FAQs
Professional Risks
What is retroactive cover?
An insurer will either offer unlimited retroactive cover which provides indemnity for any claim or costs irrespective of when the act, error or omission giving rise to the claim occurred. Alternatively, insurers may limit cover to a specific date meaning indemnity will only be provided for any claim or costs where the act, error or omission giving rise to the claim occurred after the retroactive date stated in the policy schedule. If you are taking out insurance for the first time, the insurer may specify the retroactive date to be the date that the policy incepts.
What is a claims made and notified policy?
A ‘claims made and notified’ policy means that the policy/insurer that will respond to any notification or claim, is the policy/insurer in place at the time the claim is made against the insured regardless of whether the claim relates to activities performed in a previous policy period. This is in contrast to an ‘occurrence based policy’ where the policy/insurer that responds to the claim, is the policy/insurer in place at the time the activities relating to the claim was performed.
How do I obtain a quotation?
Insurers will require a proposal form completed, a copy of which can be sent to you via email, fax or post upon request. Quotation terms are usually valid for 30 days.
Do I have to buy the insurance separately?
All professional risk policies can be purchased as a stand alone policy. There are also various policies available that package some or all of the risks into one policy. Cover varies from policy to policy.
What happens if I do not renew my Professional Risk type insurance policy/s?
Without a current policy you will be uninsured for all new claims that are made against your practice, even if you had insurance in place at the time the event giving rise to the potential claim occurred. For this reason, it is important to continue to renew your insurance policy each year and take into consideration the ongoing cost of this insurance when first purchasing this product. Should you cease to trade it is important to consider run-off cover for as long as commercially viable.
What is run-off cover?
Run off cover is a policy that continues to protect your exposure after you have ceased practicing. Generally you can purchase run off cover 12 months at a time or in bulk for say 3, 5 or 7 years. The multi year products generally offer premium savings when compared to an annual policy for the same time frame.
What is a certificate of currency and how do I get one?
A certificate of currency is a summary of your insurance cover. It is a document that is used to show external parties (often clients etc) that you have insurance in place. You can contact us at any time to obtain a certificate of currency and provided the policy has been paid for one will be issued. As this document is issued by the Insurer, please allow us a couple of days to arrange it.
Professional Indemnity Insurance
What is Professional Indemnity (PI) insurance?
PI insurance is intended to protect a professional if sued for a financial loss resulting from their advice and/or services. Anyone who gives another person advice and/or services of a skilful character according to an established discipline might be regarded as a professional.
Do I need PI insurance?
PI insurance is compulsory for some professionals and elective for others. Either way we highly recommend that you consider this insurance for your business. You may also find that it is a requirement of most of your clients that you hold PI insurance.
What types of claims commonly arise?
This will vary from one profession to the next but all professionals are expected to possess a standard of expertise. If you fail to exercise or achieve that level of expertise in the performance of your role, and as a result, loss or damage is sustained to other parties, there is every prospect that legal action will be brought against you seeking financial compensation by way of damages for any loss which results from your breach of professional duty.
Directors and Officers Insurance
What is Directors and Officers (D&O)insurance?
A D&O policy is designed to protect the personal assets of directors or officers by providing indemnity for any loss arising from a claim as a result of a ‘wrongful act’ (as defined in the policy) committed while they are carrying out their duties and obligations in their position as a director or officer.
Do I need to consider D&O insurance?
Directors and officers of companies can be held liable for their own actions as well as the actions of others and are subject to increasing regulation and scrutiny. It is important to remember that even if the director or officer is innocent, the defence costs of a D&O claim can put personal assets at risk.
What types of claims commonly arise?
Claims against directors and officers fall into the following categories:
Shareholders alleging that the director or officer mismanaged the operations of the company and its funds.
Regulatory authorities holding directors and officers personally liable for breaches of legislation. For example the Australian Securities and Investments Commission can take action against directors and officers it believes have breached the Corporations Act, or the Australian Competition and Consumer Commission can bring actions against executives they believe have participated in restrictive trade practices such as price fixing.
Creditors alleging that the director or officer allowed the company to trade whilst knowing it could not pay its debts.
Competitors bringing actions against executives for defamation, infringement of patent or copyright and the numerous areas within restrictive trade practices (e.g. price fixing, collusive conduct, predatory pricing etc).
Employment Practices Liability Insurance
What is Employment Practice's Liability (EPL) insurance?
EPL is designed to assist employers to reduce the cost exposure and business stress associated with employees taking action against them for claims such as alleged discrimination, harassment and unfair dismissal.
What type of claims commonly arise?
Harassment claims are the most frequent with sexual harassment topping the list. Unfair dismissal and discrimination claims are also common.
What coverage will an EPL policy provide?
Not even the best human resources practices can prevent claims. An EPL can provide such coverage as:
o Wrongful refusal to employ a potential employee
o Wrongful failure to promote an employee
o Wrongful demotion, negligent evaluation, negligent reassignment or negligent disciplinary action
o Wrongful dismissal of any employee
o Workplace harassment (sexual or otherwise) of an employee
o Unlawful discrimination
Statutory Liability Insurance
What is Statutory Liability (SL) insurance?
Statutory Liability provides protection against fines or penalties arising out of breaches of Acts of Parliament, plus the legal costs accrued in defending the prosecution.
What types of claims commonly arise?
Breaches of OH & S and Environmental Protection laws are the more common claims for consultants.
What coverage will a SL policy provide?
These policies provide protection for the monetary cost of fines and penalties arising out of breaches of legislation. In addition these policies cover the legal costs associated with defending the action brought by the government or government authorities.
