In the 2^nd quarter of any given year the PII Committee and the appointed Broker discuss to confirm and agree the premium and the terms for the following policy period.  This is then agreed with the Insurer and embodied in the Master Policy and Certificate of Insurance ("COI") which is executed by Bar Council on behalf of its Members and the Insurer.

The Certificate of Insurance or COI represents the contract between Members and the Insurer.  It provides the terms and condition of indemnity for Members against civil liability that arises from their legal practice.

“Legal Practice” is defined as "the provision of such services including pro bono and all professional services as are provided in the normal course of carrying on the profession as a legal  practitioner in an approved private practice anywhere in Malaysia as governed by and in accordance with the LPA" (refer clause on definition, eg Clause35(k) of the 2020  COI).

The Master Policy and COI which provide details of the terms, conditions and exclusions of the insurance policy can be viewed at and downloaded here.  The Schedule of Insurance specifies how much you are covered for ie your Mandatory Limit of Indemnity as well as the Base Excess or deductible applicable to each firm.  The Schedule of Insurance is sent to the firm by email after payment of the premium for the renewal of the firm’s policy.

You may also view and download the Schedule of Insurance at any time by entering your firm’s username and password (provide to you by Marsh during renewal) at http://app.jltinteractive.com/PIIOnline/ProposalForm/Login?ReturnUrl=%2fPIIOnline.

It means that if the mandatory limit of your firm is RM250,000, then each and every claim notified under the policy for that year is covered up to RM250,000 regardless of how many claims are notified for that year, subject to all terms and conditions of the COI including clauses on Base Excess and the definition of One Claim. 

Your mandatory limit of indemnity is the maximum limit that your firm is insured for in the Mandatory Scheme and it is determined by the number of lawyers in the firm.  The limit starts at RM250,000 for a one-lawyer practice and increases by RM50,000 for each additional lawyer up to a maximum of RM2 million, which is reached when a firm has 36 or more lawyers.  Additional purchases above your Mandatory Limit is called the Top-Up.

Your firm’s mandatory limit of indemnity is stated in Item 7 of your Policy Schedule.

The sole proprietor/partners of the firm as well as all employees of the firm as defined in the COI which includes legal assistants, chambering students, consultants and office or clerical staff.  If a lawyer is not included in the Policy Schedule, there is no protection under the PII Scheme.

For retired lawyers and lawyers who leave practice, run-off cover is provided under the annual Master Policy issued to Bar Council.

It is the amount which is borne by the firm in the event of a claim, and paid towards the defence costs and any judgement or settlement in any one claim.  The Insurer shall provide coverage for those amounts which exceeds the Base Excess.

For more information on Base Excess, please refer to the Base Excess FAQs.

The base excess of your firm is stated in Item 9 of the Policy Schedule attaching to the COI.

It starts at RM10,000 for a one-lawyer Firm up to RM250,000 for a firm with more than 48 lawyers.  The base excess  is also determined by the number of lawyer in your firm.  A firm can opt to reduce their base excess at an additional premium.

Clause 2 of the COI provides that Insurers will indemnify you against civil liability for a claim that:
(a)  arises from your legal practice; and
(b)  is made against you during the Period of Insurance.

Clause 32 of the COI sets out what is excluded under the terms of the policy (unless specifically referred to within the other clauses of the COI).  Loss of documents is not excluded under Clause 32.  Thus, any claims arising from loss of documents would fall for consideration under the COI subject to all other terms and conditions.
               
Clause 32(e) excludes “any liability directly or indirectly caused by or contributed to, by or arising from or in respect of misconduct (except as provided in Clause 11)”. This means that the party committing the act and any person who condoned the act is not protected under the Policy. An ‘innocent partner’ however will be protected under Clause 11 of the COI which provides: “Notwithstanding the Exclusion in Clause 32(e), we shall indemnify the Firm and its employees against any claim arising out of misconduct excluding indemnity to any person(s) or employees who were party to or condoned such misconduct relating to the claim”.

However, this coverage is subject to clauses 11(a) to (e) of the COI including a sub-limit of RM350, 000 or the Firm’s limit of indemnity whichever is the lower.

Yes, the Insurer’s decision can be contested subject to the clauses relating to the matter.

Clause 20 of the 2020 COI states:
“In the event of a dispute on whether a claim should proceed to trial or settlement, advice shall be taken from a senior member of the Malaysian Bar to be appointed by both of us or in the absence of such mutual agreement, to be appointed by the President, for the time being, of the Malaysian Bar.  The option to invoke this clause by either party shall be made within 30 days of the written notification of our decision on whether to contest or settle any legal proceedings”.
             
Clause 21 further provides that this advice shall bind both parties and the fees payable for this advice shall not exceed RM10,000 and shall be shared equally between both parties.
               
Clause 22 provides that if both you and the Insurer cannot agree on invoking clause 20, and if Insurers recommend that a claim be settled but you elect to contest the proceedings, you may do so with the Insurer’s prior written consent with a legal practitioner of your choice PROVIDED THAT Insurer’s liability for all losses arising out of the claim shall not exceed the amount for which that claim could have been settled plus legal costs up to the date Insurers and/or their authorized representatives recommend the settlement in writing to you.