Why do I need PII when my contract is over?
Many contractors don't realise that their PI insurance only covers them for claims made within the policy period.
Your business remains potentially liable for the work performed and any issues arising may not surface until sometime after the project is completed.
Doesn't the PI policy I paid for still cover me?
Only if the policy is kept running.
Professional Indemnity insurance provides cover for any claims you become aware of during the policy period, even though the work may have been undertaken before the policy began.
So what's the solution?
To avoid being uninsured at the time of a future claim against you, you should keep Professional Indemnity Insurance cover without any time gaps. This means that the policy covers ongoing work as well as any claims arising from work in the past. You can renew with the same insurer, or with different insurers, the key is maintaining continuous cover.
How long am I liable?
The answer to this lies in the various legal limitation periods that apply. Always obtain qualified legal advice on your circumstances but as a general guide these are typically:
- 6 years from first awareness of the issue by the claimant if the work was carried out under a simple contract, or
- 12 years from first awareness if the work was agreed via a contract under seal.