1300 249 268 Call

Important Terms You Need To Know 

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, provided 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 the policy provides cover for Claims aggregating up to $2,000,000 during the policy period, 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), but 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 and every 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. So 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

The indemnity provided under Professional Indemnity policies may include unlimited retroactive cover which includes activities undertaken before specified retroactive

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. For example an employer can sometimes be held vicariously liable for the acts of a worker or contractor.