The loss of a loved one is a difficult and often distressing time, and the role of a funeral director is a significant one. You provide an empathetic service, making arrangements so that families and friends can say goodbye, as well as offering guidance and support during what is a painful period. As a funeral director, in addition to taking care of funeral arrangements, it’s important to look after your business and make sure you have the right funeral director insurance cover.
What is Professional Indemnity Insurance?
While it is not legally required, Professional Indemnity, or PI, insurance will protect you if, in the course of your business, you are alleged to have provided inadequate advice or services to a bereaved family. It will also cover the cost implications if the client makes a claim, saving you from financial loss.
Listed below are the main areas in which we have seen professional indemnity claims made by customers:
Correct identification of the deceased
It is of the utmost importance to the families of the deceased that their loved ones are correctly identified at all times whilst in your care.
Claim example
Circumstances: The wrong cremated remains were given to a family raising concerns that the deceased was not actually present at the funeral service.
Payment: £26,000
Collection and release of cremated remains
A robust written audit trail should always be carefully maintained concerning details of the collection, storage, and release of all cremated remains.
Claim example
Circumstances: A family returned cremated remains when they noticed the label on the urn had another person’s name on it.
Payment: £4,000
Why is PI cover important for funeral directors?
While funeral directors are extremely professional and conscientious, mistakes can happen in any line of work. For example, paperwork could be completed incorrectly or there may be errors in the funeral arrangements, causing considerable upset to a grieving family.
In these circumstances, a claim for negligence could be lodged against you. You would then need to fund your defence and, if you lost, pay the claim. PI insurance means that you will be covered for the legal costs and expenses incurred in defending a claim, as well as any compensation that is payable to your client.
As a funeral director, you may look at trying to deal in-house with issues or distress caused during the funeral service. Solutions, such as waiving part or all of your fees, are a common way to solve this, however in the case that this is not sufficient, PI cover provides a safety net for your business to financially deal with a claim and protects your reputation.
Is any cover available as part of my National Association of Funeral Directors membership?
PI insurance cover can vary from insurer to insurer. However, if you are a National Association of Funeral Directors (NAFD) member, you automatically receive invaluable Professional Indemnity insurance cover as part of your membership.
The cover from your NAFD membership ensures you have all of the protection you need for your funeral business, including:
• Loss of documents or data
• Negligence
• Dishonesty
• Confidentiality breaches
• Defamation
Please be aware, there is a standard excess of £750 for each and every claim.
Many PI insurance policies have an aggregate limit, what does this mean in practice?
Let’s say the NAFD membership policy had an aggregate limit of £5m for all funeral directors that are members – this would be the maximum the insurer would pay for all the accumulated claims in a policy year, including associated legal costs. This limit could very easily be exhausted before the 12 months are up.
That’s why we worked with the NAFD to ensure that the membership policy has a £5m limit for any funeral director. Therefore, £5m is the maximum the insurer will pay for each claim in a policy year, with each claim’s legal costs paid as well, and to the same level of cover. In addition, there is no limit to the number of claims you can make.
What level of PI insurance do I need?
There are numerous benefits attached to being an NAFD member. As an NAFD member you will have access to the most comprehensive benefits package within the funeral sector but, most importantly, your membership will add a real return for investment for you and your firm. For more information on NAFD memberships please visit their website: https://nafd.org.uk/why-join-the-nafd/
Professional Indemnity policies can also be bought separately by non-NAFD members to protect yourself against potential claims for injury or loss resulting from your actions, advice or failure to carry your professional duties. If you’re not an NAFD member, ensuring that the level of cover you have caters or the size of your business, your turnover, how many employees you have, and any previous claims is key.
About SEIB
At SEIB Insurance Brokers, we have been working with funeral directors and associated trades for more than 40 years. We have an in-depth understanding of the risks faced by the funeral industry and our experienced teams can provide flexible policies to meet your individual needs, as well as answering any insurance queries you may have.
For more information on Professional Indemnity or funeral director insurance, please get in touch with our team by calling 0345 450 0648.
