Even the most highly qualified professional can make in their work a professional mistake, for which the answer to the third parties, health, life or property were damaged, have the organization where the person works. Due to the large number of paid services and the increased level of literacy in legal matters has been a recent increase in the number of complaints and claims from customers who were affected by the poor quality of work performed and services rendered.Therefore, more and more popular today acquires professional liability insurance for lawyers and auditors, builders, accountants, physicians and other medical professionals. It helps the management of companies and business entities to avoid significant financial losses in the event of the need to compensate the damage caused to victims, as well as unplanned expenses and loss of time to participate in the proceedings. In addition, these processes will no doubt have a negative impact on the image of the organization, which, in turn, will lead to an outflow of clients and customers and reduce profits.
Professional liability insurance is a wonderful outlet for management companies of the situations described above, for all the risks associated with the losses in the event of damage to third parties in any form takes on the insurance company. Some leaders are in no hurry to issue policies of professional liability insurance in the mistaken belief that such a step can be interpreted as irresponsible company in relation to the performance of their direct professional duties. But they are wrong, because the conclusion of such an agreement only shows integrity management company in relation to its customers and business partners, seeking to take account of their interests.
Fulfillment of such obligations can sometimes be difficult to get the organization's financial position, therefore the purpose of liability insurance is to protect the insured against possible losses.
Liability insurance to protect their property interests related to this obligation and means that the insurance company reimburses the damage unintentionally caused insured employees to third parties.
With liability insurance, the insurance company will not only compensate damages to offset legal fees and other costs to settle the claims, but in the cases provided for in the insurance contract, will settle claims of third parties directly without the involvement of the insured.
In addition, in recent years, liability insurance has become essential part of any organization that cares about its prestige. This question is particularly relevant for large firms and companies that deal with foreign partners or investors. For them, the availability of liability insurance policy - one of the main criteria for the reliability of the Russian company. Currently considering draft laws obliging insure liability companies operating hazardous production facilities. Soon it will become a mandatory practice.
Services provided by insurance companies is quite diverse and can insure almost any responsibility of the company in any industry.
As mentioned, professional liability insurance is based on the unfortunate use of the professional knowledge and skills of a good faith, reasonable and competent approach to his duties. Dishonesty and fraud against insurance coverage are not covered.
The law, the principle of "who made anything by others, made it myself." Therefore, the company is responsible for omissions employees, provided, however, that this negligence allowed in the course of their work.
After the end of the policy the insurance company, usually indicates a period of several months for the submission of claims for negligence, the results of which were discovered after the termination of the policy.
Liability of the insurer under the policy of professional liability insurance is usually limited to a certain limit. This limit is cumulative for the duration of the policy and the amount paid on the claim shall be deducted from the limit.
Most policies of professional liability insurance, along with compensation claims for damages the plaintiffs are reimbursed costs and expenses of the company related to the prevention or damages. However, if the amount payable by the loss exceeds the aggregate limit of liability of the insurer, the above costs and expenses shall be reimbursed in such proportion as the amount of the loss is the sum of the aggregate limit.
Professional liability insurance is a specialized insurance, so the amount of liability of the insurer usually excluded risks with more reason should be attributed to general liability.
Policy covers the risks of omissions and errors in the condition of the professional person full of integrity and proper care. What would be the cause was not related in a loss, they should not be intentional.
However, the risk, such as libel, defamatory enterprise, can be included in the policy for an additional premium, and dishonest employees of the insured may be covered with a special type of insurance called insurance against losses that may arise as a result of dishonest employees (fraud, deceit , criminal offenses).
Professional liability insurance is usually set a franchise. It aims on the one hand - to raise the attention of the insured to his duties, and on the other - to release the insurer from having to consider the relatively small losses.
As the costs of establishing the loss covered by insurance, are relatively high because of the need in many cases to involve experts in a particular field of professional activity, it also applies a deductible.
Conditions of professional liability insurance is largely similar to those of general liability insurance and product liability:
1. The insured must notify the insurer as soon as it becomes aware of a claim or loss or any event which may give rise to liability of the policy. This notice must contain all of the details of what happened. Any written statement of claim or summons, upon them, should also be sent to the insurer. Not allowed to make or give any promises to pay losses or other payments or by the insured, or on its behalf, without the written consent of the insurer.
The insurer has the right to take over the management on behalf of the insured the protection of its interests and to pay any loss or conduct trials.
2. Policyholder must provide the necessary assistance to the insurer, but the insurer can not be entrusted to challenge court decisions, if the trusted authorities will not allow the conclusion that the decision can be challenged in the hope of success.
3. In connection with a claim against the insured, the insurer may at any time limit of liability to pay the amount (net of the amounts paid as compensation for the loss in the period of the policy), or any lesser amount that must be paid to the elimination of such claims, and then the insurance company will not be further liability insurer for further possible claims to it, except for the expenses incurred by him before the insurer has made this payment.
4. If the loss of the policy obtained by fraud or by malicious intent on the part of the insured or a person acting on its behalf, all obtained in this way amounts are recoverable.
5. If at the time the claims arising out of the policy, the insurer is able to get a refund on the other or others of the policy, the leading underwriter of professional liability insurance pays compensation only to the extent the excess of the amounts received by the other or other policies.
