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Allianz Insurance – CEO Interview

On March 10 of this year, news broke that Niran Peiris, managing director of Allianz Australia, has been appointed to the board of management of the global Allianz Group, effective from 1 January 2018.

It was announced that Peiris, who has been with Allianz Australia for 16 years, will assume responsibility for the property and casualty businesses in the group’s Anglo markets (which include Australia and New Zealand), the Global Insurance Lines (for example, Allianz Global Corporate and Specialty), Russia and the group’s commitment to environment, social and governance. According to Allianz, work has commenced appointing his successor in Australia, with Peiris to continue in his current role until the end of the year.

Insurance Business Magazine had the good fortune to meet Peiris in his Sydney office to discuss Allianz Australia’s recent progress. Reflecting on major wins for the business, he cites the 2014 acquisition of the general insurance business of the Territory Insurance Office from the Northern Territory government, as well as Allianz’s partnership with Westpac General Insurance in 2015, under which the bank began sourcing products from the insurance giant.

Additionally, Peiris mentions the opening of the South Australian CTP market, at which time Allianz became one of four CTP insurance providers in the state.

He also discusses the biggest challenges the business is facing in the Australian market right now. He refers firstly to the soft state of the commercial market.

“While it’s recovering, I don’t see it recovering quickly, and I think that’s an indicator of capacity that we have around the world,” he says.

“Secondly, I think low interest rates continue to be challenging for any financial services organisation, particularly general insurers because you’ve got to price to your interest rates, and when interest rates are very low, of course, your price has to be much higher than you otherwise would have.

“I think that’s a pressure on us all, and we don’t see interest rates moving up dramatically in the near future, and so that pricing pressure will remain.”

The regulatory landscape is also an important factor to Peiris.

“I think the move of regulators, particularly towards customer advocacy, is a big change and something that I think the whole financial services industry is adapting to at the moment,” he says.


Tomorrow’s industry

Talking talent in insurance, Peiris opines the industry needs to do a far greater job of making jobseekers appreciate the intellectual challenge associated with careers in insurance.

“The intellectual challenge is trying to price something that you really don’t know the cost of,” he explains.

“You’re taking very educated guesses at that cost. There are very few industries like ours, where you really don’t know the cost of your product on the day you sell it, because it’s subject to weather events or whatever that you’re trying to cover. And I’ve found that quite stimulating over time.

“If you think about … a message to people who are smart, young [and] motivated who might be attracted into the industry, rather than have them fall in, try to show them that [challenge]. I think that’s something that we’ve been trying to do more of through, particularly, our graduate induction program, going out to campuses and showing people that, but also generally through our employee value proposition, to try and help people understand that there are exciting, rewarding careers with interesting jobs, now particularly around data, that will attract young people.”

On the subject of data, Peiris talks about the evolving role he foresees for data and analytics in insurance in times ahead.

“Insurers have been using data for a long time to rate properly. The thing that I think has to change is more customer overlay on top of that data, because the data that we use at the moment really is portfolio by portfolio, and we look deeply down into those portfolios and we’re trying to balance the pool that we have,” he says.

“I think we can get better customer data that enables a better rating and risk selection, and then, secondly, better customer data to make sure that we’re offering them the right thing at the right time – both of which I think the insurance industry is developing.”


Investing in the future

Peiris says Allianz has a significant focus on data and analytics, both at a local and at a global level.

“We’ve invested quite heavily in data science, in machine learning and all those things that you need to do to be a big data company, going forward,” he says.

Discussion turns to insurtech and the associated threats and opportunities.

“I think as with any new competition emerging from left field, you must always pay attention to them, because what emerges from left field is always something that can be a major threat to you in years to come,” he says.

“In engaging, what we need to continue to be good at is risk selection and pricing, and the investments in that side of insurtech are very interesting to us. We’ve invested significantly at a global level and here in data scientists and in analytical tools so that we can better refine our rating models.

“I think, also, engaging with insurtech is important and our Allianz global colleagues certainly have investments with various insurtech companies.”

On other recent developments in Allianz Australia, Peiris discusses its enhanced commercial packages online platform.

