ABSTRACT
This chapter discusses aspects peculiar to professional indemnity policies, and a particular variant of such policies providing cover for the liability of company directors and the officers of companies. Professional indemnity policies are commonly written on a 'claims made' basis, unlike public liability policies, which are usually written on an occurrence basis. A form of insurance quite frequently encountered is a contractor's professional indemnity policy effected in order to protect the liability of a contractor in respect of professional activities carried out. As in other liability policies, it is usually a condition of a professional indemnity policy that the insured shall not settle any claim without the consent of the insurers. Whilst insurers are willing to underwrite contractors' professional indemnity risks, they are unwilling to take on the contractors' commercial and non-professional risks, such as the consequences of poor workmanship. Accordingly the policy will usually define the professional activities and duties that the insurers are willing to cover.