6. If the premium under the policy is based on the design data of the insured, it must keep appropriate records of such data and to present them to the insurer at its request for approval.
7. The insurance company may cancel a policy by sending seven days policyholder notice. In this case, the insured is entitled to a proportionate return of premium.
8. Correct filling of the conditions of the policy needs to be validated and insured along with the data contained in the request of the insured, they are the basis for liability insurance and the payment of compensation.
As an additional condition in the professional liability insurance policy, or to imprisonment for a separate insurance policy can be taken the risk of the request to a professional person for libel and actions defamatory.
These include: the misinformation, not related to a breach of contract, but gives the right to sue, false information, defamatory of the plaintiff, made public by publishing, drawing, sculpture, notices on radio, television and the like, and verbally assault, corruption name of goods, violation of the right to the trademark, a registered design, copyright infringement and patent rights as a result of the information contained in the publications. The exception is slander, wearing a criminal nature.
Insurance policies of libel and insult provides compensation insurer losses incurred in connection with the responsibility under the law for the damage caused to the plaintiff, and for the cost of the last associated with the presentation of the claim to the insurer during the term of the policy.
Additionally insurers reimburse the insured costs necessary to revoke or modify certain publications on the insurer's request or by court order.
Policyholder must keep its responsibility to a certain percentage of each loss (unconditional deducted franchise), but not less than 10%.
Liability insurer the insurance claim is limited by the period of the policy, but the expenses incurred with the consent of the insurer, shall be payable in addition.
When taking risks for insurance taken into account:
The character of the applicant;
-Reputation of the applicant in the business world;
And statistical data on losses in previous years.
Application for professional liability insurance does not have any legal form, however, require insurers usually detailed information on a wide range of issues:
Name and address of the insured;
-Full name of the profession because of the independent insurance terms and premium rates;
-Start date of occupation. It is understood that the company with extensive experience better for the insurer than the newly formed;
Addresses of branches and offices, through which the professional activity. If there are any, they are staffed with experienced leaders, as monitored;
Data on directors and managers, their qualifications, work experience, age. The question of professional qualifications is very important to address the issue of providing insurance coverage. The insurer must be sure that the insurer is competent enough to carry out professional activities. Therefore, the application must indicate besides the age of directors and executives, the date of receipt of the documents of the qualifications, professional career as managers and other evidence about their experiences on this study;
Is the total number of employees to a certain extent, affect the potential for occurrence of the insured event, and therefore the size of the premium rates;
-Have previously insured professional liability insurance coverage. Since the policy usually provides retrospective coverage for the insurer to know how long the insurer engaged in professional work and how much time he had no insurance coverage. It may happen that during the term of the policy concluded there is a loss, which was the result of negligence, manifested in the past time. Then the insurer will pay for it.
The insurer would like to be sure that the policy is not specifically in order to cover the losses caused by the negligence of the past time;
-Refused if any of the insurers from entering into or renewal of insurance, if not canceled in advance of the policy or require an increase in the premium or renegotiation of insurance. The answer to these questions depends on the adoption of risk insurance;
Had left, whether insured or any of its predecessor employees, or whether there is meant to fire someone for negligent acts, errors or omissions, or for dishonesty, fraud, willful or criminal action. With such cases, the insurer may decide not to retrospective coverage.
-Has the claims were presented to the insurer or director, officer or employee in connection with errors and omissions (negligence) related to the profession. Are there any known cases of negligence, the insured or the circumstances that could lead to claims. Means the possibility of claims for known cases have not yet vested in the official form;
-Limit the insurer's liability is closely related to the size of awards. The higher the premium, the more can be installed above the liability limit. Or the higher limit of liability, the higher the premium;
-Whether to expand insurance coverage to include it risks such as libel and defamatory actions, breach of warranty authorities, loss of or damage to documents.
Establishing premium rates for professional liability insurance is a complicated business. The award usually depends on two main factors - the total number of employees and the established limit of liability.
The base rate premium is calculated based on the annual gross fee insured and the insurer's liability limit with the addition of a specified amount for each employee engaged in the production.
Premium rates may vary depending on the nature of the profession, and the insurers based on their own experience of passage of the insurance profession and assess the probability of occurrence of insured events.
For fixed rate premium charges are often made based on additional information on risk. These include:
-Multiple branches from the policyholder, when the risk increases significantly depending on the existing control system, a functional relationship between the individual units and the communication between them;
Results passing the case to the previous years, when unfavorable results may affect the increase in the base rate premium and the reduction of the limit of liability of the insurer;
, Age and experience of managers and employees. For youth and lack of experience is an additional premium;
-The ratio of managers and employees can influence the amount of premium rates, with a view to the provision of control and monitor the activities of employees.
To a certain degree of coverage and premium rate depends on the specific professional activities of the insured and the established requirements of their jurisdiction.
Engineers, designers may be responsible for periodically wrong advice, drafting the wrong plan, errors in specifications, designs, for negligence committed during the inspection work.
Designers usually become responsible for their personal failure or incompetence in compliance with established standards (standards) to guide them, and engineers.