“We’ve launched our SME platform, Allianz Alive, which went live towards the back end of last year and is now fully up and running … [it’s] a major refresh of our SME offering – which is very important to brokers and really important to us … and we continue to refine that as time goes on and innovate further,” he says.

“If we look at our tailored solutions business – again, a big strategic push of ours – we’ve restructured our entire team behind the scenes here so that we have a very focused underwriting capability and distribution capability for risk underwritten business, offer and acceptance business that isn’t SME and is smaller than big-end corporate stuff that we’re doing. And then, finally, when we look into rural and regional as well, we have a significant push into farm, and the farm pack offering will commence towards the back end of this year, which is a fully automated farm offering, which will be part of the overall strategic fit with us for rural and regional.”


A diverse workforce

Inside the organisation, Allianz Australia’s efforts to enhance the diversity of its workforce have been recognised externally for some time.

In December, its ongoing work to improve gender diversity in the business was acknowledged for the eighth consecutive year by the Workplace Gender Equality Agency, which awarded Allianz an employer of choice
for gender equality citation. Allianz was one of only two general insurers to receive this acknowledgment.

“Diversity is strategically important to us, because we’ve said for a long time it’s just good for business. It helps us think more broadly and to understand our customers better if we are a more diverse bunch inside this company,” Peiris says.

He says diversity has been a focus of the business during his time as head of Allianz Australia.

“Through that focus, we try to then encourage the drivers of diversity, whether it be through selection, training and development of our people, or things like flexible working conditions.”

Peiris emphasises the importance of accountability for efforts on the diversity front.

“I think it’s really important that you hold yourself accountable,” he says.

“We’ve set up targets internally. They’re aspirational, but we basically say we want to achieve a certain level of female representation in senior management ranks by 2020, and we’ve been working our way through to that and I’m quite pleased with the progress we’re making at the moment.”

People change, Peiris says, is the biggest change happening internally at Allianz Australia.

“When you look at our organisation and how we grew up, necessarily we were quite a traditional hierarchical system. As we grow – we’re now $4.6bn in turnover in terms of GWP – our aspiration is to be much bigger still. You need to change the way the company goes about doing its business and you need to devolve decision-making.

“For that, we’ve got a strategy around a workforce for 2020, which looks at how we recruit people and the types of people we’re recruiting, and that’s where diversity comes into it as well. Secondly, [we’re looking at] how we get them through the organisation, in terms of their development, and, thirdly, how we then get them into those senior management roles that are necessary in a diverse talent base that recognises the challenges of the future.

“We say we would like to have the best workforce that’s able to deal with all those challenges in the future, and have the right skills and capability to achieve it.”

Peiris continues: “That, I think, is a huge change … you can always do a project, but cultural change takes a lot of effort and it’s something I personally lead. I think it’s something that we need to have necessarily in order to have different ways of making decisions that aren’t reliant on hierarchy.”

The year ahead

Key priorities for Allianz Australia in 2017 – Peiris’ last year as MD – centre around the continued execution of its strategic plan.

“We had a strategy approved in 2015, and year one of implementation was 2016,” Peiris says.

“The plan really focuses on a few things: firstly, what I would call a focus on the end customer. We have previously always looked at our intermediary partners as the way we grew, so we acquired intermediaries and we grew that way, and as a result … we have significant market shares in motor car dealers and [financial institutions].” But we really haven’t focused on their end customer base. A lot of the work that’s going on in systems and in process is to look at how we get to the end customers together with our partners – or indeed the end customers directly when we have our direct business – and look at them in a way that we understand them better and, therefore, they’re more likely to buy more product from us and/or stay with us for longer.

“A lot of work is going into that. It’s a threeyear program, and implementation will take some time to carry through. As I said, we’re one year into that three-year program and so far, so good.”

Article Reproduced from Insurance Business

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100 Insurance & Business Articles to Enjoy

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Building Cladding & Fire Risk

Insurers back national cladding probe after UK disaster


Australian insurers are backing a national survey of buildings using flammable cladding in the wake of the devastating blaze that killed at least 58 people in London’s Grenfell Tower.

Experts have warned the disaster could be replicated in Australia, and the Insurance Council of Australia (ICA) says a national survey is needed “before tragedy occurs”.

