Policy Features and Claims Examples

Commercial

1. Breach of Confidentiality

Covers a failure to preserve the confidentiality of information acquired during professional appointment and where the confidential information is used to the detriment of the client.

Example: A weight loss consultant who posts images of a high profile client’s “before” and “after” photos in their underwear on the Internet, is sued for future loss of earnings.

2. Breach of Duty

Covers any breach of duty (including breach of duty of confidentiality), in the provision by the insured of the professional services stated in the policy schedule.

Example: A management consultant advising on implementation of accreditation management systems for nursing homes, whose client failed to obtain nursing home accreditation following inadequate recommendations.

3. Dishonesty or Fraud

Covers claims by a third party for loss alleged to have resulted from a dishonest, fraudulent, criminal or malicious act or any breach of fiduciary duty committed by any person entitled to indemnity under this policy. No cover is intended for a loss suffered by the insured.

Example: An accounting firm’s staff member was found to be stealing money from the firm’s clients, to support a gambling addiction.

4. Enquiry (or Enquiries)

Covers legal costs and expenses for representation of the insured, regarding any legal or quasi legal enquiry the insured is legally required to participate by reason. The body conducting the enquiry (including regulatory, licensing or statutory body) has legal jurisdiction over the insured.

Example: A veterinary clinic was requested to attend disciplinary proceedings of professional misconduct for allegedly killing the claimant’s dog. The insured was able to receive assistance with the conduct of the investigation.

5. Loss of, or Damage to Documents

Covers loss of documents, or damage to documents, that were in the insured’s physical custody or control at the time of the loss or damage.

Documents include electronically stored data, software or computer programs for, or in respect of, any computer system that does not include bearer bonds, coupons, bank notes, currency notes, or negotiable instruments.

Example: A professional association for the promotion of the Study of Human Reproduction, responsible for the accreditation of fertility clinics. An accredited clinic was found to have misplaced records of an ex-patient, leading to now scrutinising the clinic’s accreditation.

6. Reinstatement of the Policy Limit

Once the policy limit is exhausted, it will reinstate to have that limit available for additional claims within the same policy period. Therefore, the amount paid for all claims covered by the policy, is up to a maximum of twice the policy limit in the policy period. However, the policy limit is the maximum amount paid for any one claim or a series of claims arising from the same act, error or omission.

Example: A civil engineering consultant who received two claims within one policy period, exceeding the $1,000,000 policy limit. The total amount paid for the two claims covered by this policy is $1,434,000 – the policy limit reinstated after $1,000,000 exhausted. The total claim investigation costs paid for the two claims covered by this policy was $1,447,000 – the claim investigation costs limit was reinstated after $1,000,000 exhausted.

7. Unintentional Defamation

Covers unintentional defamation, whether libel (written or published) or slander (spoken) committed by an insured person.

Example: Professor of a University issued a memo describing an associate professor as “professionally incompetent”. This was passed to the associate professor and several others.

8. Unintentional Infringement of Intellectual Property

Covers unintentional breaches of intellectual property or moral rights, under the Copyright Act 1968, by the insured or an insured person. Intentional breaches or acts that cause a third party loss, with reckless disregard for the consequences, are not covered.

Example: Alleged copyright infringement on a townhouse design.