The scope of cover in a professional indemnity policy varies significantly depending on the nature of the alliance project and the underlying risks, as well as whether the policy offers first-party and third-party cover. Typically, the scope of cover for a professional indemnity policy includes:
• breach of professional duty;
• negligence;
• bodily injury and property damage arising from negligence;
• fraud or dishonesty, other than a company director's dishonesty;
• infringement of intellectual property;
• breach of duty or confidentiality;
• defamation;
• loss of documents; and
• legal costs.
The main difference between third-party and first-party cover is the trigger event. A third-party contract is typically triggered by a claim of one party against another. A first-party insurance policy is triggered where the alliance makes a claim in its own right, independent of any third-party claim.