Witnesses say last week’s fire in the inner-London suburb of Kensington raced up the tower block’s exterior, fuelled by combustible cladding that was added to the 1970s structure last year.

The cladding is thought to be similar to that blamed for the rapid spread of a major blaze at the Lacrosse apartments in Melbourne’s Docklands in 2014.

Victorian Planning Minister Richard Wynne moved last week to reassure residents that Australia’s strong building codes mean a similar tragedy would not occur here.

But experts disagree, saying the prevalence of flammable cladding here remains a serious threat to life.

Following the Lacrosse fire, the Victorian Building Authority (VBA) audited 170 Melbourne CBD buildings and found 51% featured non-compliant cladding.

Many of these buildings were deemed safe to occupy, and even the Lacrosse building retains its original cladding as legal arguments continue over who should pay to remove it.

The number of buildings with such cladding in other cities – including Sydney – is unknown, although an audit of Adelaide buildings has been announced since the Grenfell disaster.

One of the arguments in Australia’s favour is that buildings more than 25 metres tall must have sprinkler systems installed.

The 24-storey, 70-metre Grenfell Tower, which was insured by Norwegian insurer Protector Forsikring, had no sprinklers and only one stairway exit for 120 homes.

But FM Global Australian Operations Chief Engineer Andre Mierzwa advises that while sprinkler systems are a huge benefit, “they can be overtaxed”.

“I took a walk down the [Melbourne] Docklands and at least 50% of buildings have this [combustible cladding] on them,” he said.

“We still need to have a close look at these buildings, and we are not out of the woods yet for a similar sort of fire.”

FM Global, which deals only in the commercial space, carries out its own testing of materials and risk assessments.

But Mr Mierzwa believes most insurers of residential apartments would not know which type of cladding has been used on buildings.

“They would have to do a lot of digging to find out what the product is,” he said.

He also believes a claim could be denied if a building is discovered following a fire to be non-compliant with the Building Code of Australia (BCA) and it can be argued the owner “deliberately withheld information”.

He believes the pressure will now be on to remove cladding in Melbourne and across the country.

“But it will cost millions and millions of dollars,” he said.

Fire Protection Association Australia CEO Scott Williams advises the London tragedy could easily be repeated here.

“The BCA is a minimum code, and when a building doesn’t reach that we have a problem,” he said.

“Any building that has this combustible cladding poses a very strong risk that what happened in London could happen here.”

He says there is a clear discipline issue within the building industry. “There is unscrupulous behaviour and substitution of product to save a few dollars.

“There needs to be greater auditing, and greater enforcement with consequences for individuals who breach the rules.”

He believes cladding could be just the tip of the iceberg.

“What about the thousands of other products going into buildings? Are we talking about widespread non-compliance, and [is] our building stock actually in a terrible condition? We just don’t know.

“We have a lot of work to do. The cladding has to come off, whatever the cost, and every building has to be compliant with the code.”

ICA spokesman Campbell Fuller says Australian insurers are “acutely aware” of the dangers of inappropriate materials and the need for strict compliance with the BCA.

“Many insurers inspect high-rise buildings prior to agreeing to underwrite them, and also rely on compliance testing carried out by certified professionals experienced in the management of fire safety codes,” he said.

“If insurers become aware of new information that alters the risk profile of a building, they may choose to reassess their premiums accordingly. Evidence that an insured building is non-compliant with building codes has the potential to complicate the claims process.

“If policyholders become aware of information that materially alters the level of risk they face, they are obliged to notify their insurer.

“Insurers would support a national approach to surveying buildings that use these products to ensure any issues can be identified and rectified by owners before tragedy occurs.”

Article reproduced from Insurance News

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Insurance Report June 2017


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Cyber Attacks Revealed

A recent survey has revealed that 90% of Australian organisations have faced some sort of cybersecurity compromise during the 2015-16 financial year, highlighting the need for cyber insurance to avoid massive financial losses from a cyber attack. The survey by the Australian Cyber Security Centre (ACSC) polled 113 organisations, 90% of which claimed to have experienced some form of attempted or successful cybersecurity compromise. Full article found in Risk Management Magazine

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Virtual Reality Shaping General Insurance

Virtual Reality (VR) could shape the future of general insurance says third party claims expert Peter Tomkins.

