The policy is meant for professionals. It is a type of Liability Insurance policy that protects the Professionals who provide consultation and services. This policy is meant to cover liability arising as a result of errors and omissions committed by them whilst rendering professional services.
Scope of Cover
The policy covers all sums which the insured professional becomes legally liable to pay as damages to third party in respect of any error or omission committed whilst rendering professional service. Legal cost and expenses incurred in defense of the case, with the prior consent of the Insurer are also payable, subject to the overall limit of Indemnity selected.
'Professional Indemnity' policies are issued to the following group of professionals:- Doctors and medical practitioners – Covering registered medical practitioners like physicians, surgeons, cardiologists, pathologists etc.
Medical establishments – Covering medical establishment such as hospitals and nursing homes, as a result of error or omission committed by any professional or qualified assistants engaged by the medical establishment.
Engineers, architects and interior decorators.
Lawyers, advocates, solicitors and counsels.
Chartered accountants, financial accountants, management consultants
Professional Negligence Coverage.
Only civil liability claims are covered. Any liability arising out of any criminal act or act committed in violation of any law is not covered
Lawsuit & frivolous Law suit Protection, regardless of Actual Wrongdoing.
Employee Coverage: Policy can be extended to cover employees engaged in the business
Defense Costs i.e costs of defending a lawsuit which include hiring a lawyer, court fees, investigations etc. are covered.
The company has the option of arranging the defence of the case.
It is a “claims-made” policy, which means that Policy coverage must be active both at the time of the incident and the time of the lawsuit.
Policy has two different limits to Protect from Multiple claims i.e Aggregate limit (AOY): the total amount policy will cover during the Policy term (usually one year) &Occurrence limit(AOA): the amount policy will cover for each claim .
Coverage from a Retroactive Date. It is generally the date from which you have held uninterrupted professional Indemnity insurance cover. If the Policy is renewed continuously without any break since beginning it provides Coverage for all work you’ve done in the past. The maximum amount payable including defense cost will be the AOA limit selected.
The sum insured is the Limit of Indemnity selected. This limit is fixed per accident and per policy period which is called Any One Accident (AOA) limit and Any One Year (AOY) limit respectively. The AOA limit is the maximum amount payable for each accident, should be fixed taking into account the risk exposed and maximum liability that could occur. The options available for AOA & AOY limit are 1:1, 1:2, 1:3, and 1:4.
In the case of Professional Indemnity policy issued to engineers, architects, interior decorators, lawyers, advocates, solicitors, counsels, chartered accountants, financial accountants and management consultants, the Any One Accident (AOA) limit is restricted to 25% of the Any One Year (AOY) limit.
Premium chargeable depends on the:
Limits of Indemnity selected
Ratio of limits
Any criminal act or any act committed in violation of any law or ordinance
Services rendered while under the influence of intoxicants or narcotics
Any third party public liability
Any condition caused by or associated with AIDS
Rising out of all personal injuries such as libel, Slander, false arrest, wrongful eviction, wrongful detention, defamation, etc. and resultant mental injury, anguish or shock
Infringement of plans, copy-right, patent, trade name, trade mark, registered design
Assumed by the insured by agreement and which would not have attached in the absence of such agreement.
Deliberate, willful or intentional noncompliance of any statutory provision.
Non-compliance with technical standards commonly observed in professional practice, laid down by law, or regulated by official bodies
Loss of pure financial nature such as loss of goodwill or loss of market
Any dishonest, fraudulent criminal or malicious act or omission
Fines, penalties, punitive or exemplary damages.
Professional services rendered by the Insured prior to the Retroactive Date in the Schedule.
Injury to any person under the contract of employment or apprenticeship with the insured their contractor(s) and/or Sub-Contractor(s) when such injury arises out of the execution of such contract.
War and nuclear perils