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Claim Process FAQs

A claim is defined under Clause 35(d) of the 2020 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(q) of the 2020 as “any fact, circumstance or event which you reasonably anticipate could give rise to a claim against you at any future time”.

Example: Upon carrying out a random check of your firm’s Client’s Account, you discover that money has been withdrawn from the account for no apparent reason.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.
Under Clause 12(a) of the 2020 Certificate of Insurance ("COI"), you have 60 days to notify a claim or notifiable circumstance.

It is however encouraged that when you become aware of a claim or notifiable circumstance you immediately notify it. This will enable you to get the services of a panel lawyer and possibly resolve the claim or 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 or notifiable circumstance.
Yes. As long as you are aware of a claim or notifiable circumstance, you should notify the Insurer even if it is within your base excess. 
By virtue of Clause 12 of the Certificate of Insurance ("COI"), make a notificaiton of the claim or notifiable circumstance in writing by fax, letter or 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

Email: mbar@marsh.com;
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 RM125,000 ie RM1,254 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
OR
  1. RM 125,400 x 5 (Five times their base premium) = RM 627,000.
Whichever is the lower.

As RM100,000 is the lower of the two amounts, the Claims Loading of RM100,000.00 will be added to the Base premium of RM125,400 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 on your own or you can 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 2020 Certificate of Insurance ("COI").

However, in practice, a panel solicitor will usually be appointed to take over conduct of the matter within 1 to 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 2020 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 2020 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 Certificate of Insurance. This applies regardless of whether a Judgmenet In Defualt has been obtained against the firm or if the claim against the firm is halfway through trial. Any form of third party notification will not be accepted.
Last updated: 21/05/2014