HC Suit 376/2021
Indemnification of sums paid pursuant to settlement agreements
– A pragmatic approach to considering civil liability under
PI policies.
This case write-up is a short summary on the latest case law on
the interpretation of a few common clauses found in PI policies,
and should be read by brokers, insurers and any insureds who might
benefit from having PI cover.
Summary
Insuring clauses in Professional Indemnity policies frequently
define Cover for "Civil Liability", which is
"any legal liability to pay Compensation... arising from
any civil liability resulting from a Claim for breach of
professional duty...".
In this case, the Singapore High Court has held that
"Compensation" is distinct from the "civil
liability" (even though the former arises from the latter). To
meet the requirements to trigger cover, a plaintiff must show that
the civil liability gave rise to its obligation to pay
"Compensation".
