Professional Indemnity Insurance: Who Qualifies and What You Get

Professional indemnity insurance is a mandatory requirement that provides coverage to protect legal professionals against claims of professional negligence.

👤Who it's for

This insurance is specifically for practicing lawyers in New Zealand. It is a necessary component of practicing law within the country to ensure that legal professionals are covered for their professional actions.

🎁What you get

The primary benefit is mandatory coverage against professional negligence claims. This insurance is designed to protect you if a client or third party alleges that your professional services were handled incorrectly or caused them loss. It serves as a safeguard for your practice, ensuring that the financial consequences of such claims are managed through the insurance policy.

💰What it costs you

To maintain this coverage, you are required to pay an annual premium. The specific cost of your premium is not fixed; it is calculated based on two main factors: the size of your law firm and the specific area of law in which you practice. Different legal specialties may carry different risk levels, which will influence the final amount you are asked to pay.

⚠️The catch to know

The most important detail to manage is "run-off" cover. When you change firms or leave a specific practice, you must ensure you have arranged this specific type of coverage. Run-off cover is essential because it protects you against claims that may arise from work you performed in the past, even after you have moved on to a new role or firm. Failing to disclose or arrange this transition can leave you personally liable for previous professional errors.

📝How to apply

• Contact an insurance broker to begin the process.
• Provide details regarding your current firm size and your specific legal practice area.
• Coordinate through the New Zealand Law Society via your chosen broker to finalize the mandatory coverage.