By Decree 22 of September 2016, published in the Official Gazette on October 11 2016, the minimum requirements for mandatory professional indemnity (PI) insurance for lawyers were approved. The mandatory PI requirements for lawyers cover:
- all damages, including pecuniary and non-pecuniary, indirect, permanent, temporary and future damages;
- gross negligence of the insured and negligence, gross negligence and wilful misconduct of collaborators of the insured;
- claims from clients and third parties in general;
- claims arising from the loss of documents, money or securities; and
- the joint and several liability of the insured with others, without prejudice to the insurer's recourse action.
In addition, the policy should:
- provide for an unlimited retroactive period;
- provide for a discovery period of no less than 10 years in case of cessation of the insured's activity during the policy period; and
- not provide for termination clauses in case of notification of claims or payment of an indemnity.
The minimum limits vary depending on the firm's turnover and number of professionals:
- Single practitioners with a turnover not exceeding €30,000 must have a policy with a limit of at least €350,000 per claim, per year;
- Single practitioners with a turnover of between €30,000 and €70,000 must have a policy with a limit of at least €500,000 per claim, per year;
- Single practitioners with a turnover exceeding €70,000 must have a policy with a limit of at least €1 million per claim, per year;
- Law firms with up to 10 professionals and a turnover not exceeding €500,000 must have a policy with a limit of at least €1 million per claim and €2 million per year;
- Law firms with up to 10 professionals and a turnover exceeding €500,000 must have a policy with a limit of at least €2 million per claim and €4 million per year; and
- Law firms with more than 10 professionals must have a policy with a limit of at least €5 million per claim and €10 million per year.
These figures will increase by 25% according to Article 1917 to cover the defence costs of the insured.
The new provisions will come into effect on October 11 2017.
For further information on this topic please contact David Maria Marino at DLA Piper Italy by telephone (+39 02 80 61 81) or email (firstname.lastname@example.org). The DLA Piper website can be accessed at www.dlapiper.com.
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