Structured Engineers Professional Liability Programme
Professional services shall mean the following activities:
(a) Design or specification, including advice, oversight and supervision in respect of design;
(b) Drafting, drawings and technical documentation;
(c) Technical calculation;
(d) Measurement, testing and /or certification of materials;
(e) Project or construction management where the insured is specifically renumerated by way of a fee for service in respect of the overall control and supervision of a contract;
(f) Feasibility studies;
(g) Programming and time flow management; and training in respect of (a) – (g) above.
No matter how thoroughly your company prepares and executes each project, a significant element of risk is always present in your work as a professional.
When you least expect it, you may find yourself at the center of disruptive and expensive claims involving negligence or any act or error leading to a breach of duty. Litigation is expensive and damage awards if you lose, can be ruinos.
Professional Indemnity Insurance is a product specially designed to protect you and your company from liability risks associated with the provisions of your scope of services.
Provides financial protection that will cover legal fees and damages that you and your company may become legally liable to pay for breach of duty.
Professional Indemnity insurance is a ‘claims made’ policy.
This means that is a requirement of the policy that and any fact, situation or circumstance (including unknown acts retroactively that may surface during the policy period) that may result in a claim, be notified to the insurer within the period of insurance.
Any prior knowledge of the fact, situation or circumstance before the period of insurance will not be covered.
To provide the insurer with information to adequately understand your business in order to assess coverage. All declaration in the proposal form, form part of the policy contract.
Retroactive date is the date after which acts, errors or omissions of the insured are covered.
Any act, error or omission arising from professional services provided prior to the retroactive date will not be covered under the policy. For example, the PII with a term written from 15th January 2016 to the 15 January 2017, and a retroactive date set at inception (15 January 2013), would bar coverage for claims resulting from wrongful acts that took place prior to January 15, 2013, even if the claim was made against the insured during the policy period.
The sum insured of the PII limit applies to the aggregate of all claims against the policy in the policy period.
The automatic reinstatement allows this aggregate limit to be increased, while the limit for any one claim remains the limit of the sum insured.
For example, a policy with RM1,000,000 Sum Insured with ONE automatic resentment allows the insured to have 2 claims for RM1,000,000 each during the policy period but not one claim for RM2,000,000.
The test of what is a ‘claim circumstance’ and whether it ought to be notified is an objective one. That is, would a reasonable person in the position of the insured have realized that the circumstances may give rise to a claim?
When in doubt, notify the insurer especially if the incident in question give you cause to be concerned that a claim may arise. In circumstances where you are aware of the incident, notify the insurer as soon as possible during the policy and don’t wait and see if a formal complaint is made.
These two terms are sometimes confused.
Territorial limit refers to the place where the act, error or omission occurs. Jurisdiction limit refers to the fact that the policy will only cover claims brought within the court system of the nominated countries.
- Negligence arising from a Breach of Professional Duty due to an act, error or omission
- Fraud and Dishonesty of staff
- Libel, Slander or Defamation against a third party
- Loss of client documentation
- Legal liability for damages and claimants’ costs/expenses arising from the act, error or omission/civil liability of the “Company’s” employees
- Wrongful or inadequate advice to client(s)
- Acting without proper instructions from the client
- Failure to act in accordance with client’s instructions or at all.
- Failure to advise client
For a claim to materialise there must be a demand by a Third Party for compensation due to Insured’s alleged negligent act, error or omission in the performance of their Professional Service
It means that if someone who was insured with an insurer in unbroken successive periods notifies the insurer of a claim or circumstance in a subsequent period which should have been notified in an earlier period, then that claim will be covered under the latter policy, but subject to the smaller sum insured of the two applicable policies.
‘Non-disclosure’ issues and ‘known circumstances’ exclusions will not be raised. However, prejudice due to delayed notification may be considered in the adjustment of the claim.
Run Off Coverage applies where a company ceases to trade, sells its assets or merges with another entity. The policy provides coverage specifically for any acts occurring prior to the date on which the company/entity ceased trading, sold its assets or merged. It is common also where individual directors of companies or partners of professional firms have retired or relinquished their positions.
This occurs where liability is imposed on one person for the wrongful acts of another. An example of this is an employee of a company providing negligent advice on its behalf. The legal basis being that a “principal” is liable for the acts of its “agents”.
Defamation is the umbrella term used for libel and slander – the publication or vocalisation of information, opinions or thoughts that can be damaging to the reputation of an individual or business. If something offensive is spoken, then it’s described as slander. If it’s written down, broadcast, or shown in a film, it’s described as libel. For a comment to be considered defamatory, it must be communicated to somebody else, even if that’s just one person.