Reviewed & updated Feb 2017No, not champagne and caviar; but why your share of a PI claim should be budgeted for in your “business as usual” accounts, or at least as soon as you become aware of a potential claim.There is a high probability that at some stage your practice will be faced with a PI claim and – regardless of the actual merits of the case - this will involve inevitable costs, including your initial contributions (the excess), and the loss of productive time because you are required to search out and re-document project information, and then respond to the ongoing case against you. The personal stress is also a “cost” item.It is far better that you make a budget provision so you are ready for a potential onslaught, than be sandbagged by ignoring the effects of a potential PI claim. If a claim does not eventuate in a given year, you could then ring your usual caviar supplier!But on the downside, there is also the (somewhat dire) potential that a successful claim may exceed your available cover.If you are required to make a payment to meet a claim, that payment will be accounted for in the financial year the payment is made. But if you fund that payment by borrowings, the ongoing costs can be accounted for in each of the financial years required to sustain that facility.Our files have plenty of spurious and unjustified claims made against members: that is just an unfortunate part of life. It is far better to notify a claim when you get a “whiff” of it, than it is to leave notification until matters have escalated. NZACS and the insurers can then act as seems appropriate, and yes, that may mean a cost (and/or some effort) from you. There is no shame in notifying a claim, and no “black mark” for doing so.