“Traditionally, the biggest challenge insurers face is understanding risk. Modern technology has come a long way to address this need – insurers are now using car monitors to understand driving behaviour , and Fitbits to understand a client’s health . VR is another powerful tool that an insurer can use to fill in their understanding of a risk profile,” says Tomkins, General Manager, Specialty Markets at Gallagher Bassett.

Full article found at Insurance and Risk 

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5 Business Growth Ideas

Article by Macquarie Business Banking

Statewide’s long-term banking partner Macquarie, takes a look at 5 areas to consider before you disrupt your industry

Disrupting your industry means challenging the status quo while offering something much more than change.

Disruption can come from anywhere and in this technology-filled world where everyone can access the latest information, the size of a business doesn’t necessarily reflect its ability to disrupt. Before you start you should ask yourself the following questions:

  • Who are you doing it for?
  • Do you have 100% employee/investor buy-in?
  • Are you ready to think outside the box and bigger?

With these questions in mind, and the following tips, Macquarie wants to help you realise your potential and seize the opportunities for growth.

1. Embrace the power of the idea

It’s time to relinquish the long-held belief that the most important factor, when making major changes, is the business behind you.

When you explore new opportunities it’s wise to take into account the prospects for enhancement or reinvention that may already exist and areas of your business that you could improve.

Small players can think big and, thanks to innovations such as crowdfunding, the cloud and client reach through social media, they can effect very valuable disruptions for a fraction of the cost.

2. Set new benchmarks in customer experience

The digital era means the way services are delivered to customers has fundamentally changed in almost every sector.

Take advantage of the tools at your fingertips. Identify what your customers are looking for in your industry, where they occur in the user journey and then use digital pathways to eliminate them.

Find ways to simplify, streamline and enrich the customer experience and you are likely to cement customer loyalty. It could be as straightforward as rethinking the way you communicate with your customers for follow-ups and servicing.

Take advantage of the tools at your fingertips. Identify the customer pain points in your industry, find out where they occur in the user journey and use digital pathways to eliminate them.

3. The rise of digital devices

The ever-emerging network of digital physical objects and advanced connectivity is taking communication beyond computer-to-computer interactions.

According to a market forecast from ABI Research, by 2020, the number of devices connected to the internet is expected to exceed 40 billion. And that’s just the start.

We are already seeing technology such as smart thermostat systems in washer/dryers that can facilitate remote monitoring via Wi-Fi. Soon, embedded devices, such as built-in sensors in transportation and medical equipment, will collect and autonomously transmit data between other devices.

This is the beginning of automation in nearly all industries and fields.

4. Capitalise on new technologies and collaborations

Nothing invigorates a disruption like a fresh approach.

Whether that fresh set of eyes comes in the form of emerging technology, or it’s the acquisition of new skills and experience, reaching out in this way can change ‘What if?’ to ‘Why not!’ for your business.

Think about 3D printing and the drones for B2B delivery. These technologies may enable the creation and delivery of a wide range of physical items quickly, cheaply and potentially with a reduced impact on our environment.

5. Reinvent your culture

Effective disruption cannot happen in a company culture that does not foster and celebrate innovation.

Encourage networking, transparency, the sharing of ideas and, perhaps most importantly, the ability to take strategic risks. Providing a safe space for employees to test, learn and revise is crucial to originality and improvement. Empower your people.

Planning on growing your business and disrupting your industry? 

Talk to us at Statewide to discuss your risk management needs for your business.

Professional Indemnity Analysed Part 2

Part 1

What won’t professional indemnity insurance cover?

Each policy will have its own set of exclusions whereby the insurer will not be liable to pay compensation to the insured in the event that a claim is made. Some typical exclusions listed on professional indemnity policies include:

Claims arising following cancellation of policy:

It is not unusual for many claims to be made against businesses and/or professionals a significant period of time following the provision of the service and even after they have ceased business. As many professional indemnity policies expire when they are cancelled, the policy owner may not be covered for claims made against them even if they have already retired. This can be avoided by taking out a policy with a “run off” extension discuss in the section below

Claims arising following switching insurers:

