Page 7 - Life Insurance Today February 2018

1. Doctors and medical practitioners - It covers registered indemnifies the insured against financial loss resulting
medical practitioners like physicians, surgeons, from a claim brought about due to an error or omission
cardiologists, pathologists etc. committed while performing a service contracted for. One
2. Medical establishments - It covers legal liability falling condition, however, being that the loss must be to a third
party who has suffered bodily injury or property damage.
on the medical establishment such as hospitals and
nursing homes, as a result of error or omission
committed by any named professional or qualified The policy indemnifies against compensation claims arising
out of breach of duty by a negligent act, error or omission
assistants engaged by the medical establishment.
while discharging professional duty. The defence costs can
3. Engineers, architects and interior decorators.
also be covered. Professionals like architects, engineers,
4. Lawyers, advocates, solicitors and counsels. doctors, lawyers, chartered accountants, and medical
5. Chartered accountants, financial accountants, practitioners, and services such as medical establishments
management consultants. need to protect their business interests against legal claims
for error, omissions, professional neglect for both the
Professional Indemnity insurance is also available for other principles and their employees.
professionals - Designers, planners, small businesses, event
liability etc. In case policyholders do not find standard The Professional Indemnity Insurance Policy
policy suitable for his requirement - he can always comprehensively covers them for all legally established
approach an insurance company as a group for customising claims arising from the covered perils like:
a cover for him. An indemnity cover is meant for Y Legal liability due to bodily injury or death caused by
professionals to cover liability falling on them as a result breach of professional duty by the insured
of errors and omissions committed by them whilst Y The predecessors in business of the said firm, if
rendering professional services. covered
Y Any person at any time employed by the Insured or
However, these are mostly availed by doctors, engineers, by such predecessors in business in the conduct, by
lawyers and chartered accountants. For the persons who
or on behalf of the said firm or such predecessors of
provide advice, designs or a service to their clients, they any business conducted in their professional capacity
should give serious consideration to professional
Y Payment of defence costs, fees and expenses in
indemnity insurance. While most firms enjoy good
relationships with their clients, a mistake in a project can accordance with Indian Law
change working dynamics overnight. The chances are that
if a client suffers a significant financial loss as a result of
their negligence, they are likely to seek recompense.

Professions that may need PI cover include consultants, IT
professionals, teachers and private tutors, recruitment
professionals, designers, fitness professionals and dance
teachers. Liabilities may arise in the discharge of
professional duties due to negligence. This indemnifies the
policyholder against loss/circumstances incurred only as a
result of their negligent act, error or omission in carrying
out the policyholders business. This is the narrowest form
of cover.

What is covered under the Pi policy?
Broadly speaking, professional indemnity insurance

“The reasonable man adapts himself to the world; the unreasonable one persists in trying to adapt the world to himself. Therefore, all
progress depends on the unreasonable man.”

Life Insurance Today February 2018 7

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