Understanding the jurisdictions that apply, not only to their “home” market but to other markets where a firm offer services, is important because it helps determine the applicable legal framework for PI liability; the frequency of claims that could be expected; whether PI insurance is compulsory; and the implications of providing advice in a country where the organization does not have permanent operations.

2. What scope of professional services does the organization provide?

With many professional firms presenting themselves as multi-service organizations offering a range of advisory services, risk and insurance managers need to be fully aware of the different service models in use and exactly which services are being offered in which territories in order to ensure that their PI insurance adequately covers them against all potential claims scenarios.

3. Who needs to be insured?

Clarity on this question is crucial, however many organizations fail to determine at the outset precisely which of their operating entities and their people are exposed to the risk of a PI claim in the different jurisdictions in which they operate.

4. What are the key elements of a PI insurance program for our organization?

In order to determine how their PI exposures can best be insured, firms first need to consider a number of basic key elements by which PI insurance is delineated so they can determine their specific needs, including the period of insurance, defense costs, retroactive date, types of liability covered, claims handling requirements, and territorial and jurisdictional limitations.

5. How should a multinational PI insurance program best be structured?

Practical and technical considerations that need to be explored when structuring multinational PI insurance programs include whether parent/headquarter level only coverage is required, whether subsidiary/local affiliated offices level cover is needed, or if a combination of the two would provide better protection. Consideration of the legal status of “non-admitted” policies locally is also key.

6. Has the role of excess insurance adequately been considered?

The role of excess insurance, either of the primary policy or excess cover as an umbrella tower purchased outside the jurisdictions where an organization's risks are situated, also need to be considered as excess insurance policies are governed by the same regulations and tax rules as those applying to the primary policies.

Mr. Cairns said, “Across many parts of the world, the requirements for key professions to carry PI insurance have been increasing. As a result, astute risk and insurance managers at global professional services firms are rightly seeking to apply their experience gained in structuring multinational insurance solutions for traditional classes of business to PI insurance.”

Mr. Krishnan added, “When purchasing specialty lines of insurance – and especially multinational PI insurance – choosing an insurance partner with a proven track record of multinational expertise and servicing capabilities is crucial to managing expectations of program performance across international borders and understanding how the program will respond whenever and wherever needed.”

Learn more: Structuring Multinational Insurance Program.