If the policyholder is covered by a policy provided by their employer and they have changed employers and switched insurers, it is unlikely that they will be covered for claims made for the business they provided with their previous employer. It is also unlikely that any compensation will be provided as the previous cover is likely to have expired. In this event it is worth the worker checking with their new insurer what provisions they have for previous claims

Known circumstances:

Generally, the insurer will not receive compensation for events that they were aware of prior to the commencement of the policy period

Professional fees:

Compensation will not be paid for any claim arising from the insured for claims by clients for fees or charges for their professional service. No refund of fees or charges from the insured will be paid by the insurer


Claims or legal costs that arise in respect of asbestos

Radioactivity and pollution:

Claims that are attributable to or are the consequence of radioactivity or pollution

Dishonest, fraudulent or criminal acts:

Claims arising where the policyholder has intentionally engaged in dishonest, fraudulent or criminal acts

Fines and penalties:

Claims arising for compensation to cover fines or penalties suffered by the insured

Directors or officers:

Liability arising from claims where the insured was acting in the capacity of the director or officer of a company or organisation


Claims made against the insured where all or part of the claim is attributed to the insolvency of the insured or their suppliers/contractors

Licensing enquiries:

Claims made against the insured for failing to be properly licensed, registered or accredited to provide their professional service

Manufacturing, efficacy, faulty workmanship:

Claims for loss arising out of poor manufacturing or faulty workmanship by the insured

Owners and occupiers liability:

Claims arising from occupation, leasing or ownership of any rental or other property

Retroactive date:

Claims for things done or that are thought are to have taken place prior to the retroactive date

Superannuation trustee:

Any claim arising from connection or conduct between the insured and a superannuation trustee

War or act of terrorism:

Any claim arising from war or terrorism regardless of any cause or event.

These are very broad definitions of some typical exclusions that may be placed on certain policies. It is essential that anyone looking to take out cover is aware of all policy exclusions and the conditions for claim payment prior to application



How much does professional indemnity insurance cost?

As with most types of protective insurance, the cost for cover to be taken out can vary dramatically depending on the insured’s cover needs. In the case of professional indemnity insurance, this will depend on whether the policy is for a sole trader or for a business looking to provide cover for a significant number of employees. While sole traders may be able to get adequate cover for just a few hundred dollars, the cost of insuring a multinational company could run into the hundreds of thousands of dollars.

Key factors that impact what you pay include:

Number of staff employed by company and annual turnover. Sole traders or companies with say 15 employees won’t require the same level of cover as large-scale organisation.

Types of clients that company/professional services. Professionals that work on large-scale,. multi-million dollar projects will require a higher level of cover than smaller firms.

Industry. The nature of the service provided and the level of risk for claims being made will impact how much is paid for cover.

Policy inclusions and exclusions. Obviously more comprehensive protection packages with increased levels of cover will cost more than more basic policies.

The cost of professional indemnity insurance is largely based on the percentage of your companies total legal spend and the likelihood of the company being taken to court. The insurer that you go with and the policy that you choose will also play a major role in the final cost of cover.

How much cover do I need?

Unfortunately there is no set answer for how much cover you should take out. Every business is different and there are different regulations in place for minimum cover required for certain professions.

Some other factors to consider that will impact what you pay for cover include:

Clause of contract. Most contracts will specify a minimum amount of cover that the worker must have in place to carry out the project.

Type of project and value. This is the correlation between the value and size of the project being undertaken and the workers exposure to claims for professional negligence

Perceived exposures. Assessment of possible causes of loss, injury or damage that may lead to a claim being brought against you.

Number of parties relying on advice. If the nature of the project means that advice will be passed onto more than one party, the worker may be liable for claims from other parties affected.

Cost of defending a claim. Some policies will have an additional limit applied for the actual cost of defending a claim. Lengthy court cases can quickly run into the tens if not hundreds of thousands of dollars.

Willingness to carry risk. This requires the worker to assess how much of the risk they are willing to carry themselves with a lower policy limit or by transferring the risk to other parties.

Cover for previous claims. Professional Indemnity Insurance is of a “Claims Made Basis” . This means that cover can apply for claims made against the worker for previous activities. With this in mind it’s important to consider the potential value of claims in the future following inflation.

