PI Pointers

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The Insurance Institute of South Africa (IISA) recently hosted a forum where the issue of Liability was discussed. One aspect which caught my eye concerned PI cover.
While many of us are aware of PI cover, there are certain technicalities which need to be planned for when taking out the cover.

Nhlanhla Dube, Head of PI Underwriting at SHA, pointed out that one of the most important aspects to bear in mind with PI cover is the retroactive date. “The retroactive date indicates the inception date. However, this date will be lost if there is a break or gap in cover, and work performed prior to this date will not be covered.”

moonstone-post dube

This can potentially cause a problem for professionals as a claim may not be immediate. A client may not be aware of a claim, or may sit on a claim for financial reasons and only institute a claim against the professional at a time when there is a break in PI cover. Dube stressed the importance of a policy renewal to extend the duration of the cover and the need to increase the limit as your company grows.

There is also the option of runoff cover. This covers any activities performed by a company prior to its closure or when the person who performed the duties retires; because your liability does not end on the day the doors close or the day staff retire.