Who needs professional indemnity insurance?

Are you are professional adviser or give service as a lawyer, architect, medical doctor, dentist, etc , then you need Professional Indemnity Insurance cover. In Nigeria the National Health Insurance Scheme – (NHIS  of 1999) requires every healthcare professional  have insurance that will protect their patients in case of accidents or fatalities (death) resulting from professional negligence.

This type of insurance provides compensation to patients and their relatives in the event of
involuntary murder, disability, shock and injury suffered by patients as a result of the negligence of health care providers. The penalty for non-compliance with this law is a possible revocation of licence by the National Health Insurance Council, a record of conviction, and sealing-off of the premises.

What is professional indemnity insurance?

Professional Indemnity Insurance protects you from claims if your client holds you responsible for errors, or the failure of your work to perform as promised in your contract.

Who is a professional?

Anyone who gives to another person advice and/or services of a skilful character according to an established discipline might be regarded as a ‘Professional’. That means persons other than those in ‘traditional’ Professions, such as doctors and lawyers, Engineers, Surveyors , Insurance Brokers , Accountants  are now considered to be Professionals i.e. Computer consultants, advertising agents, and fund managers.

Why does a professional need a professional indemnity policy?

A Professional will hold himself or herself out as having a special skill, which can be relied upon by another. Consequently, the law requires that the professional exercise the required skill to an appropriate level expected by that profession.

Professionals are only human and mistakes do happen. Any financial loss, injury or damage arising from a mistake or failure by the professional to exercise the required level of skill may mean that an award is made in favour of a person who suffers a loss, damage or injury. A Professional may also be held to be liable for a mistake even though there was no negligence.

What protection will a professional indemnity policy provide?

A Professional Indemnity insurance policy aims to shield the professional’s assets in the event of a claim therefore ensuring that he/she is able to carry on their business

What is the date of inception?

The Inception date is the date of the start of the Policy Period.

When does a wrongful act take place?

Few professional liability insurance policies provide a definition for arriving at the exact time at which a wrongful act takes place. However, according to custom and practice, the wrongful act is generally considered to have taken place when the professional service that ultimately causes the loss or damage is actually performed or should have been performed, but was not.

Source: Punch