Compulsory Professional Liability Insurance in Estonia and Russia: A Comparative Overview from an Insurance Law Attorney’s Perspective

January 1, 2019 News

The article titled “Theoretical and Practical Problems of Obligatory Professional Liability Insurance: A Comparative Analysis on the Basis of the Russian and Estonian Laws” was published in 2020 in the Journal of Foreign Legislation and Comparative Law. The authors are Olavi-Jüri Luik (insurance law attorney, Estonia) and Maxim Kratenko (law professor, Russia). This comprehensive legal study explores both theoretical and practical aspects of compulsory professional liability insurance within the legal environments of two neighboring countries – Estonia and Russia. 

Why Has Professional Liability Insurance Become Compulsory? 

The article highlights that several professions — such as lawyers, notaries, bankruptcy trustees, and insurance brokers — operate in fields where even minor mistakes can cause significant harm to third parties. As a result, many countries now mandate that such professionals carry professional liability insurance. 

Although private law is grounded in the principle of freedom of contract, state intervention is justified by the need to protect the financial interests of third parties and prevent the insolvency of the tortfeasor. This type of intervention is not merely a safeguard for the individual but serves a broader public interest. 

Scope of Compulsory Insurance in Estonia and Russia 

In Estonia, professional liability insurance is mandated by multiple laws — for instance, the Bar Association Act, the Notaries Act, and the Bankruptcy Act. Disputes involving insurance brokers are especially common, where breaches or negligence have led to clients being left without critical compensation. 

In Russia, compulsory professional liability insurance is mainly limited to notaries, appraisers, and bankruptcy trustees. In other sectors, such as healthcare or legal services, insurance remains optional and thus is less prevalent — largely due to limited public awareness and the perception that damage claims are rare. 

What Constitutes an Insured Event? 

One of the most crucial questions in professional liability insurance is determining what qualifies as an insured event. The article analyzes four main types of triggers: 

• Occurrence trigger – the damage occurred during the insurance period. 
• Claims made trigger – the claim is filed during the insurance period. 
• Act committed trigger – the act (e.g., error or omission) that caused the damage occurred during the insurance period. 
• Manifestation trigger – the damage became known during the insurance period. 

In Estonia, the “act committed” trigger is the most widely used. However, problems arise when insurers use different types of triggers in successive contracts — for example, if one uses a “claims made” trigger and another uses “act committed,” gaps in coverage may result. 

For this reason, the authors recommend that the legislator explicitly define which trigger should apply to compulsory insurance. 

Is Intentional Damage Insurable? 

Although general insurance law excludes indemnification for intentional damage, this principle is not always applied strictly in compulsory insurance. In Estonia, for example, third-party liability insurance for motor vehicles compensates the victim even when damage is caused intentionally. In such cases, the insurer retains the right of recourse against the insured party. 

The authors argue that the same logic should apply to professional liability insurance: intentional harm should be compensable from the victim’s perspective, and insurers should then be allowed to pursue recourse from the policyholder. 

What Happens if No Compulsory Insurance Is Concluded? 

While Estonian law includes several statutes mandating professional liability insurance, it does not clearly state what happens if such a policy is not concluded or is invalid. According to the authors, professional organizations (e.g., the Bar Association) should be obligated to verify that valid insurance is in place and suspend the professional’s right to operate if it is not. Otherwise, these organizations could potentially be held liable for damages under the principle of subsidiarity. 

Conclusion 

The article concludes that compulsory professional liability insurance is a justified and necessary measure to ensure compensation for third-party damages and to maintain the solvency of those who cause harm. A comparative analysis of Estonian and Russian law highlights several key legal and practical differences — such as the definition of insured events, treatment of intentional damage, and consequences of failing to conclude an insurance contract. 

From an insurance law attorney’s perspective, Estonia’s legal framework for compulsory insurance needs clearer regulation and more robust oversight. Nonetheless, this mechanism holds significant potential to build public trust in legal, healthcare, and financial services — and to provide victims with truly effective protection.