Case Study

Professional Indemnity

Client Industry: Tax Accountant

Annual Turnover: £3.5m with approximately 15 employees

Output Achieved by UK & Global:

  • After being appointed mid-term by the client, UK & Global was able to gain confirmation of indemnity for 40 claims from the Professional Indemnity Insurer, who appointed Counsel to evaluate whether indemnity should apply.

Through analysis of an ‘inherited’ policy wording, UK & Global were able to counter some investigative objections by Counsel and establish that indemnity must apply.

The total cost of the Professional Indemnity claims was over £2m

Client Requirement

The Client received a number of Claims for alleged mis-selling of Tax-related advice in respect of Stamp Land Duty Tax following retrospective change in the relevant Legislation effected by the government.

  • Around 35-40 Claims were received which were putting strain on the Client’s relationships with its Customers
  • The Client’s Professional Indemnity Insurer reserved its rights in relation to confirming Indemnity due to the volume / scale of the Claims involved
  • It was unclear, due to the nature of the Claims received, as to whether the Client would have to pay the Policy excess for each of the Claims or just one Policy excess in total

UK & Global Solution

  • We held a number of meetings with the Client to agree a Plan of Action which was primarily focused on Full Disclosure by all relevant correspondents to the Client’s Professional Indemnity Insurer
  • UK & Global undertook a thorough review of the individual clauses within the Professional Indemnity wording and were able to defend the Client’s position in a number of areas
  • UK & Global obtained independent, specialist legal advice on behalf of the Client to provide further reassurance of the Client’s position

Outcome & Benefit to the Client

  • After a relatively short period of time the Client’s Professional Indemnity Insurer confirmed that Indemnity would apply to all Claims
  • Agreement was reached that the Client would only need to pay one Policy excess in total
  • The Client was able to return to undertaking its normal activities confident that the Claims were being dealt with in a routine manner by its Professional Indemnity Insurer