Common Professions Covered

One cover, many versions

Professional indemnity insurance in India is tailored to specific professions, because each faces its own kind of negligence claim from clients. The policy wording, exclusions, limits and pricing vary significantly from one profession to another.

The main groups include medical practitioners (medical malpractice cover), chartered accountants and auditors, legal professionals, IT and technology companies, architects and engineers, insurance brokers and other intermediaries, real estate professionals and management consultants. What stays constant is the core: a client's claim for loss caused by a professional error or omission.

Where it is compulsory

IRDAI's Insurance Brokers Regulations require every insurance broker to maintain professional indemnity insurance, and certain other IRDAI-regulated intermediaries must hold it too. No general requirement from their professional bodies has been identified for chartered accountants, lawyers or architects, though clients and contracts often demand it.

Doctors, accountants and lawyers

Insurers rate medical cover by specialty. General practice, with few invasive procedures, normally falls in the lowest-rated group, while surgical specialties and obstetrics are rated higher. Actual premiums vary by insurer.

Medical wordings often carry a consent-to-settle clause: the insurer cannot settle a malpractice claim without the doctor's agreement. A doctor may prefer to contest a claim to protect a reputation even where settling would be cheaper. Some wordings pair the clause with a hammer clause, which limits the insurer's liability if the doctor refuses a settlement the insurer recommends.

For a firm of chartered accountants the cover responds to claims arising from professional negligence such as an incorrect audit, wrong tax advice or a misstatement in a financial report that causes financial loss to a client. For lawyers, a missed filing deadline is a classic covered error or omission, and one of the most common kinds of claim against legal professionals.

IT firms, architects and engineers

IT errors and omissions insurance often goes beyond standard professional negligence cover. It often includes elements of cyber liability, such as data breach response costs, network security liability and media liability.

Cover for an IT company is underwritten on its actual exposure: the services it provides, the liabilities it accepts in client contracts, its revenue and its claims record. Those facts decide the limit, the wording and the price, which is why they are established before cover is arranged.

Architecture and engineering claims are described as long-tail. Structural or design defects may not become apparent until years or even decades after construction. Because the cover is claims-made, this makes continuous cover with properly maintained retroactive dates especially important for these professions.

Rules at a glance

Key points

• Professional indemnity wordings, exclusions, limits and pricing vary by profession.
• Insurance brokers must maintain professional indemnity insurance under IRDAI's Insurance Brokers Regulations.
• Medical cover is rated by specialty, with general practice normally in the lowest-rated group.
• A consent-to-settle clause stops the insurer settling a malpractice claim without the doctor's agreement.
• IT errors and omissions cover often includes cyber liability elements such as data breach response costs.
• Architects' and engineers' claims are long-tail because defects may appear years after construction.

Common misunderstandings

• Professional indemnity is not compulsory for every profession. IRDAI requires it of insurance brokers and certain other insurance intermediaries; whether another regulator or a professional body requires it has to be checked for each profession.
• A consent-to-settle clause is not unlimited control: where it is paired with a hammer clause, refusing a recommended settlement can limit what the insurer pays.
• IT errors and omissions cover is not identical to a standalone cyber policy: it often includes cyber elements, and the wording shows which.
• A building finished without complaint is not the end of an architect's exposure: defects may surface years or decades later.

Questions people ask