The Provision of Service Regulations 2009 - professional indemnity insurance disclosure

The Provision of Service Regulations came into effect on 28 December 2009, imposing obligations on ”service providers” to disclose certain information to their clients.

“Service providers” are very widely defined in the Regulations as ‘any self-employed economic activity normally provided for remuneration’. This would seem to cover all professionals however it should be noted that there are certain exclusions, such as the providers of financial services.

So far as professional indemnity insurance is concerned, Section 8 – (1) of the Regulations imposes an obligation on the provider of a service to make available to a recipient of the service, subject to a requirement to hold any professional indemnity insurance, the contact details of the insurer and the territorial coverage of the insurance. There is no requirement however to provide any other information, such as the limit of indemnity.

The Regulations define “make available” as:

•Being supplied by the provider to the client
•Easily accessible to the client at the providers office
•Easily accessible to the recipient electronically
•Or contained within a client care/retainer letter.

It is important to note that the obligation to make insurance details available only applies to providers who are subject to a “requirement” to hold professional indemnity insurance. Thus, where a professional is required to hold insurance because they are a member of a professional body rather than by law, the Regulations will apply.

The same will apply to professionals who have a contractual “requirement” to carry insurance. However, if the professional is not obliged to hold insurance, but does so merely as a matter of good practice, they are not obliged to comply with the insurance disclosure provisions of the Regulations.

In addition, should you have the misfortune to have to notify a claim under the terms and conditions of your insurance policy, there is no obligation to notify the claimant or their representatives that you have notified your professional indemnity insurers or broker.

If any professional is unsure about their individual requirements having considered the Regulations, they should seek guidance from their Regulatory Body or Institute. In addition, we are here to provide help and assistance.