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 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.

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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 

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