professional indemnity insurance council of engineers january 22, 2014
TRANSCRIPT
PROFESSIONAL INDEMNITY INSURANCE
COUNCIL OF ENGINEERSJANUARY 22, 2014
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AGENDAAGENDAAGENDAAGENDA
INTRODUCTION Lockton Wattana Insurance Brokers (Thailand) Ltd.
RISKS MANAGEMENT
PROFESSIONAL INDEMNITY COVERAGE / DEFINITION / EXTENSION / EXCLUSION
STANDARD PREMIUM PRACTICE
MARKET
PROCESS OF BUYING POLICY
CLAIM EXAMPLES & PROCESS
INSURANCE PARTNERS
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Lockton Wattana Lockton Wattana Insurance Brokers Insurance Brokers (Thailand) Ltd.(Thailand) Ltd.• Established in 1984
• In 1986, entered into a joint venture with Citicorp Insurance Group and become part of management buyout by Nelson Hurst International Group in 1991
• In 1997, Price Forbes Group acquired Nelson Hurst, and renamed as Alexander Forbes Wattana Co., Ltd.
• End of 2006, buyout of International Operation by Lockton Group, we became Lockton Wattana Insurance Brokers (Thailand) Ltd.
• Ranking – Top ten of the world, top three in Thailand
• Over 140 offices in 44 countries.
• Office in Thailand – approximate. 230 staffs
• Outstanding Non-Life Insurance Broker for the year 2008, 2009, 2010, 2011 and 2012
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Insurance Services
- Property All Risks - Marine Cargo / Inland Transit
- Business Interruption - Personal Accident
- Public Liability - Health
- Motor - Travel
- Contractors’ All Risks - Directors’ & Officers’ Liability
- Fidelity Guarantee - Professional Indemnity/ Professional Liability
- Money - Trade Credit
Lockton Wattana Lockton Wattana Insurance Brokers Insurance Brokers (Thailand) Ltd.(Thailand) Ltd.
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Transferred Risk(Insurance)
Reduced Risk(Safety Measures)
Avoided Risk
Retained Risk
Level Of Risk
RISKS MANAGEMENTRISKS MANAGEMENT – MIX – MIX STRATEGYSTRATEGY
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To indemnify the insured against legal liability for any claim first made against them during the period of insurance.
Arising from Wrongful Act (i.e. negligent act or error & omission) in the conduct of the Professional Services practice
carried on by the insured.
Professional Indemnity Policy would provide cover for:- compensation, and/or damages awarded against
professional legal costs and other expenses associated with defending
legal actions (subject to consent of the insurer).
PROFESSIONAL INDEMNITY INSURANCE (PI)PROFESSIONAL INDEMNITY INSURANCE (PI)
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DEFINITIONSDEFINITIONS
Wrongful Act shall mean any error, misstatement, misleading
statement, act, omission, neglect or breach of duty committed,
attempted or allegedly committed or attempted, by an Insured
while performing or failing to perform Professional Services.
Professional Services shall mean services performed by an
Insured solely in its capacity as their Business Practice for or on
behalf of a customer of the Insured.
Business Practice shall mean the business conducted by the
Insured, as specified in the Schedule.
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Retroactive Date
1/1/2011
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1 1
Claim Made
16/11/2013
Claim first made on 1611201/ / 3, Wrongful act happen on 155201/ / 2
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1 220
1 3
Wrongful Act
15/5/2012
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1 4
1st Policy 2nd Policy 3rd Policy
CLAIM MADE BASISCLAIM MADE BASIS
Claims made basis shall apply only to wrongful acts which
happen, and for which claim is made against the Insured, while the
insurance is in force.
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Limit of policy, Up to client, Normally Limit ~ USD 1 M – USD 20 M
Deductible, ~ > USD 10,000
Premium, ~ > USD 7,000
PROFESSIONAL INDEMNITY INSURANCE (PI)PROFESSIONAL INDEMNITY INSURANCE (PI)
Policy schedule
1. Annual Policy- For all activities of the Insured and shall renew every year.
2. Single Project Policy- For Specific activity with period more than 1 year. Generally up
to 10 Years.
3. Excess Layer Placement - In case of Higher Limit, we could use Local Insurance as
Primary Layer and use International Reinsurer as Excess Layer
Type of Policies
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- Libel and Slander
- Project Management
- Outgoing Principals
- Loss of Documents
- Intellectual Property
- Joint Venture Liability
- Consultants, Subcontractors and Agents
- Run-off Cover Insured Entity or Subsidiary
POLICY EXTENSIONPOLICY EXTENSION
- Estates and Legal Representatives
- Acquired Entity or Subsidiary
- Fraud and Dishonesty (Optional)
- Increased Aggregate Limit of Indemnity (Optional)
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- Prior or Pending Claim
- Known Claim & Known Circumstance
- Fraud and Dishonesty
- Assumed Duty or Obligation
- Related or Associated Entities
- Fines and Penalties
- Punitive Damage
- Nuclear
STANDARD EXCLUSIONSTANDARD EXCLUSION- Supply of Goods
- War & Terrorism
- Absolute Asbestos
- Previous Business
- Bribe & Illegal Payment
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STANDARD PREMIUM STANDARD PREMIUM PRACTICEPRACTICE
Business TypeBusiness Type
Annual Report & Annual Report & Overall businessOverall business
Experience & Experience & QualificationQualification
ClaimClaimHistoryHistory
Limit of liabilityLimit of liability
DeductibleDeductible
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PROFESSIONAL INDEMNITY INSURANCE (PI)PROFESSIONAL INDEMNITY INSURANCE (PI)
QBEAIG ACE
Non Preferable Risk
* Geotechnical / Soil * Environment Engineering * Nuclear Engineering * Mining Engineering * Chemical Engineering * Aeronautical / Space Engineering * Marine / Naval Engineering * Offshore Platform Engineering
