Continuous Cover
Under this clause, the insurer agrees that if you provide notice of a claim that should or could have been notified under a previous policy period, then the insurer will accept notification of the claim. This is provided on the basis that the same insurer has been covering you on a continuous basis since the date when the notification should have been made.
Costs Inclusive Excess
This means the insured must pay the amount of the excess towards the legal and defence costs and any claim settlement amount.
Costs Exclusive Excess
This means the insured does not pay any excess towards the legal and defence costs but only pays the amount of the excess towards the settlement of any claim.
Limit of Indemnity
The maximum amount that an insurer will provide indemnity for in respect of any one claim, and /or in any one policy year.
Policies can include legal costs and expenses as part of the limit of indemnity or ‘in addition’ to the limit of indemnity.
Examples:
Professional Indemnity sections are usually limited to a maximum amount for any one claim. However, if the insured purchases a policy with a $1,000,000 Limit of Indemnity, and the policy contains one Automatic Reinstatement, then the policy provides cover for Claims aggregating up to $2,000,000 during the policy period. This is subject to any one Claim being no greater than $1,000,000.
Public Liability sections are usually limited to a maximum amount for any one claim (or series of claims from the one incident). However, it is generally unlimited in the number of claims that it will respond to in any one policy year. So a policy with a $20m limit will provide $20m to each unrelated public liability claim.
Product Liability sections are usually limited to a maximum amount for any one claim and for all claims in any one policy year. This means that a policy with a $20m limit will only provide a maximum of $20m, regardless of how many claims are made. This is often referred to as “in the aggregate”.
Retroactive Date
Professional Indemnity policies may include retroactive cover, which provides protection for claims arising from work completed before the start of the current policy period.
BizCover can offer policies with unlimited retroactive dates, meaning cover is provided for professional services performed at any time in the past, provided the claim is made while the policy is active. However, it should be noted that not every kind of previous service is covered. For example, if a sole trader previously owned a different business, then the policy would not cover that previous business if it was a separate entity. This is true even if the retroactive date is unlimited.
Vicarious Liability
When a person or organisation is held liable for the negligent actions of another person or organisation, even though they were not directly responsible for the damage or injury caused, it is known as vicarious liability. For example, an employer can sometimes be held vicariously liable for the acts of a worker or contractor.
