6 Facts What Professional Liability Insurance Covers in India

0
129
professional-libility-insurance

This type of insurance covers professionals such as accountants, lawyers, and physicians against claims made against them due to negligence and other reasons. 

Experts in a particular field need this professional liability insurance coverage because general liability insurance policies do not cover malpractice, negligence, or misrepresentation claims resulting from business or professional practices.

A good number of professional organizations like law firms, hospitals, BPOs, etc., purchase such insurance policies. They find that it’s one of the best securities they have against lawsuits irate customers – in addition to a good lawyer. Depending on the insurance company, the scope of the coverage may vary.

Coverage scope exclusions based on the nature of the profession   

On average professional liability insurance coverage works for professionals such as financial Accountants, management consultants, legal professionals, engineers, medical practitioners, and interior decorators working on ICU expansion are covered by this insurance policy.     

Professional Liability Insurance Policies Have the Following Features and Benefits:

Cover

A third party is legally liable if a professional makes errors, omissions, or commits negligence while rendering a service, injuring a third party, or causing damage to a third party’s property.

Group Policies

Professional indemnity insurance is also available as a group policy. In this circumstance, the providers might only extend the coverage to members of one profession. The number of members added to a group policy also entitles you to a discount on premiums.

Defence Expenses

In addition, this policy covers expenses related to defence. Upon the insured’s defence in court, the insurance company pays all the fees and charges. India is the only country where this professional liability insurance coverage applies.

Exclusion

Generally, civil liability claims are the only ones covered under professional liability policies. It is not covered by the policy when the claim relates to a criminal act or violation of the law. 

The best example of liability insurance 

Professional liability insurance coverage includes, for example, medical malpractice insurance. It is not insignificant that medical professionals face lawsuits for alleged malpractice – an act or omission that results in injury or death to a patient if the treatment provided falls below the standard of care. Medical malpractice insurance covers providers against the cost of such lawsuits, even though most medical malpractice cases are treated as civil torts in India. 

Exclusions from Professional Liability Insurance

Only those types of legal liability listed in the policy are covered, not criminal prosecution or all forms of civil liability. Core policies might not include cyber liability coverage, which deals with data breaches and other technology issues. In addition, there are separate policies that cover data security and other issues related to technology security.

Coverage exclusions based on policy terms and conditions 

Some policies are more restrictive than others when it comes to professional liability. The wording of many policies is such that it satisfies a minimum approved wording, which makes comparisons simpler, but other policies vary dramatically in coverage they offer. Breach of duty, for example, can be deemed committed when the policyholder reported the incident to the insurer during the policy period.

It can be confusing for non-lawyers to understand terms with significant legal differences. For example, a policyholder purchases negligence coverage for loss/circumstances resulting from any professional error or omission.

It is also possible for the term “negligent” to apply to all three categories, although any non-legal reader may assume as much). Conversely, an “accidental, negligent, or omission” clause is significantly more restrictive and denies coverage in the event of an accident.