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Professional Indemnity Policy Accountants - PDF
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1 Professional Indemnity Policy Accountants
2 General Information The General Information set out below is provided for your information only. It does not form part of the insurance contract with you, and is not part of the policy. Nothing contained in the General Information imposes contractual obligations on you, or creates contractual rights. These are contained in the policy and any endorsement. Claims made This policy operates on a claims made and notified basis. This means that the policy covers you for claims made against you and notified to us during the period of insurance. The policy does not provide cover in relation to: acts, errors or omissions actually or allegedly committed prior to the retroactive date of the policy (if such a date is specified); claims made after the expiry of the period of insurance even though the event giving rise to the claim may have occurred during the period of insurance; claims notified or arising out of facts or circumstances notified (or which ought reasonably to have been notified) under any previous policy; claims made, threatened or intimated against you prior to the commencement of the period of insurance; facts or circumstances of which you first became aware prior to the period of insurance, and which you knew or ought reasonably to have known had the potential to give rise to a claim under this policy; claims arising out of circumstances noted on the proposal form for the current period of insurance or on any previous proposal form. Where you give notice in writing to us of any facts that might give rise to a claim against you as soon as reasonably practicable after you become aware of those facts but before the expiry of the period of insurance, you may have rights under Section 40(3) of the Insurance Contracts Act 1984 to be indemnified in respect of any claim subsequently made against you arising from those facts notwithstanding that the claim is made after the expiry of the period of insurance. Any such rights arise under the legislation only. The terms of the policy and the effect of the policy is that you are not covered for claims made against you after the expiry of the period of insurance. General Insurance Code of Practice We are a signatory to the General Insurance Code of Practice. The Code aims to raise standards of practice and service in the insurance industry. It: promotes better communication between insurers and customers which will lead to better public understanding of insurance to allow customers to make informed choices, and outlines good standards of practice and service to be met by insurers to enhance their regulation for responding efficiently to their customers needs. (a) Dispute resolution process We will do everything possible to provide a quality service to you. However, we recognise that occasionally there may be some aspect of our service or a decision we have made that you wish to query or draw to our attention. We have a Complaints and Dispute Resolution Procedure which undertakes to provide an answer to your complaint within fifteen (15) working days. If you would like to make a complaint or access our internal dispute resolution service please contact our nearest office and ask to speak to a dispute resolution specialist. (b) Contact for assistance or confirmation of cover If you need to confirm any policy transaction or clarify any of the information contained in this policy document or if you have any other queries, please contact any of our offices or refer to our website at If this insurance has been issued through an insurance intermediary If your policy has been arranged through our agent, or a broker who is acting under an agency arrangement such as a binder with us, then they are acting as our agent and not as your agent. They will tell you when this is the case. If your policy has been arranged by a broker, other than a broker acting under such an agency arrangement with us, then the broker is acting as your agent. Where this policy has been arranged through an intermediary a commission may be payable by us to them for arranging the insurance. i
3 Privacy Act 1988 The Privacy Act 1988 contains National Privacy Principles which require us to tell you that as an insurer we collect, handle, store and disclose your personal and sensitive information in order to: decide whether to issue a policy, determine the terms and conditions of your policy, compile data, and handle claims. Sensitive information includes, amongst other things, information about an individual s health, membership of professional associations and criminal records. You have given us your consent to collect your personal and sensitive information in order to issue you with this policy. We disclose personal information to third parties who we believe are necessary to assist us and them in providing the relevant services and products. For example, in handling claims, we may have to disclose your personal and other information to third parties such as other insurers, reinsurers, loss adjusters, external claims data collectors, investigators and agents or other parties as required by law. We limit the use and disclosure of any personal information provided by us to them to the specific purpose for which we supplied it. You have the right to seek access to your personal and sensitive information and to correct it at