International businesses face unique challenges when arranging and maintaining PI insurance, especially when it comes to cross-border legal support and operating in multiple jurisdictions.
The COREDO team has implemented projects where it was necessary to provide PI coverage for companies with distributed teams, offices in the EU, Asia and Africa, as well as for digital legal platforms operating at the intersection of multiple legal systems.
Key features:
- The need to take into account cross-border legal risks and differences in international business law.
- Requirements for PI insurance can vary significantly depending on jurisdictional requirements: coverage limits, list of risks, requirements for the insurer.
- When arranging PI insurance for international business, it is important to choose an insurer with experience in the relevant regions and with licenses in the corresponding jurisdictions.
- In some cases, providing documents in multiple languages is required, confirmation of corporate structure, KYC procedures, information about Due Diligence and AML compliance.
- Maintaining the policy requires regular reporting, policy renewal terms and confirmation of claims history.
COREDO’s experience shows: integrating PI insurance into the corporate risk management policy (risk management framework) not only reduces the likelihood of a denial of payment, but also increases process transparency for regulators and partners.
Thus, choosing Professional Indemnity Insurance requires a systematic approach taking into account the specifics of international business, the particularities of regulatory requirements and the company’s risk architecture.
How to choose professional indemnity insurance?
Making the right choice and arranging PI insurance requires a systematic approach.
At COREDO we recommend the following process:
- Business risk assessment:
Conduct an audit of business processes, identify potential areas of professional negligence, contractual liability, cross-border legal risks, determine the list of services and the geographic scope of operations. - Determining the coverage limit:
The PI insurance limit should correspond not only to the regulator’s minimum requirements but also to the actual risks of the business. For international companies it is optimal to calculate the limit based on turnover, transaction size, number of clients and the specifics of services.
In COREDO’s practice for companies with turnover from €5 million the PI limit often amounts to €2–5 million per insured event. - Choosing an insurance broker and insurer:
It is important to choose an insurance broker with experience in your industry and region. Check licenses, claims history, policy excess (retention) terms, availability of endorsements and extensions for specific risks. - Document preparation:
Typically, articles of incorporation, licenses, corporate structure, information about key personnel, a description of due diligence processes, AML compliance, KYC procedures, and claims history are required. - Underwriting and policy issuance:
The underwriting process includes risk analysis, assessment of corporate structure, review of compliance procedures, agreement on coverage terms and cost.
Don’t forget about continuous cover; it is important that PI insurance covers all past periods of activity (retroactive date). - Monitoring and renewal:
Regularly review limits, terms, policy renewal terms, integrate PI insurance into business processes, and train the team to handle claims.
Typical mistakes that lead to denial of payments:
- Failure to notify the insurer of a claim in a timely manner (claims-made policy).
- Incorrect description of activities or corporate structure.
- Exclusion of key risks from the policy (policy exclusions).
- Lack of endorsements for specific services (e.g., AML, fintech, digital legal platforms).
COREDO recommendation: when arranging PI insurance for AML providers and companies that register legal entities, be sure to include options for cyber risks, data loss protection, breach of confidentiality, and also consider PI insurance for due diligence providers and risk management firms.