Home Committees Professional Indemnity Insurance A Response to Members Regarding the Professional Indemnity Insurance Base Premium
|A Response to Members Regarding the Professional Indemnity Insurance Base Premium|
|Monday, 10 September 2012 10:41am|
Bar Council notes a few Members have expressed dissatisfaction regarding the Professional Indemnity Insurance (“PII”) base premium imposed on all practising lawyers of the Malaysian Bar, claiming that it was too high as commented by Zainul Rijal in Free Malaysia Today, on 21 May 2012. Bar Council appreciates all comments about the mandatory PII Scheme (“Scheme”) and would like to provide some information on the Scheme.
The Scheme was introduced in 1992 with the intention of insuring every lawyer who is licensed to practise. The Scheme provides Bar Council the power to negotiate a reasonable premium and wider scope of equal cover to all Members. The policy under the Scheme provides cover for civil liability, including matters such as libel and slander, liability for loss of documents, fraud of employee and protection for innocent partners in the event of fraud or dishonesty of any other partner(s) or staff. The Scheme even provides protection for retiring or predeceased partners or sole practitioners who have been members of the Scheme.
In order to achieve lower premium, every practising lawyer should ensure that they practise good risk management culture to avoid claims being made against them. This is necessary to ensure the overall claims statistic is kept low, as the figure affects the amount of premium paid by Members. The Insurer looks at our claims statistic as a whole during negotiations regarding the amount of premium.
Since 2004 when the premium was at the highest (RM1,500 per lawyer), Bar Council through the PII Committee looked for ways to improve the Scheme to achieve a better footing to negotiate with the Insurer for reduction of premiums. The PII Committee embarked on a three-year plan with the priority on improving risk awareness, which correspondingly reduces claims. This led to the setting up of the PII and Risk Management Department, which seeks to inculcate a risk-aware culture amongst all lawyers and firms, accomplished through various risk management activities and initiatives made available to all Members for free or at a minimum cost. A few notable risk management efforts by the department include:
Over the years, with practitioners having practised good risk management, the premiums have been reduced on four occasions, the most recent being the premium of RM1,140 for the coming year 2013, as announced in Circular No 154/2012 entitled “Reduction in Professional Indemnity Insurance Base Premium for 2013”. The PII Committee continuously strives to improve the Scheme to provide Members with better coverage.
Bar Council would like to take this opportunity to commend the good work that the PII Committee has done for the benefit of the Bar. Much has been achieved for the benefit of Members under the Scheme.
Nonetheless, Bar Council is always open to suggestions and ways to improve the Scheme for the benefit of Members. If you have any feedback or queries, please direct them to the department by telephone at 03-2032 4511, fax at 03-2031 6124 or by email at email@example.com, where three officers are on hand to assist you.
Lim Chee Wee
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