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Professional indemnity

How the risk/need for professional indemnity insurance arises

There are two main factors that explain how the need for professional indemnity (PI) cover originates. These are as follows:

a. Potential breach of professional duty

A professional person should exercise the degree of skill and care that would be expected of any other competent practitioner in the same profession. If the degree of care and skill falls below this standard, causing financial loss, injury or damage to the client, or another third party, a potential action for damages could arise.

b. Work for outside clients Roles

The majority of work undertaken by university staff is the usual educational activities of the establishment ie tuition provided to individuals whether as full time day students or in part time evening courses. Legal liability for these activities is covered under the public liability policy.

Course fees and Government grants are paid to the university to provide basic education and the activities outside of that are those that should be covered under the PI part.

Services covered under the separate PI part are those of a commercial training, research and consultancy nature where fee income is charged for the work done. The work being undertaken would need to involve some element of 'advice, design and specification'.

Examples of such activities are:

  • Running specifically written training courses in tanker safety for the employees of a commercial company where the contract is between the University and the company.
  • Carrying out stress analysis work for industrial organisations.
  • Designing parts for technical industries.

A potential risk falls upon universities who offer a specialist service to outside clients where a mistake could be interpreted by the courts as a 'professional' one. The public liability policy specifically excludes 'professional liability, errors and omissions' which is why separate PI cover is required.  

Page last updated on Tuesday 8 March 2016 at 2.59pm.

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