Page 12 - Life Insurance Today February 2018

impact of a potential loss, one can insure any body part. negotiated in accordance with the coverage afforded by
Despite a clear need, covers for celebrities, models, sports the policy. In fact, in today's world, any professional - be
persons and artistes have not taken off in India. Such that a doctor, lawyer, CA or architect - or professional
insurance covers are offered selectively and the sum bodies such as medical establishments, BPOs, law firms,
insured depends on annual revenue popularity, age, etc. IT companies or financial institutions, who render skilful
If the sum to be insured is high, insurance companies often advice and services to people, can be sued for negligence,
seek reinsurance. Right now professionals like sportsmen errors and omissions on their part, the cost of which, in
can buy a personal accident or a critical illness policy for some cases, can be exorbitant.
loss of income due to an unforeseen event.
The one saving grace is that the extent of damage can be
But in professional indemnity, the claim amount is reduced if someone has already opted for professional
unknown. So, insurers set a limit to liability, that is, the indemnity insurance, and any loss or damage caused to the
extent to which they will bear the loss, the balance will victim is not the result of any deliberate act or wilful
have to be borne by the professional. The policy pay the neglect. Some professions entail a risk which can lead to
sum assured that has been set as a limit as the extent of a big liability if something goes wrong. This is where a
damage cannot be quantified. The expense over and professional indemnity cover can help.
above the sum assured has to be borne by the doctor.
Bibliography:
Usually, there is no fixed limit on the indemnity. The cover 1. FICCI report -2015
that one takes depends on factors such as risk, probability 2. http://www.tflguide.com/2016/07/professional-
of occurrence of events that can make one liable. Here the indemnity-insurance-doctors
sum insured is referred to as Limit of Indemnity. This limit 3. https://securenow.in/blog/how-a-professional-
is fixed per accident and per policy period i.e. AOA & AOY indemnity-insurance-is-boon
respectively. Professional Indemnity/ Errors and Omissions 4. https://www.fincash.com/b/insurance/indemnity-
Insurance cover provides protection for the company and insurance
its subsidiaries for claims brought in respect of negligent 5. http://www.advisoryhq.com/articles/overview-of-10-
acts, errors or omissions in the performance of professional-liability-insurance
professional services. 6. http://economictimes.indiatimes.com/wealth/insure/
cover-your-professional-risks
The policy is meant to pay for defence expenses and 7. http://www.business-standard.com/article/pf/cover-for-
damages and includes amounts that the insured is legally professional-mistakes
required to pay because of judgments, arbitration awards 8. IRDAI Annual Report 2015-16
or the like rendered against the insured, or for settlements 9. Newspapers & Journals

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12 February 2018 Life Insurance Today

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