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What You Should Know About Top-up Insurance

1.  What is top-up insurance?
A top-up insurance pays for the amount over and above your PII Scheme mandatory limit up to the top-up limit that you have purchased and is available to you.  
2.  Is it compulsory to purchase top-up insurance?
No, it is not compulsory to purchase top-up insurance.  
3.  When should law firms consider to purchase top-up insurance?
Law firms should consider purchasing a top-up policy when the mandatory limit is insufficient to provide cover for the amount of work that they do or when a client requires a certain minimum amount of coverage. The purchase of top-up insurance can take place at any time upon confirmation of the Mandatory Policy cover.
4.  What should law firms consider when purchasing top-up insurance?
Below are points to consider when purchasing top-up insurance:
  a. The top-up coverage amount required based on the work the firm will carry out:  
  • Determine whether there is a minimum requirement from your client;
  • Determine whether the top-up amount is sufficient to cover the value of your file(s) if you are sued;
  • If your law firm had previously purchased a top-up cover, ideally the law firm should continue to obtain the same level of cover, since the Mandatory Policy is a claims-made policy.
  b. Whether the limit of indemnity apply to each and every claim or in the aggregate:
  • Will the insurer apply the Limit of Indemnity on each/per claim made during the year or apply only one limit of indemnity to cover all claims made during the year?
  c. The sub-limit cover applicable:
  • Is the sub-limit amount sufficient to the law firm?
Note: Sub-limit is the limit of indemnity or amount of coverage available to cover a specific type of loss.

  d. The coverage for defence cost:
  • Is defence cost:
    •   covered within the Limit of Indemnity?; or
    •   covered in addition to the Limit of Indemnity?
  e. The retroactive date:
  • Does the policy cover claims which arose from legal work conducted in previous years, going back to when the firm was first established or when the lawyers obtained their first Practicing Certificate?  
  • How far back does the policy cover legal work conducted in previous years? What is the Retroactive Date?
Note: The Mandatory PII Scheme has an unlimited retroactive cover. It covers all legal work conducted since the firm’s establishment or your first Practicing Certificate.

  f. Whether the top-up policy “follow-form” the mandatory policy:
  • Are the terms and conditions under the top-up policy the same as the Mandatory Policy?
  • Look out for terms and conditions from the Mandatory Policy that are not included, and the exclusions listed in the top-up insurance (eg loss of documents, dishonesty, employee embezzlement, run-off cover).
  g. Disclosing law firm’s claim history:
  • Law firms must disclose any and all information that is requested by the insurer/insurance broker for the assessment of risk and coverage to provide.
  • The top-up insurance which you buy shall not be applicable to any claims or circumstances that you have already become aware of.
5.  Is there a recommended/endorsed Bar Council list of top-up insurers/insurance brokers?
Bar Council does not have a list for law firms to refer to. Law firms are free to purchase top-up insurance from any insurer/insurance broker.

However, we note that the Insurance Broker for the PII Scheme do provide top-up that is follow form of the Mandatory Policy.  Another advantage of purchasing top-up from the Insurance Broker for the PII Scheme is that in the event you need to make a notification to the PII Scheme Insurer, you would not be required to make a separate notification to your top-up insurer/insurance broker.
In selecting your top-up insurer/insurance broker, do consider the points we have shared above.