Kanokanga & Partners: PROFESSIONAL INDEMNITY INSURANCE

Published 12 January 2017 by Kanokanga & Partners

PROFESSIONAL INDEMNITY INSURANCE

At its Annual General Meeting of the 9th December, 2016, the Law Society of Zimbabwe resolved to introduce professional indemnity insurance for all law firms and lawyers falling under its jurisdiction.

What is Professional Indemnity Insurance?

Professional Indemnity Insurance protects professionals and their businesses in the event of claims made by clients (or a third party) suggesting that they have suffered loss as a result of non-performance, mal performance and or professional negligence in the services provided.  Put simply, Professional Indemnity Insurance provides protection for businesses and professional persons in respect of legal liability arising from the conduct of their practice or business.

Extent of the Professional Indemnity Insurance Cover

            The Professional Indemnity Insurance covers the following;

  1. Financial prejudice to members of the public caused by registered legal practitioners and or their employees.  A client who suffers loss as a result of the conduct of his or her lawyer and or that lawyer’s employees will now be compensated by the Professional Indemnity Insurance.
  1. Professional negligence resulting in legal liability for loss or damage, legal costs and other expenses arising out of any claim.
  1. Accidental damage and loss to property within a law firm.

Each law firm is insured to a limit of $1 250 000.00 per year.  This is a significant development in the legal profession and good news to members of the public and international law firms or businesses wishing to engage the services of Zimbabwean law firms.  Before this development, members of the public who suffered financial prejudice as a result of the conduct of a registered legal practitioner had to look to the Law Society Compensation Fund for relief.  However, over  the years due to the increase in the number of registered legal practitioners involved in theft, fraud, forgery and other acts of dishonesty, the Compensation Fund became inadequate to fulfill its role of compensating members of the public who would have suffered financial prejudice as a result of the conduct of such legal practitioners.

What members of the public should do.   

The Professional Indemnity Insurance Cover is enjoyed only by those law firms who will have paid their premiums.  In light of this, it becomes important for members of the public to check on whether or not the law firm they wish to engage has Professional Indemnity Insurance.  Do not take the risk of dealing with a law firm which does not have Professional Indemnity Insurance.  In this regard I am pleased to advise that this firm does have Professional Indemnity Insurance.