If you provide a professional service or give advice as a healthcare, medical officer, then you need Professional Indemnity Insurance cover. In Nigeria, the National Health Insurance Scheme (NHIS of 1999) requires every healthcare professional to 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 license 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.
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.
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 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.
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.
The Inception date is the date of the start of the Policy Period.
What is the retroactive date?
When the policy provided is written on a claims-made basis as it’s done with Professional Indemnity, prior acts become an important consideration. If an Insurer is not willing to provide coverage for previous, unknown events that may have occurred prior to the policy inception, the tool used to limit this exposure is the “retroactive date” limitation.
When the policy provided is written on a claims-made basis as it’s done with Professional Indemnity, prior acts become an important consideration. If an Insurer is not willing to provide coverage for previous, unknown events that may have occurred prior to the policy inception, the tool used to limit this exposure is the “retroactive date” limitation.
If a policy is written with an effective date of 1st January 2013 for a business that has been trading since the year 2010 without a retroactive date, the policy is activated for any incident that is reported during the policy period i.e. after the 1st January 2013, regardless of when the incident occurred. Adding a retro date to the policy is comparable to building a firewall. When the insurer adds a retroactive date to the policy that is the same as the inception date of the policy, the policy will respond only to claims that are reported during the policy period, if they occurred after the policy was written i.e. in the case above, only errors committed after the 1st January, 2013 would be covered.
A claims-made policy that does not have a retroactive date or an unlimited retroactive cover is better for the insured because there are no restrictions on when the wrongful act must have occurred. For coverage to apply, the claim must be made after the policy inception, regardless of when the incident occurred. Such a policy still does not cover incidents that are known at policy inception and could give rise to a claim in the future. These must be disclosed on the application and are not covered.
A contract without a retroactive date is advantageous to the insured from a coverage standpoint and as a result, the insured can expect to pay more for the coverage. Most professional liability contracts do include a retroactive date. When a client cannot obtain unlimited retroactive coverage, the retroactive date should be set as far back as possible.
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.
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.
Modestus Anaesoronye
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