Professional Indemnity Insurance

Hi all

Some advice please. I thought carefully before posting this but as it is an imaginary scenario I see no problem

If a supplier has Professional Indemnity and someone claims on it, but the insurance company refuse to pay out for whatever reason (i.e unrealistic loss of earnings figures), does to liability then fall back on the supplier?

Or can the supplier hold the stance that actually, they did everything they were meant to do (Had PI in place, fixed the problem/accident free of charge) so if the insurance refuses to pay out, tough luck?

What would be the likely outcome if the customer were to file a Small Claims Court order on the supplier?

Adding to this now, lets say that during this claiming process, the customer asked the supplier to do more work, which they did. However the customer (who now knows he is not going to be paid out by the insurance) refuses to pay the supplier for the recent work.

Does the supplier have a case for trying to get his invoices paid by Small Claims Court, or other legal methods as the customer asked them to do more work, whilst under the pretence that they would get paid?

[TamSV]

Just to be clear, are the insurers refusing to pay because their policyholder was dishonest or are they just not settling with the TP because they think they have exaggerated their claim?

If the latter, then the insurer is still standing behind the claim. The employer has to sue the contractor but the insurer will still defend and settle the claim.

IRO the second item, then the contractor can go to court to get paid for the second tranche of work. Straight forward breach of contract. The previous incident doesn't matter.

Seek your own legal advice.


Sounds too specific to be requesting advice from people's experiences etc. Unless we have a PII expert here I would loathe to take advice given with the best of intentions and end up financially out of pocket (potentially quite significantly)

Oh and to add, I'd be provided proof as to how I worked out my loss of earnings that way to the insurance company - sounds like typical insurance company 'We're not paying out f u' behaviour

without more information on why the insurance company are refusing to pay out it's hard to say.

Originally Posted by TamSV

Just to be clear, are the insurers refusing to pay because their policyholder was dishonest or are they just not settling with the TP because they think they have exaggerated their claim?

If the latter, then the insurer is still standing behind the claim. The employer has to sue the contractor but the insurer will still defend and settle the claim.

Possibly because they have exaggerated the claim (not 100% though, but whatever the reason, the policy holder is above board)

Any idea about the rest Tam? Is the supplier wants their invoice paid? etc?

Originally Posted by EssexDave

Seek your own legal advice.


Sounds too specific to be requesting advice from people's experiences etc. Unless we have a PII expert here I would loathe to take advice given with the best of intentions and end up financially out of pocket (potentially quite significantly)

Originally Posted by EssexDave

Oh and to add, I'd be provided proof as to how I worked out my loss of earnings that way to the insurance company - sounds like typical insurance company 'We're not paying out f u' behaviour

without more information on why the insurance company are refusing to pay out it's hard to say.

Thanks Dave.

Will see if I can find a pro in the field.

[TamSV]

Originally Posted by EssexDave

Unless we have a PII expert here

Originally Posted by hongman

Possibly because they have exaggerated the claim (not 100% though, but whatever the reason, the policy holder is above board)

Any idea about the rest Tam? Is the supplier wants their invoice paid? etc?

If that's the case then the claim is still ongoing. This is a liability claim - it's adversarial and what's more it's business. They are not looking to provide a service to the TP - they are providing a service to the policyholder and protecting their joint interests. If the TP can't prove their claim then they'll get nothing. If they think they can win in court then come and have a go .

I'm guessing the TP is trying to represent themselves? They always get shafted if they do that - they certainly would if you were my client . Private individuals get a bit of sympathy and leeway but firms need to be big enough to look after themselves and get some proper representation.

If a summons or solicitors letter arrives, pass it straight to the insurers unanswered and they will either defend or settle based on the merits of the case.

There's nothing wrong with the insurance - it's functioning precisely as it's intended.

Sue for any monies owed. The fact that there is an ongoing dispute regarding a different contract isn't material.

[TamSV]

Just realised my assumption of which side of this you're on might be wrong.

If you're on the other side of it, raise a legal action against the contractor for your losses.

And pay your bills.

Cheers Tam, I'll read this through later properly, off to a meeting!

For what its worth, I'm the supplier