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West Midlands IT Association (WMita) |
Circle Insurance Services in conjunction with WMita have negotiated a Professional Indemnity Insurance Policy, underwritten by Hiscox Insurance Company Limited, which is exclusively available to WMita members.
Hiscox Insurance, the UK's leading specialist insurer, has a long history of creating unique insurance solutions to accurately protect the businesses of its policyholders. Their success is founded on an indepth knowledge of the industries they cover, in particular the ICT Industry, enabling them to develop tailored protection.
| Why Do I Need Professional Indemnity? - Your Risks Clients often have high expectations of their consultants and most of the time you won't have a problem delivering. However, through no fault of your own, your clients may not always fully understand what you do. This can lead to false expectations and disappointment on the part of the client. You may be sued for breach of contract and this could cost you severely. In fact, you could be sued for an amount far in excess of the value of the job. That's when professional indemnity insurance comes into action. When things go wrong our Professional Indemnity Insurance will protect your financial interests. Our specialist policy can also protect your professional reputation and, most importantly, your relationship with your clients. |
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What Am I Covered For? - Back to top
The plain English policy also provide:
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| How Does This Work in Practice? - Back to top In today's political environment of European Harmonisation and consumer protection, the law has an ever widening application and many of our clients find themselves embroiled in expensive disputes without realising that they had done anything wrong. Failing to defend these allegations properly could cause irrepairable damage to the reputation and financial stability of their business. Examples of how our policy works for professionals: - An international software manufacturer/distributor was asked to deliver a large software and hardware implementation for a window manufacturer. The implementation was eventually completed, but only after the client had requested significant additional functionality. They then contracted a litigation expert who alleged that there were 650 faults with implementation, thereby entitling the client to rescind the contract. The manufacturer, consulted Hiscox and subsequently sued for all outstanding fees, viewing the alleged claim as unfounded. A multi million pound counter claim was made which Hiscox fully defended. The case was eventually struck out by the courts. A court ordered that our insureds fees and costs be paid. Installing a booking and accounting system at a hotel caused one of our insureds a major headache. The hotel threatened to make a significant claim unless our insured refunded them for the cost of the software and paid significant damages. Hiscox and their advisors investigated and evaluated the actual facts. It seems the complaints arose from the fact that the hotel staff did not properly understand how to use the system. Hiscox wrote, rebutting the claim made against our insured and offered extra training. We heard nothing further. Not everyone sues. Many contracts include arbitration clauses, but arbitration can be just as, if not more, expensive than litigation. One of our insureds had a dispute with a large mainland European company. Change of management meant our insured fell "out of favour" and as a consequence numerous and vague allegations were made in order to terminate the contract and avoid paying the outstanding sums owed. Our insured proceeded to arbitrate for the outstanding sums. The client counter claimed. With the full backing of Hiscox the Claimants were ultimately defeated and were forced to pay over a large part of the outstanding fees and incurred costs of the action. We paid £330,000 in costs, and recovered 85% from the Claimant. Sometimes there's nothing wrong with the system, but this doesn't mean there are no claims. Another IT Insured administered the back office of a finance house. Unfortunately, a hole appeared in the reconciliations and the finance house could have made a claim for £700,000. The insured worked with Hiscox, and discovered a number of administrative errors, which properly reconciled some of the account errors. Unfortunately this did not address the whole problem. Ultimately Hiscox paid £300,000. |