Determining an appropriate level of cover is no easy task. It’s worth taking the time to speak with an experienced broker to help you assess the risks you are exposed to and what protection packages may be suitable.

How do I make a claim?

In the event that a claim is made against the insured, it is their duty to inform the insurer as soon as possible. Notice is to be put in writing and sent to the insurer by courier, fax or certified mail. The insurer will recognise that notice has been received once their underwriting division has received the notice.

Every letter, demand, writ, summons and legal process pertaining received by the insured related to the claim must also be forwarded across to the insurer.

Most insurers will have claims form located on their website for the insured to complete. These will usually be comprised of the following sections:

Details of the insured
Policy details
General information about the claimant or potential claimant
Details of the insured’s retainer/contract
Details of the claim or circumstance
Details of the insured’s response
List of relevant documents that have been attached to the claim form
Insured’s declaration


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Professional Indemnity Analysed

Professional indemnity insurance provides you, your business and your employees, with protection for financial claims made against you or your business. This type of cover is designed for employees or businesses that give advice and/or provide a service to individuals or businesses, and are looking for a form of protection against legal claims not covered under general insurance policies. Professional indemnity insurance does not generally provide cover for criminal prosecution and a number of other liabilities recognised under criminal law, though other forms of insurance may cover these.

Do I actually need professional indemnity insurance?

Any worker that provides another person advice and/or a service of skilful nature that has required previous training for an established discipline is recognised as a professional.

There is legislation in place in Australia to regulate the provision of services by professionals. Despite this, mistakes can and do happen in the workplace and will often lead to the professional’s client seeking compensation for damages. A professional can still be liable for losses even if the mistake was not a result of their own negligence. Professional indemnity insurance ensures your business can continue to operate despite having to cover legal costs.

Do you own your own business or provide a service?

Most Australian workers are covered under their employer’s liability cover, however any worker carrying out any consulting or contracting work must ensure that they have adequate and appropriate professional indemnity insurance in place. All professionals should take the time to review the current cover they have in place and assess whether it is worth them taking out additional cover to ensure they are protected from claims against errors or omissions they have made in the provision of their professional activities.

Professions that generally require professional indemnity insurance

As mentioned previously, anyone that provides advice or a service to another in an established discipline is a potential candidate for professional indemnity insurance. Some typical professions that will usually require professional indemnity insurance include:

  • Consultants
    IT professionals
    Architects and designers
    BAS Agents
    Finance and mortgage brokers
    Real Estate Agents
    Recruitment Consultants
    Beauty, Massage and Physiotherapists
    Travel Agents and Tour Operators

Many professions work closely with Australian governing bodies to determine an appropriate level of professional indemnity cover that is required for their profession. Regulations around what types of insurance are mandatory for different industries can vary from state to state. It might be best to consult with your industry body to get a clear understanding of the specific types of cover you require.


Does work that is supervised require professional indemnity insurance?

Just because the work is supervised by a principal of the company is no reason for workers to think that they may not be liable to defend claims for negligence. In the event that they end up in court on claims for negligence, the cost of legal fees and advice alone could quickly amount to tens of thousands of dollars. This may only be the start of a potential financial nightmare if they are found to be liable.

Do contract workers need professional indemnity insurance?

There have been cases in Australia where contract workers and consultant have still been found to be negligent despite carrying out duties given by principal with whom they were employed. Many companies will now require contract workers to have both professional indemnity insurance and public liability cover in place. If the work the contract worker performs causes damages, they are liable for claims from the employing company.

What does professional indemnity insurance actually cover?

Essentially, professional indemnity is designed to cover the policyholder for any legal costs that may be incurred if a client files a claim. Any ensuing compensation that may be required to be paid to the client from the individual or business is also covered. Comprehensive policies will offer cover for claims from clients for financial loss, bodily harm or damage to property due to errors in the provision of the service.

