If you offer professional services or advice, then you may face a claim of professional negligence. In this case, professional indemnity insurance can cover any legal fees and compensation payments that may arise as a result of the claim.
To ensure you have the cover you need for any claim you might face, it is vital that you take the time to understand how the professional negligence limitation period might affect claims.
What is Professional Negligence?
A professional negligence claim is an accusation that an individual has failed to carry out their responsibilities to the required professional standard, or that they have somehow breached their duty of care.
For example, a solicitor might offer poor legal advice, leading to financial losses or legal troubles for their client. Or it might transpire that a solicitor has a conflict of interest, which could jeopardise a trial leading to costly delays and other losses for all involved.
If any injured parties decide to make a professional negligence claim against this solicitor, then the solicitor may be held liable for all losses. Dedicated professional indemnity insurance would cover the solicitor for these losses, along with any legal fees that may arise as a result of the claim.
For more information on professional negligence, see our full guide to professional negligence and our guide to professional indemnity insurance for solicitors here.
What Is a Professional Negligence Limitation Period?
The limitation period is a specified timeframe in which individuals can make a negligence claim against a professional.
Standard Limitation Period
Under the Limitation Act 1980, the standard limitation period for most civil claims in England and Wales is six years from the date of the alleged negligent act or omission.
Extended Limitation Period
However, this period may be extended if the negligence is not immediately apparent. Individuals may have three years from the date they became aware of the negligence to make a claim.
In any case, no matter when the negligence or omission was discovered, it is not possible to make a professional negligence claim more than 15 years after the date of the alleged negligent act or omission.
When the Standard Limitation Period May Not Apply
The standard limitation period may not apply to certain situations. For example, in cases of alleged continuous negligence, the limitation period may not commence until the professional ceases to carry out negligent acts.
How Professional Negligence Limitation Periods Affect Insurance
The courts are very strict when it comes to limitation periods. If a claim is issued out of time, then it does not stand a chance, even if the claimant has undeniable proof of a professional’s negligence or omissions.
But at the same time, it is important to ensure that your professional indemnity insurance covers you for any claims that may arise relating to incidents from previous years. Depending on the nature of the claim, claimants may be able to make a professional negligence claim up to 15 years following an alleged incident.
Your professional indemnity insurance policy may specify a retroactive date. This is the date from which your insurer has agreed to cover you. If your policy gives you full retroactive cover, then you will have all the cover you need, even for claims relating to incidents that occurred years ago.
For more about retroactive dates, see our full guide to professional indemnity insurance retroactive dates.
Get Specialist Professional Indemnity Insurance From James Hallam
James Hallam is an independent Lloyd’s broker with a dedicated team of experienced insurance professionals who care about protecting your business.
If you offer professional services and advice, we can advise you on the regulatory requirements concerning professional indemnity insurance, and other forms of cover. We can then help you get the tailored cover you need at a competitive price.