Professional Indemnity

Insurance & Business

Interruption Insurance
Prepared by Working Group 6
  Professional negligence

Scope of  Unintentional breach of copyright or

confidentiality
Professional  Loss of documents or data
Indemnity  Claim investigation costs

Insurance  Defamation and libel

(PI) cover Loss of goods or money



 Death or body Injury

 Legal costs and expenses
Professional Indemnity Limit

The sum insured is referred to as Limit of Indemnity.

Indemnity limit is fixed per accident and per policy period.
Indemnity limit is based on the ratio of :
• Limit of liability any one accident (AoA)
• Limit of liability in any one year (AoY)
Insurer options for AoA : AoY -
• 1:1
• 1:2
• 1:3
• 1:4
Any One Accident (AOA) limit is restricted to 25% of the Any One Year (AOY) limit.
Factors Affecting Premium Calculations

Business
Policy coverage
Dimensions

Retroactive
Credit score
period of policy

Claims history
Policy Excess/Deductibles
Applicable
2 types-

 Cost exclusive
 Cost inclusive
What Does Professional Indemnity Does Not Include

 Criminal act, penalties, fines, punitive damages

 Wilful or deliberate neglect
 Loss of goodwill
 Medical practice done under alcohol or narcotics influence
 Loss due to act of war/invasion
 Fraudulent claims
 Claims based upon loss due to unfair competition
 Losses arising due to bankruptcy
 Medical treatment
  Profit
Risks Covered Under  Fixed Cost
Business Interruption 

Temporary relocation
Commission and training cost
Insurance  Extra expenses
 Civil authority ingress/egress
 Employee wages
 Taxes
 Loan payments
Premium Calculation Under Business Interruption
Insurance
BI = T x Q x V

BI = business interruption

T = the number of time units (hours, days) operations are shut down
Q = the quantity of goods normally produced, or sold, per unit of time
used in T
V = the value of each unit of production, usually expressed in profit
Deductibles

Percentage
Waiting
or fixed
Period
deductibles
Exclusions Under The Business Interruption Insurance
● Riots or civil commotions, Risk of war
● Radioactive contamination/explosive nuclear assemblies.
● Pollution or contamination.
● Corrosion, Rust
● Changes in temperature, wind or rain damage to movable property.
● Risks related to motor vehicles, watercraft, aircraft, livestock or buildings in the process of
being built.
● Broken items resulting from a covered event or loss (such as glass)
● Flood or earthquake damage, which are covered by a separate policy
● Undocumented income that’s not listed on your business’ financial records
● Pandemics, viruses, or communicable diseases (such as COVID-19)