The Provision of Services Regulations 2009

As a result of an UK Directive the government has recently brought into force The Provision of Services Regulations 2009 which imposes obligations on "service providers" to provide certain information to their clients. If the service provider has an obligation to hold professional liability insurance certain information about that insurance has to be made available to clients. This note focuses upon that aspect of the Regulations only.

When dealing with claims insurers often instruct their insureds to keep their existence and/or identity a secret (as revealing the existence of Insurers tends to encourage claims). Keeping insurers' existence or identity secret is not usually a condition of the policy of insurance and the new Regulations will make it more difficult for Insurers to keep their involvement hidden from the claimant.

All service providers have to comply with the obligations under the Regulations, save for certain business specifically listed in the Regulations. The exceptions include providers of financial services (banking, credit, insurance and re-insurance, etc).

What are the obligations for Professionals holding Professional Indemnity Insurance?

The Regulations impose obligations on service providers to "make available" various pieces of information to their clients. This includes the provider's name, legal status, VAT number etc. Regulation 8(1) states that where a provider is subject to a requirement to hold professional liability insurance the provider must "make available" to their client the contact details of the insurer and the territorial limits of cover.

The Regulations define "make available" as being:

supplied by the provider to the client, or easily accessible to the client at the provider's office; or easily accessible to the recipient electronically (ie on a website), or contained within a client care/retainer letter. How should Professionals comply with the Regulations

The obligation to make insurance details available only applies to providers who are subject to a "requirement" to hold professional liability insurance. We expect that this will be determined widely such that if a professional is required to hold insurance because they are a member of a professional body, rather than by law, the Regulations will bite. Many professional appointments (eg architects or engineers appointments) have a contractual "requirement" for the professional to carry insurance and we suspect this will also meet the "requirement"...

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