Presentation on theme: "PROFESSIONAL INDEMNITY INSURANCE COUNCIL OF ENGINEERS JANUARY 22, 2014."— Presentation transcript:
PROFESSIONAL INDEMNITY INSURANCE COUNCIL OF ENGINEERS JANUARY 22, 2014
1 AGENDAAGENDA 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
2 Lockton Wattana Insurance Brokers (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
5 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)
6 DEFINITIONS 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.
7 Retroactive Date 1/1/2011 2011 Claim Made 16/11/2013 Claim first made on 16/11/2013, Wrongful act happen on 15/5/2012 2012 2013 Wrongful Act 15/5/2012 2014 1 st Policy 2 nd Policy 3 rd Policy CLAIM 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.
8 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) 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
9 -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 EXTENSION - Estates and Legal Representatives - Acquired Entity or Subsidiary - Fraud and Dishonesty (Optional) - Increased Aggregate Limit of Indemnity (Optional)
10 -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 EXCLUSION - Supply of Goods - War & Terrorism - Absolute Asbestos - Previous Business - Bribe & Illegal Payment
11 STANDARD PREMIUM PRACTICE Business Type Annual Report & Overall business Experience & QualificationClaimHistory Limit of liability Deductible
12 PROFESSIONAL INDEMNITY INSURANCE (PI) QBE AIGACE Non Preferable Risk * Geotechnical / Soil * Environment Engineering * Nuclear Engineering * Mining Engineering * Chemical Engineering * Aeronautical / Space Engineering * Marine / Naval Engineering * Offshore Platform Engineering Limit of CapacityUSD 20 MUSD 5 M – 10 MUSD 10 M Single Project Period7 Years> 10 Years1.5 Years LOCAL CAPACITY USD 5 M – USD 20 M INTERNATIONAL CAPACITY USD 10 M – USD 30 M Example Of Local Capacity Market Capacity
13 ClientClient ApplicationApplication InsurersInsurers 1. Insured complete Application Form submit to LOCKTON.Application Form 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 POLICY LOCKTONLOCKTON Policy Insurer
14 ROLE OF INSURANCE BROKER 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
15 CLAIM EXAMPLES Royal Plaza Hotel at Nakhonratsima collapsed on 13 th 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?
16 CLAIM EXAMPLES Burapha University, Chonburi, 2 nd Flooring collapsed on 15 th 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?
17 CLAIM 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?
18 CLAIM 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
19 INSURED INSURANCE CLAIMANT Claim First Made Claim Pay damages, Indemnity Pay Defense, Investigation LOCKTON Lockton report claim and assist Insured to get their Claim. Consult 1 1 2 2 3 3 4 4 CLAIM PROCESS
20 STANDARD CLAIM PRACTICE 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 : The date in which the Insured/Company first became aware of the matter, if other than the court summons. Notice letters and/or demand letter and/or other written correspondence 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.