How do the Limit of Liability and Reinstatements apply?
PI Insurance policies may have Limits of Liability from $500,000 up to $100,000,000 depending on the nature of the professional services being performed. This means that should a claim arise a policy will pay up to the Limit of Liability. Limits of Liabilities can either be Inclusive of Costs or Exclusive of Costs. • Inclusive of Costs means that the Limit of Liability includes any costs that are associated with the claim such as defence costs. • Exclusive of Costs means that the Limit of Liability does not include any costs that are associated with the claim and therefore defence costs would be paid in addition to the Limit of Liability. A Limit of Liability that is Exclusive of Costs is typically seen as preferable to a Limit of Liability that is Inclusive of Costs. PI Insurance policies have traditionally offered reinstatements of the Limit of Liability. When there is a claim under the policy a Reinstatement of the Limit of Liability effectively tops up the policy equal to the amoun
