As a patent or trade marks attorney you are providing professional advice to your clients daily. If you make an oversight, error or omission with this advice, the other party may suffer a financial loss and as a result bring a claim against you for these losses. Professional Indemnity Insurance is designed to cover you for the claimed amount, as well as the associated defence costs, subject to the terms and conditions of the policy.

This will depend on a number of factors such as your profession, your business needs and the clients you work with. Some professions are required by law to hold a minimum level of cover, and some clients may require you to have a minimum level of cover to work for them. Many PI Insurance policies start at a minimum cover of $1 million, but you should decide the appropriate limit for you and consult with your broker about this if you need to.

Professional indemnity will cover your business for vicarious liability for claims you may incur as a result of work done by a sub-contractor for or on your behalf. It does not, however, cover the contractor directly as it would an employee.

This is because as a sub-contractor they will likely also provide services to other businesses and parties, and naming them as an insured may potentially expose you to liabilities outside your business, that are completely outside of your control. Due to this we do recommend that any sub-contractors engaged, maintain their own insurances to cover the work they do for other clients.

The standard territorial limits under the policy are worldwide excluding USA or Canada. If you are providing 10% or less of services to clients within the USA or Canada this coverage can be extended to cover you for your services worldwide.

By extending the territorial limits, this will cover you for activities or services anywhere is the world. However, all claims under the policy would need to be brought against you in a Court of the Commonwealth of Australia.

If you are providing any services which require more detailed consultations (such as if more than 10% of your services are to clients outside of Australia), Aon will work with you accordingly.

Professional Indemnity is a claims-based insurance. This means that a policy needs to be active when a claim arises in order to respond, even if this event that lead to the claim occurred several years ago. Due to this, if you do cease trading we recommend maintaining what is called a “run off” professional indemnity policy. This is an active policy that will cover you for activities when you were trading, to ensure you have cover in place when a claim is made afterwards, up to 7 years.