| How Can I reduce my Exposures with Risk Management? - Back to top Four steps every consultant should take! Good insurance cover is essential in the event of a professional indemnity claim, but most consultants would prefer to avoid getting to a situation where such a claim is necessary. We hope the following steps will provide some useful guidance when advising your clients. Step 1 - Always have a contract in place It sounds simple enough, but we often deal with claims where a contract has not been agreed before work commences. The contract between consultant and client is particularly important for ICT Companies as it forms the framework for the services provided. Whilst other professionals may be sued for negligence, ICT Consultants tend to be sued for breach of contract. ICT Companies should therefore ensure that there is a contract in place before any chargeable work commences. We also recommend that all contracts are drafted by a solicitor experienced in IT Law, particularly standard terms and conditions. It's important these are reviewed regularly as the ICT industry is ever changing and that all non standard contracts are referred to a solicitor. This also applies when dealing with suppliers (e.g. subcontractors or hosting companies) as a contract ensures they have protected themselves should something the supplier is responsible for go wrong. A contract related claim…… A consultant started a project for a client without a written contract in place. The project ran into difficulties when the client claimed the consultant was responsible for an area of the project the consultant didn't agree to. The client withheld fees and eventually sued the consultant for the cost of a new system. This could have been avoided if there was a written contract in place with responsibilities clearly stated. Step 2 - Document client requirements. Careful documentation of what has been agreed between client and consultant when supplying a system is essential. A common source of dispute is when the client believes they have asked for a system that does one thing and the consultant has delievered a system that does another. This situation can be avoided by meticulously recording the agreed system specification to show acceptance.. Further changes that creep in as the project progresses should also be documented, costed and signed off so a definitive record is maintained. A documentation claim….. Recently we handled a situation where a comapny faced a claim of more than £1m from a client alleging the new workflow system did not do what had been agreed. Had the specifications not been properly maintained, it would have been very difficult to prove that the system did in fact meet the agreement and to defend the action. Step 3 - Have a complaints procedure in place. When issues do arise, dealing with them quickly and appropriately can prevent them developing into a major problem. A written complaints procedure which escalates problems to an appropriate level is therefore essential. A complaints claim….. A client raised a complaint with a new accounting system that was being implemented. The company failed to deal with the complaint in a timely and appropriate matter. This led to increase antagonism between the parties, the client withheld fees and eventually sued for breach of contract. Step 4 - Have the right insurance policy in place - Just in case. A specifically tailored Professional Indemnity Policy will provide protection in areas a standard policy may miss. Here are some examples:
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How Can I Obtain A Quotation? - Back to top
Upon receipt of the proposal form, quotations will be turned around within 48 hours of receipt, unless additional information is required. |
| Continuous Protection - Back to top Every company complains about the completion of a proposal form every year as some insurance companies have considerably long proposal forms this task can often prove tedious. Hiscox Insurance recognise this fact and you may be eligible for your policy to be written on a continuous basis. This means that you avoid the inconvenience of having to complete a proposal form and renew your policy each year and you benefit from the peace of mind which continuous protection brings. Your policy will remain in force for as long as you choose to keep the monthly direct debit payment in place. Reducing our administration costs in this way means that we can achieve lower premiums for you. |
| What Payment Options are Available? - Back to top The policy premium can be either paid by Cash, Cheque or 12 monthly instalments "Interest Free" direct to Hiscox. |
| How Do I Make Claim? - Back to top In the unfortunate event of a possible claim, be it verbally intimated or in writing, please notify ourselves immediately, so that the Hiscox can be alerted to a possible claim. Alternatively, you can contact Hiscox Insurance Company direct on 0870 241 6257. Their claims team are experienced in dealing with professional business risks and are trained to resolve problems with your commercial interests in mind. The policy also gives you access to a general advice line to assist in the day-to-day running of your business. This free, 24 hour helpline will ensure you have the best advice when facing complex legal or business issues at home or abroad. For advice on:
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What Other Covers Can Be Provided? - Back to top Alternatively, if the office package does not fit your individual requirements, The professional Indemnity Policy can also form part of the Hiscox Professional Insurance Portfolio. This is a suite of insurance modules giving you the flexibility to meet all your insurance needs in one policy. Modular covers include employers liability, public and products liability, employment practises liability, directors and officers liability, personal accident, business travel, internet and property insurances. For more information on this package please contact Alex Gray on 0845 009 3802 |
