Professional Indemnity FAQ

Floods could bring Professional Indemnity Claims

Floods could bring Professional Indemnity Claims against Brokers

How can floods bring Professional Indemnity claims? Perhaps we should start with Insurance Professionals such as Brokers who are likely to be lined up by some Insureds affected by the recent floods here in Queensland. In what way? We cannot always get flood insurance for our clients. However, we must be seen to have discussed this risk with the client. We must have this documented. We need to suggest to them they manage the risk either with a transfer if possible to an insurer, or to reduce the chance by relocating or having a catastrophe plan in place. If we fail to do this, we will be accused of breaching our professional duty by omitting to provide this advice.

If an Insured makes such an allegation, your defence includes file notes of these discussions, copies of correspondence confirming the Insured's wishes or instructions, demonstrated requests for flood insurance with insurers (where it has been requested but cannot be provided). The old CYA or CYB principal applies.
On top of this, when a client rings wanting to make a claim for flood but you have not arranged such cover, do not tell them they do not have the cover. You can tell them that they did not have specific flood cover but submit a claim anyway and have the insurer go to the effort to make the decision. The insurer has to demonstrate why the claim is not covered. It is not an Insurance Brokers job to do this. It could be that a Storm caused the flood, water may have come back up through pipes causing damage, it could be due to overflow of gutters due to heavy rain. You do not know until the claim is investigated. Deal with the decline as a Broker on the basis you must prove your loss.

Flood is often defined as inundation of normally dry land by water from any natural water course or water way. So an Insurer must prove that was the case if Flood is an exclusion.

On top of this, many ISR policies by simply not even mentioning flood automatically provides it.

Desperate people take desperate measures to blame professionals when they see a chance. It is most upsetting for a professional who has dealt with a client in absolute good faith and having a fantastic business relationship with them, suddenly level accusations against you but with good documentation, a demonstrated effort to deal with their risks and involvement of insurers in the claim, you have given yourself the best chance.

Other Flood related Professional Indemnity Claims

Previously I mentioned about the risk to us Insurance Brokers from our clients uninsured from the recent flooding here in Queensland. No doubt there will be many investigations into the damage caused to lots of property and many other Professionals could be called to account. Examples include:

  • Real Estate Agents failing to inform purchasers that the area has been know to flood.
  • Solicitors and Conveyancers - failing to act on the instructions regarding approriate flood searches for the area
  • Engineers - were supposed to design certain infrastructure to cope with certain levels of flooding
  • Councils - for approving property development into potential flood regions
  • Property developers - for developing in areas known to flood and not dealing with the potential with appropriate infrastructure.
  • Architects - not designing buildings to cope with flood events

These are just some examples. Human beings are not all that forgiving and if the opportunity arises to be compensated where they are unable to by other means like their own insurance policy, they may look for other ways. We are living in an increasingly litigious society.

 

 

Latest News

CPR joins Ausure

We would like to announce to all our Clients, Prospective Clients, Suppliers and Insurers, that Cooper Professional Risks Pty Ltd trading as CPR Insurance Services, will be leaving National Adviser Services Pty Ltd (NAS) and joining Ausure Pty Ltd as a Corporate Authorised Representative from 5 March 2018.

Fundamentally, there is no difference to you, except our Invoices will look a little different, and the Banking details will be in a different name and account number. Everything else at CPR stays the same.

There are a number of reasons we have made this decision, but the primary reason is for what we believe is best for our clients.

read more

Special offer to CPR Insurance clients

Employsure are providing a FREE Business Health Check to all our clients and gives you the opportunity to receive an analysis of the health and safety requirements in your workplace. Also. Employsure  will review your employment agreements as well as your wage rates helping you to avoid workplace claims.

Ordinarily this would cost you at least $1,250 but because you are a CPR Insurance client, it is free!

It involves the following review for you.

SAFECHECK

A specialist Work Health and Safety Consultant will visit your workplace and carry out:

A review of your business’ current work health and safety policies, procedures and systems to identify areas of concern or non-compliance

Following the review, you will receive a report summarising the findings and the health and safety

Status of your workplace

WAGE CHECK

A Wages Adviser will review your rates of pay and produce a Wage Check report.

The review will be conducted against the industrial instrument applicable

A report will be supplied advising if the wages are compliant and what steps to take to achieve compliance

CONTRACT REVIEW

A Document Consultant will review an employment agreement and provide recommendations.

The review will highlight compliance issues with the Fair Work Act 2009 as well as best practice

The report will make recommendations to achieve compliance and provide protection to your business.

This will remove any areas of potential dispute and risk

So what do you have to lose? Contact us on 07 3123 1137 and arrange 

read more