Limit of Capacity USD 20 M USD 5 M – 10 M USD 10 M
Single Project Period 7 Years > 10 Years 1.5 Years
LOCAL CAPACITY USD 5 M – USD 20 M
INTERNATIONAL CAPACITY USD 10 M – USD 30 M
Example Of Local Capacity
Market Capacity
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ClientClient
ApplicationApplication
InsurersInsurers
1. Insured complete Application Form submit to LOCKTON.
2. LOCKTON approach the markets for insurance terms.
3. LOCKTON return Quotations with suggestion to Insured.
4. Insured select the prefer one, then receive Policy from
LOCKTON while LOCKTON continue support for any claims that may occur.
PROCESS OF BUYING POLICYPROCESS OF BUYING POLICY
LOCKTOLOCKTONN
Policy
Insurer InsurerInsurer
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ROLE OF INSURANCE ROLE OF INSURANCE BROKERBROKER
To work for insurance related issues on your behalf
To assist you in buying insurance and not selling
To analyze and survey of your insurance needs and arrange the insurance which most suits to your
exposure.
Market with underwriters different appetites and capacities.
To clarify and discuss with you to choose the appropriate insurance program
To handle and manage the claim until the claim is finally settled
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CLAIM EXAMPLESCLAIM EXAMPLES
Royal Plaza Hotel at Nakhonratsima collapsed on 13th August 1993
137 people died
Renovated from 3 storeys building to 6 storeys due to boom business
CLAIM INVESTIGATION
1. What actually happened?
2. What went wrong?
3. Why did it go wrong?
4. Was the Insured or one of their employees responsible for what went wrong?
5. Is the loss covered by the policy?
6. Are the Insured’s business activities correctly described in the policy schedule?
7. Was the loss notified in accordance with the requirements of the policy?
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CLAIM EXAMPLESCLAIM EXAMPLES
Burapha University, Chonburi, 2nd Flooring collapsed on 15th August 2010
One dead and four got
injured
CLAIM INVESTIGATION
1. What actually happened?
2. What went wrong?
3. Why did it go wrong?
4. Was the Insured or one of their employees responsible for what went wrong?
5. Is the loss covered by the policy?
6. Are the Insured’s business activities correctly described in the policy schedule?
7. Was the loss notified in accordance with the requirements of the policy?
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CLAIM EXAMPLESCLAIM EXAMPLES
7 Storeys, 77 Rooms Apartment at Kukot, Lamlukka leaned in 2013
Had to demolish
CLAIM INVESTIGATION
1. What actually happened?
2. What went wrong?
3. Why did it go wrong?
4. Was the Insured or one of their employees responsible for what went wrong?
5. Is the loss covered by the policy?
6. Are the Insured’s business activities correctly described in the policy schedule?
7. Was the loss notified in accordance with the requirements of the policy?
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CLAIM EXAMPLESCLAIM EXAMPLES
6 Storeys Shopping Complex at Samutprakarn, Concrete Beam Cracked in 2013
Rectification Cost approx 6mb
CLAIM INVESTIGATION
1. What actually happened? Concrete Beam Cracked
2. What went wrong? Incorrect Design
3. Why did it go wrong? Loading calculation error
4. Was the Insured or one of their employees responsible for what went wrong? Yes
5. Is the loss covered by the policy? Yes
6. Are the Insured’s business activities correctly described in the policy schedule? Yes
7. Was the loss notified in accordance with the requirements of the policy? Yes
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INSURED
INSURANCE
CLAIMANT
Claim First Made
ClaimPay damages, Indemnity
Pay Defense
, Inve
stigatio
n
LOCKTON
Lockton report claim andassist Insured to get their Claim.
Consult
11 22
3344
CLAIM PROCESSCLAIM PROCESS
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STANDARD CLAIM STANDARD CLAIM PRACTICEPRACTICE
The Insured must give to LOCKTON a written notice of any Claim first made against the Insured - as soon as practicable
and during the Period of Insurance.
Relevant documents :
T he date in which the Insured/Company first became awar e of the matter, if other than the court summons.
N otice letters and/ or demand letter and/ or other written co rrespondence from the claimant etc. (if any).
Other additional documents, if required.
In case there is a circumstance which the Insured realize that it may lead to a claim in the future, it is required by the
Insurer to report such circumstance to reserve the right of claim. LOCKTON may also be able to advise you about
whether a situation is a circumstance that should be notified.
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INSURANCE PARTNERINSURANCE PARTNER
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LOCKTON WATTANA – PI LOCKTON WATTANA – PI TEAMTEAM Lockton Wattana Insurance Brokers (Thailand) Ltd. 35th Floor, United Centre Building, 323 Silom Road, Khet Bangrak, Bangkok 10500 Tel. 02-635-5000
• Underwriting:-Name Ext. Email
Khun Mingkwan Sirichaiyakul 6902 [email protected] Khun Viyada Engchuan 6901 [email protected] Khun Supattaga Kunjara Na Ayudhya [email protected]
• Claims Department:-Name Ext. Email
Khun Sakorn Sudsa-ard 6400 [email protected] Khun Pannapa Thepmahutsilp 6300 [email protected] Khun Tipprapai Lagum 6301 [email protected]
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THANK YOU THANK YOU Q & AQ & A