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AAIB Est. 1997

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If you are providing advice or service for a fee, you know that despite your best efforts, there will still be times when errors and omissions occur. When they do, it will usually lead to extremely expensive and stressful claims.  More importantly, common general liabilities insurance do not cover claims arising from such mistakes. 

What type of coverage can you get?

		Unlike other commercial insurance, Professional Indemnity insurance covers you for claims that you become aware of, not that actually happened, during the policy period. The policy will respond as far back as its retroactive date specified.
		Error, omission, or negligence in providing a service.
		Failure to provide a service.
		Civil Liability
		Misrepresentation and/or Nondisclosure
		Breach of Confidentiality
		Defamation
		Infringement of intellectual properties
		Infringement of such laws as Trade Practices Act, Fair Trading Act and Privacy Act
		Claim Investigation
		Defence Costs

Professional Indemnity (PI) insurance is not a luxury

		You may not think your business is a “professional”. But if your business:
		provides advice or service for a fee; or
		have clients who bundle your services into their products or services; or
		enters into agreements to indemnify your clients then only a Professional Indemnity insurance will cover you.
		PI exposure can be much broader than you think. e.g. you designed a circuitry which was used by a global company in their product. Hundreds of thousands of that product were sold worldwide. Later it was found that there was a fault in that circuitry. Any damage caused by the fault can be claimed against you - the designer.

What is this "Claims Made" basis about Professional Indemnity policies?

		"Claims Made" basis means it covers you for claims made against you and which you notified to your insurer during the Period of Insurance. The actual mistake causing the claim can occur at any time in the past (as long as it is later than the retroactive date). This is an important feature because in providing professional services/advice, e.g. the result of a fault in the design of a bridge may not become known until quite some time after the design was made.
		"Occurrence" basis, which applies to most other properties insurance, will cover you for claims arising from events that occurred during the Period of Insurance. Usually the insurer does not require you to notify them within the Period of Insurance.

Does your policy include a Civil Liability wording?

With a Civil Liability wording you will be covered for claims arising from strict liability, where no negligence is involved.

Why can’t I just discontinue my Professional Indemnity insurance after I have sold my business?

If you sell your business, a claim as a result of mistakes made whilst you still owned your business can still arrive at your door. Without a run-off PI policy, you will not be covered. In other words, it is crucial not to leave any gap of cover if you are in the business of giving advice and service for a fee.

Common exclusions and limitations

Dishonest, fraudulent, criminal or malicious acts by your employee or yourself are not covered by most PI insurancE.

Call AAIB today:
           02-9904 7888       Email:info@aaib.com.au