was later settled and the second accountant paid $25,000 to the client in settlement. 

Although the first accountant was not found negligent, his defence costs amounted to over $100,000.

The building designer
A building designer prepared a town planning application for a self-storage facility using computer-assisted design. While preparing the drawings, there was an error inputting data into the system resulting in the development being three metres shorter than the town planning drawings.

The property was subsequently sold to a development company. During construction it was discovered that only 198 self-storage units would be constructed and not 235.

The property developer is suing for over $500,000 in damages due to loss of income and value of business.

The occupational therapist
An occupational therapist interviewed the claimant for a position as an accredited rehabilitation provider. The therapist rejected the application as he felt that the claimant did not have the requisite WorkCover qualification.

In the same year the occupational therapist discovered that the claimant was working as a case manager for another rehabilitation provider. As the occupational therapist was concerned that the claimant did not have the qualifications he wrote an email to WorkCover and the members of the Association of Rehabilitation Providers in the Private Sector.

The claimant alleges that he is appropriately qualified to practice and tha the email was defamatory and has injured his credit, reputation and occupation. The claimant is seeking compensation for general loss of business, custom, and aggravated damages in excess of $300, 000. 

*Examples produced by Vero Profin for public information.