Professional Indemnity Insurance

COVER SUMMARY

This class of insurance protects a professional firm or individual against legal liability towards third parties for injury, loss or damage arising from a professional negligence or that of their employees. The policy does not indemnify for fraud or dishonest act of the Insured or his employees.

Occurrence Basis

The names of individuals to be guaranteed would be specified in the schedule and the amount of guarantee fixed against such names. The main drawbacks on this method is that the policy schedule would be updated regularly whenever an employee leaves or joins the company as the case may be and if the update was omitted, it may result to irrecoverable losses.

Claims Made Basis

This class of insurance protects a professional firm or individual against legal liability towards third parties for injury, loss or damage arising from a professional negligence or that of their employees. The policy does not indemnify for fraud or dishonest act of the insured or his employees.

On ‘Claims Made Basis’ policy, coverage is the date a claim is made against the insured. The following conditions must be present:

  • The policy must be in place at the time a claim is made.
  • ‘Retroactive’, date on the policy must be as far back as when the services giving rise to the claim were provided.
  • Notice must be given to the insurer within the policy period or during a grace period that might be thirty or sixty days after termination of coverage.

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