1. Forms
2. MI
3. MI-DS-00

Form MI DS 00 - Miscellaneous Professional Liability Declarations

1. What the form is

The MI DS 00 - Miscellaneous Professional Liability Declarations is a critical component of a Miscellaneous Professional Liability (MPL) insurance policy. It is not a standalone coverage form but rather the personalized section of the policy that "declares" the specific details agreed upon by the insured and the insurer. It works in conjunction with the main policy coverage form (often MI 00 01, Miscellaneous Professional Liability Coverage Form) and any endorsements to create the complete insurance contract.

The primary purpose of the MI DS 00 is to summarize key information unique to the policyholder, such as:

• Named Insured: The individual or entity covered by the policy.
• Policy Period: The dates during which the coverage is in effect.
• Limits of Liability: The maximum amount the insurer will pay for a covered claim and in the aggregate for all claims during the policy period. This section may also specify sub-limits for particular types of claims or coverages.
• Retention or Deductible: The amount the insured must pay out-of-pocket before the policy responds to a claim.
• Premium: The cost of the insurance policy.
• Retroactive Date: For claims-made policies, this is the date from which services are covered. Claims arising from services performed before this date are typically not covered.
• Description of Professional Services: A precise definition of the professional services covered by the policy. This is crucial as MPL policies cover liability arising from the rendering or failure to render these specific services.
• List of Endorsements: Any modifications or additions to the standard policy language will be listed here.
• Agent/Broker Information: Details of the insurance agent or broker who facilitated the policy.

Essentially, the MI DS 00 transforms a standard MPL coverage form into a customized policy tailored to the specific risk profile and coverage needs of the insured professional or business.

2. Classes of business it applies to

Miscellaneous Professional Liability insurance, and therefore the MI DS 00 Declarations, is designed for a broad array of professionals and businesses that provide specialized services for a fee but do not fall into traditional professional categories like doctors, lawyers, architects, or engineers (who typically have their own specific E&O forms). The "miscellaneous" moniker signifies its applicability to a diverse range of service providers. Examples of businesses and professions that would utilize this form include:

• Consultants: Management, marketing, human resources, IT, environmental, and other specialized consultants. For instance, a marketing consultant whose advice leads to a significant financial loss for a client could face a claim covered under MPL.
• Technology Service Providers: Software developers (not otherwise covered by a specific tech E&O), IT support services, and web designers.
• Business Service Providers: Bookkeepers, tax preparers (non-CPA), translators, public relations firms, event planners, and travel agencies. For example, a travel agent who makes an error in booking flights, causing financial loss to a client, might be covered.
• Media and Advertising Professionals: Advertising agencies, graphic designers, and publishers (for errors and omissions in their services, distinct from media liability for content).
• Personal Service Providers: Salons (for professional service errors, though bodily injury might require specific endorsements), career coaches, and photographers. A photographer who loses wedding photos could face a professional liability claim.
• Real Estate Related Services (non-agent/broker): Property managers, appraisers (non-real estate), and home inspectors.
• Educational and Training Services: Tutors, corporate trainers, and life coaches.

The key is that these businesses offer specialized services or advice where an error or omission could lead to financial harm for their clients.

3. Special considerations

Several important factors must be considered when utilizing the MI DS 00 and the underlying MPL policy:

