Professional Indemnity For Lawyers And Advocates In KenyaPosted on 2018-07-14
Lawyers and advocates professional indemnity is an insurance cover that provides financial protection to the insured in the event that clients suffer loss as a result of negligence or non-professional acts, alleged wrongful or negligent advice.
The basic legal position is that every person who enters a learned professional, undertakes to bring to it a reasonable degree of care and skills, and failure to do this may leave the professional person exposed to demand for damages by those who may suffer damage, loss or injury as a result. It costs time and money to defend against a claim of malpractice, professional misconduct, or breach of duty and one can be held responsible not only for your own actions but also those of your partners, employees and volunteers.
In Kenya, The Advocates (Professional Indemnity) Regulations, 2004 imposed a requirement for a professional indemnity cover to be purchased by every Advocate practicing on his own behalf. The cover professional indemnity for lawyers and advocates is to be used in the compensation of clients for loss or damage from claims in respect of any civil liability or breach of trust by the Advocate or his employees. The amount of the cover has been enhanced since the regulations first introduced the requirement and will most likely continue to rise. The Kenya Society of Law (LSK) has asked all practicing lawyers to take the cover each year they renew their license. Under the rules no practicing certificate shall be issued to an Advocate without evidence of the required amount of professional indemnity insurance cover. Additionally, an Advocate who proceeds to engage in practice without maintaining the required level of professional indemnity insurance can face disciplinary action for professional misconduct
The minimum worth of the cover in accordance with the minimum terms and conditions of the insurance indemnity rules of 2012 is Ksh. 2 million to 3 million in case of a limited liability firm. The set minimum cover limit is sufficient for many small provincial firms. There is no maximum ceiling for such covers and the amount paid depends on the professional and worth of a business.
Lawyers, advocates and legal firms are advised to take Top- uUp insurance or also called excess of loss. This is an additional insurance cover above the minimum mandatory cover. The excess of loss will pay for the losses up to the limit taken above which the minimum set limit cannot pay for.
Lawyers are encouraged to take this extra limit to cover them from unforeseeable large claims that may arise. The extra limit should be determined by the size of the firm or the scope of work dealt with in the firm.
In case of a claim, Policies are issued on a ‘claims made’ basis, which means that the claim must be made or reported to the insurer during the period of insurance. The amount your insurance will pay out will depend on the level of cover you have in place. The compensation payment will usually take into account the financial loss that the client has suffered.
What the policy professional Indemnity for lawyers and advocates covers
Professionals may fail to exercise the skill and care that is expected of them this skill and care may be above and beyond their normal duty of care. Professional indemnity cover pays for the cost of defending any action brought against the insured.
This costs caters for:
- Breach of professional duty
- Loss of documents
- Breach of confidentiality
- Dishonest and cost for disciplinary hearings
You will also want to ensure the policy provides protection for:
- All of your firm's current staff
- All of your firm's activities, and
- Past and new principals and prior practices
A lawyer or advocate should seek advice from their broker or insurer to ensure that they have a sufficient level of cover based on their assessment of the firms work.
These factors include,
- The mandatory minimum cover of 2 million.
- Number of years in the profession.
- A group or individual policy.
- Firms claim history.
- The level of cover needed.
Professional Indemnity Rate rates and quotes
In Kenya most general insurance companies offer this type of insurance hence the rates are competitive, give clients value for money. The rates will differ with the insurer chosen and any other rider policy that will be attached to the policy. Some of the biggest professional indemnity insurance companies in Kenya include BRITAM Insurance, Heritage insurance, AIG Insurance and Madison Insurance. While for professional indemnity for doctors in Kenya, AAR insurance, Madison Insurance are some of the biggest providers in this line of business.
While comparing quotes, One should consider the below factors in choosing an insurer,
- Insurer who is experienced in the field of professional indemnity.
- Insurer who settles claims in a fast and efficient manner without the matter dragging on for ages.
- Offers a package tailor made to sort the needs of your business or organization.
- An insurer that is ready to help you accomplish the long term plans of your business.
- An insurer who you will have a good working relationship.