The scope of the cover however differs with profession. A medical practitioner can insure himself and his partner or consulting doctors against legal liability claims made by a patient based on bodily injury or by the attendees or relatives in case of patient’s death. Similarly, architects and engineers can insure themselves against liability arising out of design defect, inappropriate design leading to construction damage, and other harm caused to the third party.

The policy also covers accountants and lawyers who work for the public for a fee, as independent contractors or as a partner or shareholder.

The indemnity insurance does not cover liabilities arising due to criminal acts, war and nuclear perils, breach of confidentiality and hence does not pay for fines, punitive, or penalties in such cases. Also, the amount that comes under this insurance is not limited and depends on the insured’s perception of risk. "Any limit of indemnity can be taken. Policies up to Rs 600 crore have been issued in India," said Rahul Aggarwal, CEO, Optima Insurance Brokers.

The limit is based on the risk, the probability of the occurrence as assessed by the insured, and the maximum amount that he can pay without risking his business. The premium rates are also based on risk profile of the insured. "Broadly speaking, the premiums can range between 0.2 per cent and 2.5 per cent of the limit of indemnity depending upon the type of coverage and the quality of risk," said Aggarwal.

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