Territorial limits and jurisdiction limits
All professional indemnity insurance policies will specify the policy Territorial and Jurisdiction Limits. These important clauses work together to specify where in the world the policy is providing cover and where it isn't.
What are territorial limits?
The 'territorial limits' are the countries and territories where the policy will provide cover to the policyholder. For policies issued in the UK, there are normally two available policy options: 'United Kingdom' only or 'Worldwide excluding the USA and Canada'.
Standard professional indemnity insurance policies, almost without exception, will exclude any work undertaken in the USA or Canada. The reason is because professional negligence claims in these countries can be significantly larger than the rest of the world, and they are extremely costly to defend.
What are jurisdiction limits?
The 'jurisdiction limits' are the countries and territories where the policy will accept the serving of formal legal action against the policyholder. For example, if a French client claims against you through the French legal system, 'Worldwide' jurisdiction means that the policy will provide cover in the French courts. Jurisdiction limits are usually the same as territorial limits (but not always), and as with territorial limits, there are normally two available policy options: 'United Kingdom' only or 'Worldwide excluding the USA and Canada'.
Specialist professional indemnity insurance would need to be purchased by firms who operate or who have interests in the USA and Canada.
For more information or a discussion with one of our experts, please call 0345 251 4000.