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Professional Indemnity - Premium Calculation

Pricing Methods

Method 1: Simplified Fixed Packages (Current Business Practice)

Professional Indemnity uses fixed premium packages based on limit of liability:

Limit of Liability Premium (incl. VAT)
AED 50,000 AED 2,100
AED 500,000 AED 2,100
AED 1,000,000 AED 2,100
AED 4,000,000 AED 7,350
AED 4,000,000 (alternative) AED 10,500

Application: - Fixed premiums for standard limits - No complex rating factors - Simple limit selection = instant premium

Above Standard Limits: - Above AED 4,000,000 = Underwriter referral required - Custom pricing based on risk assessment - Additional documentation required

Method 2: Detailed Rating Method

Based on historical Premia data, some PI policies use percentage-based rating:

Average Rates from Database: - Product 5050 (General PI): 0.38% average rate - Product 5060 (Medical Malpractice): Higher rates - Product 5070 (D&O Liability): Custom rating

Rating Formula: 

Base Premium = Limit of Liability × Rate %
Final Premium = Base Premium + Loadings - Discounts

Note: Method 1 (Fixed Packages) is the primary pricing method for most PI policies

Quote Requirements

Required Documents

All Professional Indemnity quotes require:

  1. Trade License - Business registration
  2. Emirates ID - Owner/director identification
  3. Additional documents - As required per risk

Underwriter Referral

Cases requiring underwriter approval: - Limits above standard packages - High-risk professions - Adverse claims history - Non-standard coverage requirements

Premium Components

What's Included

The quoted premium includes: - Base coverage premium - VAT (5%) - Policy fees

No Rating Factors

Unlike traditional rated products, PI uses: - Fixed pricing - Set premium per limit - Package approach - Pre-defined options - Simple selection - Choose limit, get price

Coverage Basis

Claims-Made Coverage

All PI policies are claims-made: - Policy must be active when claim is made - Retroactive date determines coverage start - Claims after policy expires are not covered

Retroactive Date

Required on all policies: - Determines earliest covered incident date - Cannot be after policy start date - Critical for coverage assessment

Next Steps