Professional Indemnity FAQ

Glossary of Terms

APRA: the Australian Prudential Regulatory Authority.

Circumstance notification clause: where an insured notifies the insurer of circumstances (during the period the policy is in force) that might give rise to a claim against the insured.
Following the introduction of the ICA, the failure to include a notification provision would result in one being imposed by subsection 40(3) anyway (see also ‘deeming clause’).

‘Claims made’ policies: a type of liability insurance policy in which the trigger of coverage is not the occurrence of a loss, but the making of a claim in respect of that loss by a third party, upon the insured. This means that an insurer indemnifies the insured against claims made during a policy year, notwithstanding that the negligent act, error or omission may have
occurred before the policy came into force and the actual claim might be made after the policy expires. (see ‘Long tail’ claims).

‘Claims made and notified’ policies: a type of claims made liability insurance in which notification during the period of cover is required under a circumstance notification requirement in the operative clause so that cover under the policy only arises for claims made upon the insured and notified to the insurer during the term of the cover. (see also ‘circumstance notification’ clause).

Conditions: the rules that the parties to the contract agree to follow in relation to the operation of the contract.

Deeming clause: a clause any claim which is subsequently made arising out of those circumstances is deemed to have been made at the time of the notification or during the policy period.

IBNR: the acronym for the insurer’s estimate of its liability for ‘incurred but not reported’ claims. IBNR’s are theoretically better controlled under the professional indemnity claims made and notified policy format that under the occurrence–based insurance policy.

Liability insurance: a policy indemnifying an insured for civil liability exposures from third party claims of loss. Exposures are often ‘long tail’ whilst liability insurance policies can be in a ‘claims made’/‘claims made and notified’ format (eg. professional indemnity, product liability, Directors and Officers insurance) or an occurrence-based format (eg. public liability).

Long tail: the description given to the nature of the risk in respect of an unknown number of claims which might be made many years after the actual occurrence that gives rise to the claim.

Occurrence-based insurance: common to certain types of liability insurance (eg. public liability) and property insurance policies where the trigger for liability is an insured event or occurrence that occurs during the period of the policy irrespective of when a claim is ultimately made.

Operative Clause: Sets out in very broad terms the cover provided by the policy. This cover is then narrowed subsequently be the exclusions (also known as an ‘insuring clause’).

Professional indemnity insurance: a liability insurance policy that indemnifies the insured for civil liability cover for members of a profession arising from the conduct of insured’s professional business practice. (usually written as a ‘claims made and notified’ policy).

Retroactive date: refers to the earliest date on which an event could occur that would attach coverage of an insurance policy before a claim will be covered under the policy 

Latest News

CPR Insurance wins Brokerage of the year

CPR Insurance Services picked up the award for the Best Brokerage (1-5 staff) in Australia, last Friday Night (4th May 2018) at the Insurance Business Magazine Awards held at the Westin in Sydney.

Judging came from various parts of the industry. It is a great honour to be recognised for our hard work and particular Business values we follow. A full list of winners is listed here.

Success comes from having great staff, and we thank Aidan Harmer and Julia McLauchlan as important support staff for helping us win such an award.

CPR Insurance has been in operation for more than 7 years now and is only successful because of the wonderful support from our staff, insurers and most importantly, our fantastic clients who put their faith and trust into our company to be their Risk Advisers and Brokers. 

Thank you to all.

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Robert Cooper - Elite Broker again

We are pleased to announce that once again Insurance Business Magazine has recognised Robert Cooper amongst the top Elite Insurance Brokers in Australia. See here

It is the fourth time in six years Robert has received this honour.

It is a great recognition for CPR Insurance Services who strive to provide the best possible standard of customer care and service to assist obtaining the best possible cover at the best possible price to meet the needs of for our clients.

Such awards are not possible without the outstanding support provided in the office by Julia, Aidan and Mandy, along with the fantastic support our clients continue to show to us. Thank you to all.

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