Seminar calls for awareness on ‘indemnity insurance’

Professional indemnity insurance is fast becoming compulsory globally and awareness has to be created in Qatar about coverage need for damages on claims against negligence by professionals, a workshop hosted by Doha Insurance was told at the weekend.Professional indemnity insurance (PII) is a form of liability insurance that helps protect professional advice and service-providing individuals and companies from bearing the full cost of defending a negligence claim made by a client, and damages awarded in such a civil lawsuit. Professional indemnity insurance is required by law in some countries for certain kinds of professional practice (especially medical and legal), and is also sometimes required under contract by other businesses that are the beneficiaries of the advice or service.The primary reason for professional indemnity coverage is that a typical general liability insurance policy will only respond to a ‘bodily injury, property damage, personal injury or advertising injury claim.’ But various professional services and products can give rise to legal claims without causing any of the specific types of harm covered by such policies. Common claims that professional indemnity insurance covers are negligence, misrepresentation, violation of good faith and fair dealing, and inaccurate advice. The workshop was organised at the La Cigale by Doha Insurance and led by experts from the Germany-based SCOR, a global reinsurance company.Doha Insurance assistant general manager (Technical) Mahmoud al-Nasir was the moderator.Speaking to Gulf Times on the sidelines of the workshop, Doha Insurance general manager Bassam Hussein said it was important that insurers and brokers sat together with the contractors and determined the right professional indemnity coverage.“I don’t believe there is a right or wrong limit for professional indemnity coverage. No matter how big a limit you have, you could still have a claim, which is high for whatever reason. The onus is on the insurance company and brokers, who advise the clients, to sit with them and find their needs and try to come up with the right figure.“The major issue or challenge we face is that some of the clients refuse to buy more than what is asked or required from them for budgetary purposes. If they have a limit, of say QR5mn, and then there is suddenly a much bigger claim awarded by the courts, it is going back to them and suddenly they (the company) will be in deep financial trouble. Already, they may have cut corners to come up with the right price for the contract.” “It is a very valid issue,” Bassam said.“We are now talking to the Qatar Chamber of Commerce and Industry about doing a seminar on professional indemnity to create more awareness on the issue among our contractors. QCCI chairman Sheikh Khalifa bin Jassim al-Thani has supported the idea,” Bassam said.Asked why some ‘professionals’ such as construction engineers are exempted from PI coverage, the Doha Insurance general manager said, “They are not covered under professional indemnity coverage because they cannot challenge the drawings or change quantity specified at the design stage. They have to put in the same quantity as stipulated. It is the designers’ duty to ensure their design is correct and then only can it be passed on to the construction engineers.” SCOR senior underwriter Michael Frohlingsdorf and senior claims manager Hans-Ulrich Finck led the workshop.