Professional Indemnity (PI) Insurance Malaysia
Professional Indemnity (PI) policies operate on a claims-made basis. This means the policy active at the moment a claim is first made against your firm responds to the loss, provided the negligent act occurred on or after the Retroactive Date specified in your schedule.
Statutory boards and contractual mandates
Malaysian regulatory bodies (Board of Engineers Malaysia, Lembaga Arkitek Malaysia, Bar Council, MIA) and corporate procurement tenders mandate continuous PI coverage. Allowing a claims-made policy to lapse erases your historical retroactive protection unless run-off or prior-acts coverage is negotiated.
Coverage & Technical Matrix
| Coverage Component / Parameter | Status / Basis | Underwriting Notes |
|---|---|---|
| Civil Liability & Negligence | Covered | Breach of professional duty, error, or omission |
| Legal Defense & Investigation Costs | Covered | Covers representation during disciplinary or court proceedings |
| Loss of Client Documents / Data | Covered | Costs to reconstitute destroyed or damaged records |
| Retroactive Date Continuity | Configurable | Preserves coverage for past work upon annual renewal |
Standard Policy Exclusions
- Bodily injury or property damage unrelated to professional advice (covered under CGL)
- Intentional dishonesty, criminal fraud, or malicious acts by principals
- Known claims or circumstances prior to policy inception that were not disclosed
- Contractual performance guarantees or liquidated damages exceeding common law liability
Underwriting & Quotation Requirements
- Completed and signed Professional Indemnity Proposal Form
- Company profile and CVs/qualifications of key principals and directors
- Gross fee income breakdown: past year, current year, and projected next 12 months
- Sample standard client contract terms and limitation-of-liability clauses
Frequently Asked Technical Questions
What does a Claims-Made basis mean in Professional Indemnity?
A claims-made policy only responds if the policy is active when the claim is filed or notified, and the work was performed after the policy Retroactive Date. If you cancel the policy when a project ends, future claims from that project will not be covered.
Can we insure a single project instead of an annual practice policy?
Yes. Single Project Professional Indemnity (SPPI) can be underwritten for specific engineering, construction, or IT implementation contracts covering the construction period plus a multi-year discovery run-off period.
Key Underwriting Clauses Defined
Retroactive Date (Claims-Made Policies)
The earliest historical date from which professional services or managerial acts are covered under a Claims-Made policy such as Professional Indemnity or D&O.