Individual agents have been exempted from buying professional indemnity cover.
Earlier, IRDAI had constituted a seven-member committee headed by Yegnapriya Bharat, Chief General Manager, Nonlife, IRDAI to draft terms and conditions for standard indemnity policy dedicated for insurance intermediaries. However, there is no clarity if insurance agents will be required to get themselves professional indemnity policy.
In its report, the committee said that professional indemnity cover is required for intermediaries - corporate agents, brokers, insurance marketing firms and web aggregators.
Professional indemnity insurance protects policyholders against any litigation due to errors or negligence in their practice. In case of insurance intermediaries, such errors can occur due to judgmental errors. So far, professional indemnity insurance cover was available only for doctors, hospitals, lawyers, solicitors, chartered accountants, management consultants, architects and financial advisors.
The committee has recommended the sum insured slabs for intermediaries:
|
Intermediary |
Sum insured |
|
Direct broker |
Rs.1 crore - Rs.50 crore |
|
Composite broker |
Rs.5 crore to 100 crore |
|
Corporate agent |
Rs.15 lakh to Rs.100 crore |
|
Web aggregator |
Rs.25 lakh and Rs.100 crore |
|
Insurance marketing firm |
Minimum Rs.10 lakh |
Industry data indicates that policyholders can buy such a policy of Rs.5 crore by paying a premium of Rs.1.5- 2 lakh.