PI claims · South Africa

Professional indemnity claim examples.

PI claims rarely look like malpractice. They look like a late launch, a miscalculated integration, or advice a client relied on and lost money following. Here is what they look like in South African tech businesses.

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At a glance
  • Defective integration causing revenue loss
  • Missed deadline collapsing a client campaign
  • Migration that corrupted client data
  • Strategic advice that failed commercially
  • Unintentional IP or copyright infringement
  • Notification errors that void otherwise valid claims

Six scenarios that trigger PI

Each of these is a real pattern seen across SA agencies, developers and consultants:

  • Payment integration rounding error under-bills customers for months — R2.4M claim.
  • Ecommerce replatform launch slips past Black Friday — client claims lost trading revenue.
  • Data migration drops historic records with no rollback — remediation and regulatory cost.
  • Media strategy built on flawed audience analysis — client claims wasted spend.
  • Stock imagery licensed for web reused in print — infringement claim from rights holder.
  • SLA reporting overstates uptime — client alleges misrepresentation and claws back fees.

What PI pays, and what it does not

PI pays defence costs, expert evidence and damages awarded. It does not pay to redo the work, refund your fees, or cover the contractual penalty you agreed to in the SLA. Budget for those separately.

The notification rules that decide the outcome

Cover is preserved or lost in the first 48 hours:

  • Notify the insurer as soon as you become aware of a circumstance — not when summons arrives.
  • Do not admit liability or apologise in writing in terms that concede fault.
  • Do not offer free remediation as a settlement without insurer consent.
  • Preserve all project records, tickets and correspondence immediately.
FAQ

Frequently asked questions

What is an example of a professional indemnity claim?+

A typical example: a development agency ships a payment integration with a rounding error, the client under-bills customers for four months and sues for R2.4M in lost revenue plus remediation. PI pays the legal defence and any damages awarded, subject to the limit and excess.

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How long does a professional indemnity claim take to settle?+

Most South African PI matters resolve in 6–18 months. Straightforward matters settled commercially close in a few months; litigated technical disputes with expert evidence can run past two years.

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What should I do if a client threatens to sue?+

Notify your insurer immediately as a circumstance, before you respond to the client. Do not admit liability, do not offer a fix or a refund as settlement, and route all correspondence through the insurer's appointed attorney. Late notification is a common reason claims are declined.

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Will claiming increase my PI premium?+

A notified circumstance that closes with no payment usually has little effect. A paid claim typically increases the next renewal premium by 15–40% and may attract a higher excess for two to three years.

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Does PI cover a claim after I finish the project?+

Yes, provided the policy is still in force when the claim is first made and the retroactive date predates the work. If you close the business or stop trading, run-off cover keeps that protection alive.

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