(VI) Personal Liability or Professional Liability Insurance

Will professional liability insurance (e.g. for doctors or lawyers) cover all claims resulting from professional negligence? Are there any guidelines for defining "negligence" in such cases?

Nowadays, anyone who gives another person advice and/or services that require skills according to the standards of a recognized discipline or expertise might be regarded as a professional.

In Hong Kong, the law requires members of certain professions to have professional indemnity insurance. For example, as we have discussed in the answer to Question 8 in Part I, the law requires insurance brokers to have this type of insurance.

Under professional indemnity insurance, typical coverage includes: breach of statutory duty and/or common law duty; unintentional defamation and infringement of patent, copyright and trademark; loss or damage to documents; criminal or malicious acts by employees and principal of the insured person/company.

The typical exclusions (items that are not covered) include: criminal or deliberated wrongful acts of the insured professional; claims or circumstances known prior to the policy taking effect; any matters arising from or as a result of insolvency, bankruptcy or liquidation; acts of war or terrorism; and, any matters outside of the specified jurisdiction or territory.

Professional negligence may arise from an act or continuing conduct of a professional which fails to meet the standards of the required care and skill, and results in provable damage to his or her client. However, negligence does not include the exercise of professional judgment even where the results are detrimental to his or her client.