The language of insurance can often be complicated, and it is not always clear to a registrant, or the College what the differences are amongst different types of insurance products. We reached out to the insurance brokers at BMS Canada Risk Services Ltd. and learned more about the similarities and differences.
Since the College’s only mandated insurance requirement details minimum coverage limits of $3 million dollars (CDN) per occurrence there should be no difference between someone submitting proof of professional liability insurance vs professional indemnity insurance, provided the policy meets the minimum limits set out by College. In either case, the policy should protect against claims arising from possible negligence/error/omissions and should pay the insured’s litigation costs as well as any damages awarded to the plaintiff by the court. As with insurance policies in general, there would be differences in sub-limits, lines of coverage, policy wording, exclusions, etc. between different policies and insurers.
What is the Difference Between Indemnity vs Indemnity Insurance?
Proof of indemnity, rather than proof of indemnity insurance, could be a circumstance where the registrant is relying on an indemnification clause in a contract or agreement – for instance, where the clause states that another party will repay or cover them for an incident. Whereas, with an insurance policy, the policy is in place to protect the interest of the insured individual and/or organization.
If your employment contract provides indemnity to you as an employee, it is important to review the specifics of the wording. It could be that your employer or organization will respond to actions or claims brought against you. However, it’s often the case that this indemnity will be specific to actions or claims that are based on your employment functions. Check to see if costs, such as damages, settlement, and defence costs will be paid by the employer on the employee’s behalf, or if you would be responsible for paying these and then seeking reimbursement from your employer. If costs are paid by the employer on the employee’s behalf, the employer will likely manage the decisions taken on matters such as defence and settlement.
As indemnity under an employment contract is likely attached to activities carried out under function of employment only, gaps may exist if the registrant changes jobs, works elsewhere, or volunteers. It is always best to have your own insurance.
If a registrant is relying upon employer indemnity it is important to confirm if the employer has a professional liability or professional indemnity insurance policy in place or if they are instead agreeing to indemnify all their employees utilizing their own funds to do so.
If your employer is insured, please confirm that “employees” are insured under the policy and that the coverage limits of the policy meet the College’s minimum requirements. If there is no insurance policy in place, does your employer have sufficient funds to afford all employees the minimum coverage limits required for each from a regulatory perspective? If not, you and your patients are at risk and you should ensure you have your own professional liability insurance coverage.
This article is provided for information purposes only. It is not, nor should it be considered legal or broker advice, and should not be relied upon as such. We would encourage you to seek legal advice when reviewing employment contracts and agreements and/or broker advice when reviewing insurance policies.