ASUM will no longer be offering Professional Indemnity Insurance as of 1 July 2018. Insurance options have become more complex and members should seek further information on their own personal requirements based on their clinical practice.
“As a policyholder under the Aon arranged CGU Insurance Group Professional Indemnity Insurance and Group Public & Products Liability Insurance Policies for 2017/2018, you will by now have received notification that this facility will cease to be available from the expiry date noted on your policy document. When exploring the availability of alternative insurance arrangements, there are several factors that need to be considered.
To begin, it is key to understanding how Professional Indemnity and Public / Product Liability policies operate and the steps you must take to reduce the risk of an uninsured loss. This bears relevance under both current and future insurance policies held by you.
Professional Indemnity insurance is typically a ‘claims made’ policy, designed to meet claims that are both made and reported during the policy period. This makes it vitally important that you notify your insurer in writing immediately you become aware of any claim or any fact or circumstance, which could give rise to a claim. Failure to notify within the policy period may result in a claim being denied.
Where your Professional Indemnity remains with the same insurer for consecutive insurance periods, a safety blanket of sorts may exist if the policy includes a ‘continuous cover’ extension, thus allowing for a notification in a later period, subject to the policy terms and conditions. A change of insurer will, however, sever the continuous cover. The new insurer will exclude cover for any ‘known claims and circumstances’, regardless of whether they were notified to the previous insurer or not. This further increases the importance of notifying your current insurer, during the current policy period, of any claim or any fact or circumstance, which could give rise to a claim. Meridian Lawyers have an excellent example of how a policy holder can be caught without insurance, despite holding continuous insurance over a time frame in which a claim occurred – https://www.meridianlawyers.com.au/insights/brand-loyalty-professional-indemnity-insurance-risks-shifting-insurance-cover/
Public & Products Liability insurance policies typically operate on a ‘claims occurring’ basis, meeting claims that occur within the policy period, regardless of when the claim is made. The distinction between ‘claims made’ and ‘claims occurring’ can carry great significance depending on when the claim occurs, when the policyholder becomes aware of the claim, facts or circumstances that may give rise to a claim and when the insurer is notified.
Having given regard to your current policy and insurer, our thoughts now need to turn to future insurance arrangements. As part of this process, key items to consider include: –
- Determining just what type(s) of insurance is required. Is it Professional Indemnity alone, or do you also require Public and Products Liability? Speak with your employer and review your contracts. Seeking to mirror the insurance arrangements currently in place may be a missed opportunity to ensuring the policies held are appropriate for your individual needs.
- The policy terms, conditions, limits and deductible that are offered by prospective insurers – how do they differ to your current policy and is there any deterioration in cover or benefits?
- Does the Professional Indemnity policy offer an unlimited retroactive date (the retroactive date defines the period from which the professional services would be covered by the policy – this is not to be confused with the period of insurance).
- Are the correct insured details noted? For example, as a contractor, is your company named on the policy?
- Ensuring that you meet your duty, under the Insurance Contracts Act 1984 to disclose to the Insurer every matter that you know or could reasonably be expected to know, is relevant to the Insurers’ decision whether to accept the risk of
When it comes to insurance, particularly in the Professional Indemnity and Public / Products Liability space, no two products are the same. Whilst cost is important, the devil is in the detail. Should a claim situation arise, you want the reassurance that comes with having purchased an insurance product where you understand the coverage, limitations and exclusions. By starting this process as early as possible, you give yourself the best possible chance to research the market and make an informed insurance decision.
Important note – the information provided here is general advice only and has been prepared without taking in account your objectives, financial situation or needs. Watkins Insurance Brokers Pty Ltd (ABN 23 059 370 455, AFSL 244427)”