Professional Indemnity Insurance in Malaysia
Professional Indemnity Insurance
A professional indemnity insurance is to protect the insured against claims for damages resulting from negligence or lack of care in their work. This work would be provided in terms of services and solutions as provided by the professional, their partners or their employees.
The claims could be from:
- Third party people or groups
Professional Services Covered by Indemnity Insurance
Depending on the insurer, this Insurance can cover for claims for injuries and property damages from the following professions and firms:
- Lawyers
- Accountants
- Architects
- Doctors
- Property Managers
- Estate Agents
- Engineers
- Other professionals as accepted by the Insurer
Professional Services in Malaysia
There are professionals that offer professional services. In Malaysia, this is usually regulated by professional bodies. These professional bodies or associations ensure their members are qualified and trained to carry out the work.
If the insured is not a member of the authorized professional body, then it may be hard to bring claims of professional malpractice or negligence against that person. This will depend on the legal coverage of that profession and its requirements in Malaysia.
Professional businesses in Malaysia are usually called partnerships, firms or agencies. And it depends on the insurance company to offer professional indemnity for a particular profession or firm.
Professional Liability Damages Covered
This insurance plan covers third party claims for damages that resulted from the insured’s work as follows:
- Breach of Professional Duty as specified by the professional body and the law
- Negligence
- Malpractices
- Mistakes and Errors
- Work not Done or Omissions
The above is a not a complete list. This will depend on the insurance companies on what use cases they are willing to cover in their policies.
Professional Liability Coverage
The insurer pays for these claims and legal costs, if the legal findings confirm the insured is liable.
The amounts covered or paid when a claim is made against you, will be dependent on the sum insured in the insurance policy. You have to factor in legal costs of the victim and your own, when buying this insurance.
Comparison of Coverage by Professional Indemnity Insurance and Public Liability Insurance
| Damages Caused By | Professional Indemnity Coverage | Public Liability Coverage | |
| Professional Negligence | Covered | Not Covered | |
| Professional Malpractise | Covered | Not Covered | |
| Business Operations | Not Covered | Covered | |
| Business Premises | Not Covered | Covered |
Professional Liability Insurance Coverage and Premium Calculation
This insurance policy is designed to protect the insured from damages and claims of negligence or malpractice work as a professional. This policy protects the insured from claims made by third parties on damages and suffering that came about because of the insured’s lack of professional work practices.
The price or premiums for the this insurance is calculated based on the following factors:
1. The qualifications of the professionals and workforce of the firm
2. The experience of the firm’s workforce
3. The type and nature of the firm’s activities
4. The revenues of the firm over the past years
5. The type of contracts entered and the liability details of those contracts
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