Resolving A Professional Idemnity Claim

A leading Indian IT company mandated PINC Insure to handle the professional indemnity policy. One of the policies witnessed a claim made against our clients by an American data management company. The two had entered into a contract wherein the Indian company was required to analyse the American company’s data using spend analytics software owned by the latter. The analysed data was in turn sent to the American company’s customers directly by the Indian vendor using the File Transfer Protocol (FTP) mechanism.

During the process of transfer and retransfer of the analysed data, one customer suspected that data confidentiality was being compromised. Following this allegation, the American company made a claim against the Indian vendor under the following sections:

  • Breach of confidentiality
  • Loss of business due to confidentiality breach
  • Unfair competition
  • Infringement of proprietary information


The American company claimed about USD 400,000 as damages on the Indian Vendor.
As a comprehensive insurance and reinsurance intermediary, PINC Insure has an extensive professional network with various reinsurance underwriters specialising in the professional indemnity insurance space.

THE APPROACH

This approach entailed studying the process adopted by the Indian vendor along with the contract put in place with the American data company. It was imperative to convert technological language used as part of the process documents into simple language. This was necessary to have the insurers, reinsurers and the client on the same page during the claim discussions. As a comprehensive insurance and reinsurance intermediary, PINC Insure has an extensive professional network with various reinsurance underwriters specialising in the professional indemnity insurance space. Our deep understanding of policy wording and proficiency in interpreting downside situations against the backdrop of insurance policies is an added strength.

The Solution


PINC Insure’s advisory entailed:
INTERPRETATION OF THE INSURANCE POLICY
It was vital to interpret the insurance policy conditions in the correct perspective to assess the client’s liabilities. This factor was particularly important since this is a first of its kind claim in the Indian insurance space. Moreover, there was ambiguity in the policy language associated with various other heads of indictment including ‘unfair competition’, ‘loss of business due to the alleged breach’ etc.

THE SETTLEMENT FORMAT

The mediation between the claimant and client finally lead to a global settlement. In this case, PINC Insure ensured that a proportionate formula was not applied generically across the various heads of claim admitted under the policy.

The Result

Leveraging its extensive industry experience in the meticulous interpretation of policy clauses, PINC Insure ensured that the policy responded for the claim instance.

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