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Dos
1. Assess Your Risk Exposure Accurately
- Evaluate the nature of services provided, potential liabilities, and legal exposure.
- Consider previous claims or complaints that could indicate your risk level.
2. Choose the Right Sum Insured (Limit of Indemnity)
- Opt for a limit that covers the worst-case scenario based on your industry norms.
- Ensure it includes both defense costs and compensation payouts.
3. Understand the Policy Wording Thoroughly
- Read clauses on retroactive date, exclusions, conditions precedent, and territorial/jurisdictional limits carefully.
4. Disclose All Material Facts Honestly
- Provide a full history of prior claims, ongoing litigation, or regulatory actions.
5. Check for Retroactive Coverage
- Ensure the policy includes a retroactive date to cover prior acts, especially if you are switching insurers.
6. Opt for a Policy with Extended Reporting Period (ERP)
- Useful if you plan to retire, close business, or switch professions — it allows you to report claims after policy expiry.
7. Keep Documentation and Contracts in Order
- Maintain proper records of client agreements, deliverables, communications, etc., to support your defense if needed.
8. Update the Policy Annually
- Update turnover, staff count, and scope of services each year to maintain appropriate coverage.
9. Buy from Reputed Insurers/Brokers
- Choose insurers with strong claims-handling record and understanding of your industry.
Don’ts
1. Don’t Underinsure to Save Premium
- A lower premium now could mean large out-of-pocket losses later.
2. Don’t Delay Reporting Incidents
- Notify the insurer immediately of any circumstance that may give rise to a claim — even if no demand is made yet.
3. Don’t Assume All Legal Costs Are Covered
- Check if legal defense is within the sum insured or in addition to it.
4. Don’t Overlook Territorial and Jurisdictional Limits
- Ensure coverage aligns with your client base – especially if you serve foreign clients.
5. Don’t Omit Sub-Consultants in Your Cover
- If you outsource work, ensure your policy either covers them or that they carry their own indemnity cover.
6. Don’t Forget to Renew the Policy on Time
- Any lapse could break the continuous coverage chain and void retroactive coverage.
7. Don’t Ignore Policy Exclusions
- Be aware of exclusions like fraud, intentional acts, bodily injury (unless covered), contractual liability, etc.
8. Don’t Misrepresent Information in Proposal Form
- Misrepresentation can lead to claim denial or policy cancellation.
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