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

Robert Cooper - one of 100 faces of small business

This week it was announced as part of Small Business Week,  that Robert has been named one of the 100 faces of small business for a State Government promotion on the great value that small businesses play in the State of Queensland.

You can see Robert's entry here:

It is the third accolade for CPR Insurance Services in a month and after seven and a half years in business is a real pep up for the company.

For Robert, it is the culmination of many years experience, becoming well qualified, experiencing the highs and lows of a career and always wanting to contribute to his community. Sometimes, these things just come together and you receive recognition for your efforts.

Robert says that there is no doubt that starting your own business is a huge challenge, but with the right research and planning, the right people around you and a good set of values that you apply to the vision of the company, you have a very good chance of making it all succeed.

Robert says he is lucky. He has a strong supportive Wife, Mandy, who is also part of the business, along with efficient and hard working staff such as Julia McLauchlan and Aidan Harmer who are building up their own skills in a learning environment. 

However, the most important and most supportive people for CPR Insurance Services are our clients who have stuck by us and supported us over the past seven years. Our focus remains on providing the best possible service we can and always acting in their best interests. To all our clients, we say thank you!

read more

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.

read more