Professional Indemnity Insurance in India

Professional Indemnity Insurance Policy is meant for professionals to cover liability falling on them as a result of errors and omissions committed by them while rendering professional service. professional could  be a doctor, lawyer, CA or architect — or professional bodies such as medical establishments, BPOs, law firms, IT companies or financial institutions, who render skilful advice and services to people. The policy covers all sums which the insured professional becomes legally liable to pay as damages to third party in respect of any error and/or omission on his/her part committed while rendering professional service. Legal cost and expenses incurred in defence of the case, with the prior consent of the insurance company, are also payable, subject to the overall limit of indemnity selected. There is no fixed limit of indemnity and this would depend on the insured’s perception of risk and the area of operations. Any limit of indemnity can be taken. Generally an individual would buy liability limits in the range of Rs 2-5 crore, while for a company the limit would depend on the size of operations, geographical exposure, etc.

Currently, almost all general insurance companies offer this cover to professionals. Some insurers even have separate policies for doctors, CAs, engineers, lawyers, architects and stock brokers against unintentional errors and omissions that may cause damage, loss or hardship to their clients. The cover, in fact, is needed as the insured may not be able to bear the loss if a claim is brought against him/his company, as also to comply with contractual obligations and sometimes with statutory mandates.

Benefits of Professional Indemnity Insurance

  • It is designed for the requirement of different professionals and professional services
  • Exhaustive coverage against different risks
  • Provides for legal expenses and cost incurred with the prior consent of the insured
  • Hassle free documentation
  • Mid-term increase or decrease in the sum insured allowed

Who can take Professional Indemnity Insurance Policies?

  • Doctors and medical practitioners – which covers registered medical practitioners
  • Medical establishments
  • Engineers, architects and interior decorators
  • Lawyers, advocates, solicitors and counsels
  • Chartered accountants, financial accountants, management consultants

Premium of Professional Indemnity Policies Depends on the Following Factors:

  • Type of profession & Professional experience
  • Revenue
  • Limits opted by the insured
  • Jurisdiction/territory
  • Extension required
  • Claim experience

Professional Indemnity Insurance Excludes:

The policy does not cover any claim made against them in respect of:

  • Any criminal act or any act committed in violation of any law or ordinance
  • Services come under the influence of intoxicants or narcotics
  • Any third party public liability
  • Rising out of all personal injuries such as 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
  • Loss of pure financial nature such as 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.
  • War and nuclear perils