I am a chartered account and want to know the scope of professional indemnity policy?
Raghavendra Kini, Mangalore
Professional indemnity policies for chartered accountants basically cover the legal liability, which the insured could incur by way of losses to clients arising due to acts of omissions or errors on the part of the insured, or his paid employees, named in the proposal. Such acts committed should be in the course of rendering professional services.
However, delays caused by the insured himself, like loss suffered by a client due to delay in filing of his return by the chartered accountant, are specifically excluded from the scope of the professional indemnity insurance. The premium under the policy depends on two parameters—limit of liability in any one year (AOY) and the limit of liability in any one accident (AOA). Premium for the paid assistants and apprentices is charged separately. Most insurers issue this policy with compulsory deductible, 0.5 per cent of AOY limit or Rs 5,000, whichever is less.
