Indemnity Insurance for Professionals

These are unusual times for the global economy. The economic meltdown is characterized by the severe credit crunch,weak demand for goods and services, shrinking productive capacities in the real sector, unemployment of large percentage of the workforce, coupled with the phenomenal crash of capital markets worldwide, bear eloquent testimonies to the crises that engulfed the advanced, developing and the third world countries in varying proportions.

The poor health of corporate entities, attributed mainly to the infidelity of managers and captains of industries,is at the heart of the economic crises in all countries of the world.

In essence, the economies of countries are strong as the state of health of their corporate entities implying that where corporate entities are well governed, and managed properly,it will emanate into prosperity for the entire economy. One fact you should understand,is the culpability of managers of corporate entities and professionals who had business transactions with them like reporting accountings,estate surveyors and valuers ,external auditors, stockbrokers etc.

For emphasis, these professional play important role in the financial reporting process. Of course the financial statement of these organizations were impacted by the activities of these professionals in varying degrees.

The external auditor relies on the valuation of assets carried out by the estate surveyors and valuers to determine the exact worth of the asset to be accepted and reflected in the financial statements. Without further inquiries most investors relies on the the auditor's opinion to make their investment decisions,when things go wrong they tend to blame the auditor who is liable for the professional work of the estate surveyor and the valuer.

It is therefore apposite for the auditor, in this case to have an indemnity that will protect him,his business, his personal assets, his good will and the name of his profession that may be threatened by unforeseen litigation by aggrieved clients.

WHY DO PROFESSIONALS NEED INDEMNITY INSURANCE
The distinguishing quality of a professional is the possession is a special skills which can be relied upon by others.He/she hold his/herself out as an expert in that area.He/she is also expected to demonstrate the skills and the expertise at the level that is set by the profession. Professional are humans, isn't if? They can make mistakes or even fail to exercise the professional skills and judgment at the level expected by their customers. When negligence is not established, a professional can be sued for for mistakes that result in injury, loss or damage to the client. When this happen, the professional indemnity insurance will come to the rescue.

THE COVER
A typical professional indemnity insurance policy provides indemnity to the insured, his executors and assign/administrator in their professional capacity from any claims made against them for breach of contract during the currency of the policy. It is protection against any litigation that may arise from professional negligence and mistakes.

The cover of the policy therefore is the extent of the obligation imposed by the courts or through out-of court settlement of litigation.The coverage of the policy includes the provision for legal defense cost no matter how baseless the allegations may be.

THE REQUIRED DOCUMENTATION
To procure an indemnity insurance policy, a prospective policy holder would be required to state:

1. Limit of Indemnity.

2. His/Her profession.

The obligation may vary from profession to profession and the court will place premium on their perceived importance. While risky jobs are most likely to attract higher premium, they are encouraged to use the services of experienced insurance broker to obtain the best value at the least premium.

THE REQUIRED DOCUMENTS IN THE EVENT OF CLAIM
The following documents are required

1. Complete claim form

2. Statement of claim

3. Correspondence exchange between the claimant and the insured

4. Any relevant documents.