• Claims-Made Basis: Most MPL policies, including those using the MI 00 01 form, are written on a "claims-made" or "claims-made and reported" basis. This means the policy in effect when the claim is first made against the insured and reported to the insurer is the one that responds, provided the wrongful act occurred on or after the policy's retroactive date. This differs from "occurrence" policies common in general liability. The MI DS 00 will clearly state the policy period and the retroactive date.
• Retroactive Date (Prior Acts Coverage): The retroactive date is crucial. If not properly managed (e.g., maintaining continuity of coverage or purchasing prior acts coverage), there can be significant coverage gaps for services rendered before the current policy's inception.
• Definition of Professional Services: The description of professional services on the Declarations page is paramount. Coverage will only apply to claims arising from the services specifically listed. Ambiguity or overly narrow definitions can lead to uncovered claims. It's vital this accurately reflects all professional activities of the insured.
• Defense Costs Within Limits: Often, defense costs erode the policy limits, meaning the cost of legal defense reduces the amount available to pay settlements or judgments. Some policies may offer defense costs outside the limits, or an additional defense cost limit, which would be indicated on the Declarations or via endorsement.
• Consent to Settle (Hammer Clause): Many MPL policies include a "consent to settle" or "hammer" clause. This provision typically requires the insurer to obtain the insured's consent before settling a claim. However, if the insured refuses a settlement recommended by the insurer and the ultimate judgment is higher, the insured may be responsible for the difference or a percentage of it. The specifics of this clause can vary.
• Exclusions: While the Declarations page itself doesn't detail exclusions, it's critical to understand that the MPL policy will contain various exclusions (e.g., for bodily injury/property damage (unless specifically endorsed back in for certain professions like salons), fraudulent acts, or services not listed on the Declarations).
• Contractual Requirements: Many clients will contractually require their service providers to carry E&O insurance. The MI DS 00 serves as proof of this coverage and the limits carried.

Real-world example: A management consultant is sued by a former client alleging that the consultant's strategic advice led to a significant loss of market share. The consultant's MI DS 00 will specify the "Management Consulting Services" as the covered professional service, the policy limits available for the claim (including whether defense costs are inside or outside those limits), and the retention they must first satisfy. If the alleged wrongful act occurred before the retroactive date shown on the Declarations, the claim would likely be denied.

4. Key information for agents and underwriters

For agents and underwriters, the MI DS 00 is a focal point for ensuring appropriate coverage and assessing risk:

• Pricing: The premium shown on the Declarations is influenced by factors such as the type of professional services, the limits of liability, the chosen retention, the insured's revenue, years in business, claims history, and the geographic scope of operations. Certain professions are considered higher risk and will command higher premiums.
• Risk Assessment:
  • The "Description of Professional Services" is a primary underwriting concern. Underwriters need to clearly understand the nature of the services being provided to assess the potential for errors, omissions, and negligence. Overly broad or vague descriptions can be problematic.
  • Claims history is a significant indicator of future risk. Underwriters will scrutinize past claims to understand their nature, frequency, and severity.
  • The insured's internal risk management procedures (e.g., quality control, contract review processes, employee training) can influence underwriting decisions and pricing.
• Coverage Gaps:
  • Agents must ensure the retroactive date on the MI DS 00 aligns with the insured’s prior coverage to avoid gaps. If an insured is switching carriers or purchasing MPL for the first time, the availability and cost of "prior acts" coverage are key considerations.
  • Standard MPL forms often exclude bodily injury and property damage. For professions where this is a foreseeable outcome of their professional service (e.g., beauticians, event planners causing property damage), specific endorsements to buy back this coverage may be necessary and would be reflected on the Declarations.
  • Cyber liability exposures may not be adequately covered by a standard MPL policy. Depending on the professional services, a separate cyber liability policy or a specific cyber endorsement to the MPL might be needed.
• Underwriting Guidelines:
  • Insurers have specific appetites for different classes of miscellaneous professionals. Some professions may be considered high-hazard and subject to more stringent underwriting or declination.
  • The financial stability and experience of the applicant are important underwriting considerations.
  • The limits of liability requested should be appropriate for the insured's exposure and the types of clients they serve. Underwriters will assess whether the requested limits are reasonable.
  • The MI DS 00 must accurately reflect all information gathered during the application and underwriting process, including any special conditions or restrictions imposed by the underwriter.

Real-world example for underwriters: An application for MPL comes from a new business consultant specializing in tech startups. The underwriter will carefully review the "Description of Professional Services" on the application (which will later be on the MI DS 00) to understand the specific advice being given. They will assess the consultant's experience, the types of contracts they use, and their risk management practices. Given the volatile nature of startups, the underwriter might suggest a higher retention or specific exclusions related to fundraising advice, which would be documented through endorsements listed on the MI DS 00.