Typical civil liabilities covered under a policy include:

  • Breach of duty. Indemnifies the insured for claims arising out of breach of duties including confidentiality, privacy or fiduciary duty
  • Consumer protection liability. Claims for compensation resulting from violation of statutory duty
  • Contractual liability. Claims breach of contractual agreement that can be enforced in court
  • Breach of Competition and Consumer Act and Fair Trading Acts. Indemnifies policyholder for claims arising for breach of Competition and Consumer Act and Fair Trading Acts (Australia and New Zealand)
  • Intellectual property. Claims made for the infringement of the use of intellectual property. Most policies will require for the act to be unintentional and for the purpose of the provision of the service
  • Unintentional defamation. Unintentional publication of words believed to be defamatory of the client if the insured made the comments innocently
  • Contractors or consultants. Liability arising from services provided by contractors or consultants. Indemnity will only provide cover for the policyholder and will not extend to the contractors and/or consultants that have provided the service
  • Libel or slander: Liability arising from libel or slander by the insured to the client provided that it was committed during the provision of their professional service and that it was unintentional
  • Loss of documents. Loss or damage to the clients documents during the provision of the insured’s service
    Misleading and deceptive conduct. Claims arising where the policyholder has engaged in conduct that is misleading or deceptive in the provision of their service as outlined under the ASIC Act 2001
  • Compensation for court appearance. In the event that the policyholder’s legal advisers require the principal or employee of the policyholder’s business to appear in court, the policyholder will be provided with compensation equal to their daily salary to a maximum amount
  • Claims investigations costs. Compensation for costs incurred to investigate claims paid in addition to the maximum limit provided under the policy for Australian and New Zealand jurisdictions
  • Dishonesty of employees. Policyholder will be compensated for liability in respect of claims made that were the result of dishonest, fraudulent, criminal or malicious acts or omission by an employee of the insured during the provision of their service
  • Inquiry costs. Compensation for costs arising out of inquiries into the insured’s liability
  • Joint venture liability. Compensation arising from the insured’s participation in any joint-venture related to their professional service
  • Legal consultation costs. Compensation for costs incurred from legal consultation to the policyholder in the event of a claim
  • Public relations expenses. Indemnifies the policyholder for adverse public relations expenses that arise during the policy period
  • Spouse liability. In the event that a claim is made against the policyholders spouse, the claim will be treated as the liability of the insured’s
  • Extension of claim period. In the event that a claim is made against the insured up to a specified number of days following the expiry of the policy, the insured will still remain covered under the policy

The conditions of the cover features listed above will each have their own set of conditions for compensation to be paid which may vary greatly between policies. It is crucial that anyone looking to take out cover is absolutely clear on the requirements for a claim to be paid and the maximum compensation that they stand to receive under claim.


Who Is Covered Under A Professional Indemnity Insurance Policy?

Professional indemnity insurance must be able to provide adequate cover for the insured to be protected from any civil liabilities that may arise from the provision of their service either from themselves or by others working on their behalf. This cover must be broad enough to extend to past, current and future work. Professional indemnity policies will generally provide cover for:

  • Each party identified in the policy schedule. This may include people, firms or incorporated bodies
    Past, present and future principals
  • Any entity that is created or under the control of the insured that performs a professional service during the policy period
  • Past, present and future employees of the insured. This may extend to include volunteer workers and students
  • Liability of the principal from previous business conducted for the same service that is listed under the current schedule
  • Entities that have previously traded with the business insured under the policy
  • Subsidiary companies of the insured
  • The insured’s spouse
  • Legal entities of the insured
  • Some (but not all) policies may also include cover for:
  • Joint venture liability
  • Liability for professional service that has been provided by an agent or consultant

How is professional indemnity insurance different to public liability insurance?

Everyone is regulated under common law to not cause damage to anyone or their property or to cause them any financial loss. This liability is known as ones general duty of care and is separate to the professional liability that professionals have in the provision of their business to ensure that their client does not suffer any injury, damages to property or financial loss.

Professional Indemnity Public liability Insurance
  • Covers legal liability for claims arising from an act, error or omission of duty by the professional
  • Cover can include claims for personal injury, professional injury or financial loss
  • Provides cover for claims made for actual breaches of professional duty
  • Provides cover for legal liability due to personal injury or property damage caused by your business
  • Product liability is an extension of public liability providing cover for personal injury or damage caused by the use of your products
  • Cover may not always extend to claims for financial loss if there has been on injury or damage
  • Event giving rise to the claim will often have to occur within the period of insurance for cover to apply
  • The claimant must be able to establish that the cause of the loss has direct connection to the business.


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