When buying your professional indemnity insurance you will generally have to answer some questions.
There is an expectation from you to disclose all ‘material facts’ to insurers.
So what is a material fact?
A material fact is a piece of information that would have changed how your insurance quote or terms had the insurer known about this fact.
So how do you know what information will influence an insurer in setting your insurance terms? The answer to that is you might have an idea using common sense but otherwise you don’t really! This is the danger of buying more complicated insurance such as professional indemnity online. A website may ask only a few questions which you answer but that may not elicit enough information on your business.
If a claim comes from a business activity the insurer is not aware of or expecting then you could find yourself having problems in getting the claim paid.
Some simple tips to help ensure you do not come unstuck by incomplete disclosure are as follows:
– be sure you are able to disclose enough information on your business if you are buying online
– check whether your cover includes an ‘innocent non-disclosure’ clause. This gives you some protection if you innocently fail to disclose information the insurer felt was ‘material’ but you did not.
– if in doubt …disclose!
If you follow those few simple pointers you should be in a more secure place and not get punished for an innocent mistake!!