PROFESSIONAL INDEMNITY INSURANCE COUNCIL OF ENGINEERS JANUARY 22, 2014

1. PROFESSIONAL INDEMNITY INSURANCECOUNCIL OF ENGINEERSJANUARY 22, 2014

2. RISKS MANAGEMENT– MIX STRATEGY Level Of Risk Transferred Risk (Insurance) Reduced Risk (Safety Measures) Avoided Risk Retained Risk

3. PROFESSIONAL INDEMNITY INSURANCE (PI) • To indemnify the insured against legal liability for any claim first made against them during the period of insurance. • Arising from Wrongful Act(i.e. negligent act or error & omission) in the conduct of the Professional Servicespractice carried on by the insured. • Professional Indemnity Policy would provide cover for:- •  compensation, and/or damages awarded against professional •  legal costs and other expenses associated with defending • legal actions (subject to consent of the insurer).

4. DEFINITIONS Wrongful Actshall mean any error, misstatement, misleading statement, act, omission, neglect or breach of duty committed, attempted or allegedly committed or attempted, by an Insuredwhile performing or failing to perform Professional Services. Professional Servicesshall mean services performed by an Insuredsolely in its capacity as their Business Practice for or on behalf of a customer of the Insured. Business Practiceshall mean the business conducted by the Insured, as specified in the Schedule.

5. CLAIM MADE BASIS Claims made basisshall apply only to wrongful acts which happen, and for which claim is made against the Insured, while the insurance is in force. Retroactive Date 1/1/2011 Claim Made 16/11/2013 Wrongful Act 15/5/2012 3rd Policy 2nd Policy 1st Policy 2011 2012 2013 2014 Claim first made on 16/11/2013, Wrongful act happen on 15/5/2012

6. PROFESSIONAL INDEMNITY INSURANCE (PI) Policy schedule • Limit of policy, Up to client, Normally Limit ~ USD 1 M – USD 20 M • Deductible, ~ > USD 10,000 • Premium, ~ > USD 7,000 Type of Policies 1. Annual Policy - For all activities of the Insured and shall renew every year. 2. Single Project Policy - For Specific activity with period more than 1 year. Generally up to 10 Years. 3. Excess Layer Placement - In case of Higher Limit, Broker may use Local Insurance as Primary Layer and use International Reinsurer as Excess Layer

7. POLICY EXTENSION • Libel and Slander • - Project Management • - Outgoing Principals • - Loss of Documents • Intellectual Property • Joint Venture Liability • Consultants, Subcontractors and Agents • Run-off Cover Insured Entity or Subsidiary • - Estates and Legal Representatives • - Acquired Entity or Subsidiary • Fraud and Dishonesty (Optional) • Increased Aggregate Limit of Indemnity • (Optional)

8. STANDARD EXCLUSION - Supply of Goods - War & Terrorism - Absolute Asbestos - Previous Business - Bribe & Illegal Payment • Prior or Pending Claim • Known Claim & Known Circumstance • - Fraud and Dishonesty • - Assumed Duty or Obligation • - Related or Associated Entities • Fines and Penalties • Punitive Damage • Nuclear

9. Experience & Qualification Deductible Limit of liability Annual Report & Overall business Claim History Business Type STANDARD PREMIUM PRACTICE

10. PROFESSIONAL INDEMNITY INSURANCE (PI) Market Capacity • INTERNATIONAL CAPACITY •  USD 10 M – USD 30 M • LOCAL CAPACITY •  USD 5 M – USD 20 M Example Of Local Capacity

11. PROCESS OF BUYING POLICY Client Insured complete Application Formsubmit to Broker. Broker approach the markets for insurance terms. Brokerreturn Quotations with suggestion to Insured. Insured select the prefer one, then receive Policy from Brokerwhile Brokercontinue support for any claims that may occur. Application Policy Broker Insurers Insurer Insurer Insurer

12. ROLE OF INSURANCE BROKER • To work for insurance related issues on your behalf • To assist you in buying insurance and not selling • To analyze and survey of your insurance needs and arrange the insurance which most suits to your exposure. • Market with underwriters different appetites and capacities. • To clarify and discuss with you to choose the appropriate insurance program • To handle and manage the claim until the claim is finally settled

13. CLAIM EXAMPLES CLAIM INVESTIGATION What actually happened? Concrete Beam Cracked What went wrong? Incorrect Design Why did it go wrong? Loading calculation error Was the Insured or one of their employees responsible for what went wrong? Yes Is the loss covered by the policy? Yes Are the Insured’s business activities correctly described in the policy schedule? Yes Was the loss notified in accordance with the requirements of the policy?Yes • 6 Storeys Shopping Complex at Samutprakarn, Concrete Beam Cracked in 2013 • Rectification Cost approx 6mb

14. CLAIM PROCESS Claim First Made 1 2 INSURED CLAIMANT PayDefense,Investigation Paydamages, Indemnity Consult Claim 4 3 Broker report claim and assist Insured to get their Claim. BROKER INSURANCE

15. STANDARD CLAIM PRACTICE • The Insured must give to Brokera written notice of any Claim first made against the Insured - as soon as practicable and during the Period of Insurance. • Relevant documents : • ThedateinwhichtheInsured/Companyfirstbecameawareofthematter, ifotherthanthecourtsummons. • Noticelettersand/ordemandletterand/orotherwrittencorrespondencefromtheclaimantetc. (ifany). • Other additional documents, if required. •  In case there is a circumstance which the Insured realize that it may lead to a claim in the future, it is required by the Insurer to report such circumstance to reserve the right of claim. Brokermay also be able to advise you about whether a situation is a circumstance that should be notified.