These product descriptions are summaries only. Cover is subject to the terms and conditions of each policy.
- Professional Indemnity (PI) Insurance
- Directors’ and Officers’ (D&O) Liability Insurance
- Prospectus Liability (IPO) Insurance
- Investment Managers’ Insurance (IMI)
- Medical Malpractice Insurance
- Information Technology (IT) Liability Insurance
- Crime Insurance
- Employment Practices Liability (EPL) Insurance
Professional Indemnity (PI) Insurance
Professional service providers (PSPs) owe legal duties to clients and other third parties in conducting their business.
Professional indemnity (PI) insurance covers PSPs for claims against them for compensation for loss caused by a breach of the PSPs’ professional duties.
Policies can cover individuals or a corporation and its directors and employees.
A PI policy typically covers damages, third party legal costs and defence costs.
Whilst PI insurance is generally procured by the more traditional professions such as financial service providers, architects, engineers and lawyers, any party who is providing advice and/or service of a skilful nature according to an established discipline may have an exposure and should be considering their need for this type of cover.
Directors’ and Officers’ (D&O) Liability Insurance
Directors or officers of a corporation are exposed to personal financial liability in relation to any claim which might be brought against them in connection with the discharge of their duties in that capacity. These duties are numerous and may arise from statute (e.g. the Corporations Act) or common law.
Shareholders, employees, customers, suppliers and regulatory bodies are all a potential source of legal action. The personal assets of a director or officer may be at risk in such circumstances.
D&O insurance covers past, present and future directors and officers for claims against them for wrongful acts in their capacity as directors or officers.
D&O insurance typically covers damages, third party legal costs and defence costs.
Prospectus Liability (IPO) Insurance
Prospectus liability insurance (often referred to as IPO insurance) offers long term protection to the corporation and its directors against exposures arising from a listing or the issue of a product disclosure statement.
Policies can be effected for up to seven years from the date of lodgement of the offer document, and once the premium is paid, cannot be cancelled.
A central aspect of IPO insurance is continuous protection for the full period of insurance chosen, thus eliminating the potential difficulties associated with an annual renewal should a claim arise.
Investment Managers’ Insurance (IMI)
Investment managers are confronted with a wide range of risks in the conduct of their business, ranging from claims for the loss of fund assets through negligence, to loss as a result of fraud.
In the case of a managed investment scheme, liability to the scheme members rests with the responsible entity, even if caused by the negligence of an agent.
Officers, employees and compliance committee members all have duties, a breach of which exposes them to the prospect of claims.
Investment managers insurance (IMI) is a composite insurance policy which addresses these exposures by incorporating cover for:
- professional indemnity insurance;
- directors’ and officers’ liability insurance; and
- crime insurance.
IMI cover is also designed to satisfy regulatory requirements that a responsible entity must maintain appropriate insurance protection against fraud of its officers.
Medical Malpractice Insurance
Medical malpractice insurance provides cover for claims against healthcare institutions and professionals for legal liability for a breach of professional duty in the conduct of the healthcare practice.
Hospitals, clinics, ambulance companies, pathology laboratories, diagnostic companies, respite centres, aged-care homes, telephone counselling services and medical employment agencies are examples of healthcare providers for which medical malpractice insurance is designed.
Legal liability for third party death, bodily injury, mental injury, illness or disease caused by breach of professional duty is addressed by a medical malpractice policy.
Medical Malpractice insurance will typically cover damages, third party legal costs and defence costs.
Information and Communication Technology (ICT) Liability Insurance
ICT Liability insurance provides coverage for claims arising from failure of the insured’s products, services and/or advice. Cover can also include infringement of intellectual property rights, defamation or breach of confidentiality, loss of documents/data and defence costs for breach of contract.
Because of the nature of IT services there can be uncertainty as to whether a claim should fall under a public/product liability policy, which covers third party claims for property damage and personal injury, or a professional indemnity policy, which covers third party claims for financial loss.
If the policies are placed separate and, particularly, if they are placed with different insurers, a claim could potentially fall between the two policies. It is therefore desirable for these exposures to be covered under one policy, which is what ICT liability insurance has been designed to address.
An ICT liability insurance policy typically covers damages, third party legal costs and defence costs.
Crime insurance covers financial loss which the insured has sustained directly as a result of dishonest or fraudulent acts of any person.
A crime policy has several optional sections, which depend on the exposures a business wishes to insure. The primary section is the fidelity section, which covers direct loss arising out of the dishonest or fraudulent acts of employees of the insured corporation.
Cover for direct financial loss resulting from computer related crime is also available under a crime policy, in addition to cover for a broad range of exposures which financial institutions and financial service providers might need to insure.
Employment Practices Liability (EPL) Insurance
Employment practices liability (EPL) insurance covers the insured company, its management and employees against claims for wrongful employment practices.
This insurance covers the corporation, which is invariably the primary target, for such claims. By way of comparison, a directors’ and officers’ (D&O) policy covers claims against individual directors and officers for their legal liability for wrongful employment practices, but, unless specifically extended to do so, does not cover claims against the corporation itself.
Wrongful employment practices include:
- wrongful or unfair dismissal
- misleading representation or advertising relating to employment
- invasion of privacy and
- employment-related defamation
EPL insurance covers damages, third party legal costs and defence costs.