When an excess becomes payable on a Professional Indemnity Insurance claim depends on the wording of your policy and how the excess applies.

An excess may also be referred to as a deductible.

One important distinction is whether defence costs are included within the excess.

Costs inclusive excess #

Where the excess is costs inclusive, the excess can apply to defence and investigation costs as well as damages or settlements.

This can mean you are required to contribute the excess once the insurer begins incurring covered costs, such as legal or expert fees.

Costs exclusive excess #

Where the excess is costs exclusive, defence costs may be covered without requiring you to contribute the excess.

The excess may instead apply to damages, compensation or settlement amounts, depending on the policy wording.

Always check your policy #

Professional Indemnity policies do not all treat excesses in the same way.

The timing and amount payable can depend on:

• Whether defence costs are inclusive or exclusive of the excess
• The type of claim
• The policy wording
• Any endorsements applying to your policy
• Whether different excesses apply to particular activities or claims

If a claim arises, we can help explain how the excess under your policy applies and when the insurer may require payment.