What the policy protects
What professional liability insurance is. Who needs a professional liability contract. Free consultation and arrangement of insurance policies.
Voluntary professional liability insurance contract.
The terms of professional liability insurance are in many respects similar to those of compulsory civil liability insurance, yet unfortunately few people know the differences between the two types.
What is professional liability? It is a type of civil liability to third parties of various categories of persons (including legal entities) who, through negligence or lack of experience in the course of their professional activity, may cause damage to the health or property of legal entities and individuals.
Civil legislation establishes liability for harm caused to another person. This harm must be compensated in full. Given that entrepreneurship today is also carried on by quite small enterprises, employing people of various professions, at times highly complex ones, the question of guarantees of compensation for harm caused to clients as a result of a professional error becomes especially acute.
Professions commonly concluding a voluntary professional liability contract:
- audit activity;
- private notaries;
- carriers;
- security agencies;
- valuation activity;
- medical practice;
- cosmetology;
- construction companies.
In some cases, professional liability insurance is in effect required indirectly, namely where copyright objects and related-rights objects, trademarks, service marks and appellations of origin of goods are entered in the customs register of intellectual property objects.
This type of insurance is requested by the Ministry of Justice of the Republic of Kazakhstan, and the sum insured may not be less than 1,000 times the monthly calculation index set for the relevant financial year by the law on the republican budget.
An insured event is an event resulting from negligence, error or omission in the Policyholder's professional activity, as a result of which harm was caused to the life or health of, and/or physical damage to the property of, the Injured party, and as a result of which a claim for compensation of the harm has been made against the Policyholder.
An insurance payment under a professional liability insurance contract is made when the Policyholder's civil liability arises to compensate harm to the life or health of, and/or damage to the property of, third parties caused in the course of the professional activity provided for by the Charter (Regulations, licence).
The term of the professional activity contract is 1 year.
Even the most experienced, qualified and competent specialist can make an unintentional mistake, the price of which is material damage, a client's health and even life. The reputation of the specific specialist or of the institution as a whole may also suffer. As a reliable and civilized mechanism for compensating damage, this insurance product gives clients additional guarantees, and gives the policyholder a tangible advantage and confidence in the stability of their professional activity.
For questions about professional liability insurance, contact our managers.
How to choose the terms
- describe all of your professional services;
- estimate the maximum size of a client claim;
- agree the territory and the retroactive date;
- check whether legal costs are covered;
- study the exclusions and the deductible;
- clarify the document management requirements.
What to do when a claim is made
Notify the insurer after receiving a claim or discovering a circumstance that could lead to a loss. Keep the contract with the client, the terms of reference, reports, acceptance certificates, correspondence and a calculation of the estimated damage.
This material is provided for information purposes. Cover is determined by the contract and the rules of the insurer.