How to File a Claim Under PI Insurance?

Professional indemnity or PI insurance claims refer to a process through which a professional seeks financial protection after a client alleges negligence, error, omission, or breach of duty in the services provided.

In simple terms, a PI insurance claim is triggered when a professional's services or work cause financial loss to the client. Filing a proper PI insurance claim is crucial for professionals to avoid delays and rejection.

Professionals should file a professional indemnity insurance claim as soon as possible upon becoming aware of the issue. Here are some common scenarios that trigger PI claims.

Allegations of Negligence

One common reason when the PI claim is triggered is when a client accuses the profession of negligence while performing the duties. If the services or advice offered to the client were below standard or incorrect and caused the client a loss, they can sue the professionals.

Formal Legal Complaints

Another common scenario when a PI claim is triggered is when you received the formal complaint or legal notice from the client for the services you offered. You must not respond to the complaint without informing your insurer.

Regulatory Investigations

A professional indemnity insurance claim may also arise if a regulatory body initiates an investigation into your professional conduct. Such investigations can be time-consuming and expensive, even if no wrongdoing is ultimately proven.

Discovery of Errors

Another situation that can trigger a professional indemnity insurance claim is when you discover a mistake or error in your work which the client has not yet realised. Any mistake or error that could cause financial loss may invite complaints or lawsuits.

Contractual Disputes

Contractual disputes are another common reason for professional indemnity insurance claims. These arise when a client alleges that the services delivered did not meet the terms of the contract.

A professional indemnity insurance claim process is straightforward. Here are the steps to follow when you want to file a professional indemnity insurance claim in India.

Step 1: Notification of Claim

To start the professional indemnity insurance claim procedure, you need to notify the insurer about the incident as soon as possible. This intimation should include the detailed information about the incident, the nature of the error and more. Failure to notify the insurer can delay the process.

Step 2: Fill Out Claim Form

After notifying the insurer about the claim, you need to fill out the PI insurance claim forms. Ensure all the details entered in the claim form are correct. Submit the claim form and other documents to the insurance provider. Ensure the timely submission of the claim form and other documents.

Step 3: Claim Investigation

Upon receiving the intimation, the insurer will begin investigating the incident to verify the legitimacy of the claims. They will verify the claim documents, gather relevant documents, interview witnesses, and more to evaluate the incident. The surveyor will prepare a report based on their investigation.

Step 4: Evaluation of Coverage

Along with the claim investigation, the insurer will also evaluate the professional indemnity insurance policy. They will verify the policy documents to determine whether the claim or situation falls within the policy's scope. Based on that, they will verify the claim coverage for policyholders.

Step 5: Negotiation and Settlement

Once the claim coverage is confirmed and the investigation is complete, the insurer will begin negotiations with the claimant. The negotiation will focus on the extent of liability, the amount of compensation, and related matters. The purpose of the negotiation is to reach a settlement which both parties approve.

Step 6: Dispute Resolution

If either party does not agree with the proposed settlement, the matter moves to dispute resolution. At this stage, methods such as mediation or arbitration are used to resolve the issue outside the court, helping save time and legal costs.

Step 7: Litigation

If all attempts to resolve the dispute outside the court fail, the claim proceeds to litigation. In this case, the matter is taken to court, and the insurer supports the insured with legal defence and related expenses, as per the policy terms. Based on the evidence presented, the court delivers a judgment and determines the final liability or compensation, if any.

Step 8: Settlement Payment

Upon receiving the court's judgment, the insurer will pay the final compensation amount to the claimant. This settlement amount will cover the legal expenses, financial losses, and any other losses the claimant might have suffered due to the professional negligence.

Step 9: Claim Closure

Upon the final payment to the claimant, the claim concludes, and the insurer closes the PI claim procedure. It is crucial to document the claim settlement amount and the judgment for record-keeping purposes.

To submit a successful claim, you need to provide the required documents. Here is the list of documents required for a professional indemnity insurance claim.

• Duly signed and filled claim intimation form

• Original professional indemnity policy document

• Proof of claim notification, such as a legal notice, formal compliant, summons, etc

• Detailed report of the incident with date, time and description

• Proof of professional services

• Identity and address documents

• Financial and damage-proof

• Any other documents requested by the insurer

There are certain rights that policyholders holds when filing a professional indemnity claim. These rights include:

Right to Prompt Notification

One of the basic rights policyholders hold is the right to promptly notify the insurer of the incident. A timely notification about the incident ensures that the insurance provider initiates the claim process early and investigates the case efficiently.

Right to Information

Policyholders are entitled to receive clear information from the insurance provider about the coverage limit, the claim process, and the policy terms and conditions. This clear information helps in avoiding confusion during the claim settlement process.

Right to Legal Representation

Policyholders have the right to seek legal representation from an advocate and a lawyer during the litigation. Legal counsel will guide and negotiate on behalf of the policyholder and the insurer.

Right to Dispute Resolution

Policyholders have the right, as outlined in the policy, to opt for dispute-resolution mechanisms such as mediation or arbitration to resolve disagreements without going to court.

Right to Appeal

If the policyholder is not satisfied with the outcome of a claim or judgment, they have the right to file an appeal, subject to the terms and conditions of the policy and applicable laws.

Knowing the professional indemnity insurance claim process is crucial for professionals to carry it out smoothly. Any delay or discrepancy in filing a PI claim can result in claim rejection. Therefore, professionals must understand the claim process when purchasing the plan.

TATA AIG offers a customised PI Insurance plan with a smooth claims process. We have a team of claim assistance on board to guide you through the claim procedure. Whether it is confusion about documentation or help with litigation, our representative will assist you round a clock. Buy our customised professional indemnity insurance plan now!