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Claim Process FAQs

A claim is defined under Clause 35(d) of the 2019 Certificate of Insurance (COI) as:
(a)     A demand for, or an assertion of a right to, compensation or damages; or
(b)     An intimation of an intention to seek compensation or damages.

An example of a claim is a writ, a letter of demand or even a threat to sue.
A notifiable circumstance is defined under Clause 35(1) of the 2019 “a fact, circumstance or event which may reasonably be anticipated to give rise to a claim”.

E.g. Upon carrying out a random check of your firm’s Client’s Account, you discover that money has been withdrawn from the account for no apparent reason. There has not been a claim from any of your clients. This is a notifiable circumstance and warrants a notification to be sent to Marsh, who will then inform the Insurer.
You have 60 days to notify a claim/notifiable circumstance under Clause 12(a) of the 2019 COI.

It is however encouraged that when you become aware of a claim/notifiable circumstance you immediately report it. This will enable you to get the services of a panel lawyer and possibly resolve the claim/ notifiable circumstance at an early stage.
Notify it anyway. Marsh will then address the matter with Insurers. There are no additional loadings or penalty for notifying a claim/notifiable circumstance.
Yes. As long as you are aware of a claim/notifiable circumstance, you should notify Insurers even if it is within your Base Excess. 
By virtue of Clause 12 of the COI, please report a claim/notifiable circumstance in writing by email to:-

Marsh Insurance Brokers (Malaysia) Sdn Bhd
Level 42-01A (West Wing) Q Sentral
2A, Jalan Stesen Sentral 2
Kuala Lumpur Sentral
50470 Kuala Lumpur

Telephone No: +603-2723 3241 / 3388

Once your claim notification is submitted, Marsh will review your notification and send an acknowledgment letter within three working days.  If you do not receive an acknowledgement letter within the stipulated time, please call Marsh at 603-2723 3241/ 3388 and ask for the MBar Department.

Marsh will then:-
  1. Notify the Insurers of the claim.
  2. Forward a Claim Notification Form to you.  You are required to complete and return the completed form to Marsh as soon as possible.
  3. Echelon Claims Consultants, the third party claims administrator appointed by the Insurer, will also contact you to obtain key information and determine if there is any urgent matter which requires addressing, usually within 1 to 2 working days.
  4. Where a claim relates to a Writ, the Insurers will appoint their panel solicitor to take over conduct of the matter.
Claims Loading is the amount the Insurer charges when there is payment made on your claim for damages and/or defence cost. 
No. Claims Loading is only imposed when the Insurer pays towards defence costs and /or damages.
The maximum claims loading that the Insurer can charge is 25% of the total amount they have paid. This 25% will be spread over a 5 year period such that you are charged 5% per year of the total amount paid. The payable claims’ loading is added to your Firm’s base premium.

Illustration 1: Firm A has 100 Legal Prectitioners. The Firm’s base premium is RM 125,000 ie RM 1,254 per practitioner x 100 practitioners. The firm made a notification in 2016 which is then settled in 2018 for RM2 Million.

The calculation of Firm A’s Claims’ Loading for the year will be either:
  1. 25% of RM2 Million (25% of claim amount paid) = RM 500,000.00 spread over 5 years equals to RM 100,000 per year
  1. RM 125,400 x 5 (Five times their base premium) = RM 627,000.
Whichever is the lower.

As RM 100,000 is the lower of the two amounts, the Claims Loading of RM 100,000.00 will be added to the Base premium of RM 125,400 for Firm A, for each renewal AFTER the payment has been made by Insurers. Since Claims’ Loading is charged for 5 years from date of notification, the Firm would have to incur this until the year 2021. Service tax is separate, and must be added.
You have the right to defend a claim made against your firm by yourself / appoint a legal practitioner of your choice ONLY IF a panel solicitor has not been appointed to take over conduct of your claim within 14 working days as per Clause 18 of the 2019 COI.

However, in practice, a panel solicitor will usually be appointed to take over conduct of the matter within 1-2 working days. As the Insurer bears a larger risk in the claim, they have the right to take over conduct of a claim made against the Firm including the defence or settlement of the claim (Clause 18 of the 2019 COI).

As such, it is only when a claim is within the Firm’s base excess that Insurers may allow you to take conduct of the matter with their prior written consent as provided in Clause 19 of the 2019 COI.
This is termed a third party notification. Insurers do not accept third party notifications. It is the Firm who is being sued who has to notify the claim in accordance with the terms of the COI. This applies regardless of whether a JID has been obtained against the firm or if the claim against the firm is halfway through trial, etc. Any form of third party notification will not be accepted.
Last updated: 21/05/2014