any time. Allianz Australia aims to ensure that your personal information is accurate, up to date and complete. Please contact us on EST 8am-6pm, Monday to Friday if you would like to seek access to, or revise your personal information or feel that the information we currently have on record is incorrect or incomplete or believe that the privacy of your personal information at Allianz Australia has been interfered with. In these cases you are entitled to raise your concerns. Your complaint will be managed and resolved through our internal Privacy Complaint Procedure. Should you wish to obtain more information about Allianz s privacy policies, please contact us and ask for a copy of our booklet called General Insurance Information Privacy Code. From time to time we may advise or offer you information on other Allianz products or services that may be relevant and of interest to you. If you do not wish to receive these offers or information please call the Allianz Direct Marketing Privacy Service Line on EST 8am-6pm, Monday to Friday or indicate your decision in the appropriate area of the Privacy section of our website at Your Duty of Disclosure Before you enter into an insurance contract with us, the Insurance Contracts Act 1984 requires you to provide us with the information we need to enable us to decide whether and on what terms your application for insurance is acceptable and to calculate how much premium is required for your insurance. The Act imposes a different duty the first time you enter into the policy with us to that which applies when you renew, vary, extend, reinstate or replace your policy. We set these two duties out below. Your Duty of Disclosure when you enter into this policy with us for the first time You will be asked various questions when you first apply for this policy. When you answer these questions, you must: give us honest and complete answers; tell us everything that you know; and tell us everything that a reasonable person in the circumstances could be expected to tell us. Your Duty of Disclosure when you renew, vary, extend, reinstate or replace your policy When you renew, vary, extend, reinstate or replace the policy, your duty is to tell us before the renewal, variation, extension, reinstatement or replacement is made, every matter known to you which: you know, or a reasonable person in the circumstances could be expected to know, is relevant to our decision whether to insure you and whether any special conditions need to apply to your policy. What you do not need to tell us for either duty You do not need to tell us about any matter: that diminishes our risk; that is of common knowledge; that we know or should know as an insurer; or that we tell you we do not need to know. Who do the two duties above apply to? Everyone who is insured under the policy must comply with the relevant duty. ii
4 What happens if you or they do not comply with either duty? If you or they do not comply with the relevant duty, we may cancel the policy or reduce the amount we pay if you make a claim. If fraud is involved, we may treat the policy as if it never existed and pay nothing. iii
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6 Contents Professional Indemnity Policy Accountants Part 1 What We Insure You For 2 1. Insuring Clause 2 2. Defence Costs 2 3. Limit of Indemnity 2 4. Deductible 2 5. Extent of Indemnity 3 Part 2 Automatic Extensions 3 6. Consultants, Sub-Contractors and Agents 3 7. Continuous Cover 3 8. Estates and Legal Representatives 3 9. External Appointments Former Principals Etc Former Subsidiary Fraud and Dishonesty Loss of Documents Newly Acquired or Created Subsidiary Practitioners Run-Off Cover Previous Business Reinstatement of Limit of Indemnity 5 Part 3 Optional Extensions Fidelity Cover Subsidiaries Pre-Acquisition Liability 6 Part 4 Exclusions Prior or Pending Claims Subsidiaries Terrorism Exclusion Endorsement Trading Debts 9 Part 5 Claims Conditions Notification Conduct of Proceedings Co-Operation Mitigation Senior Counsel Election to Contest 10 Part 6 Other Conditions Alteration to Risk Subrogation Assignability Cancellation Representations Imputation Governing Law GST Basis of Settlement 11 Part 7 Definitions & Interpretation Definitions Interpretation Asbestos Associates and Relatives Assumed Duty or Obligation Fines and Penalties Fraud and Dishonesty Investment Performance Jurisdictional and Territorial Limit Managed Investment Schemes Obligations to Employees Personal Injury and Property Damage Pollution and Nuclear Risk 8 1
7 Professional Indemnity Policy Accountants This policy sets out the conditions on which we, Allianz Australia Insurance Limited, AFS Licence No , ACN , agree to insure you in consideration for your payment of the premium. When reading this policy, please note that some words are specially defined. There is a list of these defined words at the end of the policy. To assist you, we have indicated these specially defined words in bold print. Part 1 What We Insure You For 1. Insuring Clause 1.1 General We agree to indemnify you against all civil liability arising from any claim that is first made against you during the period of cover in respect of your conduct of the professional business. 1.2 Civil Liability The civil liability referred to in sub clause 1.1 includes, but is not restricted to civil liability: (a) under the Trade Practices Act 1974 (C wealth), the Fair Trading Act 1987 (NSW), or similar legislation enacted by the other States or Territories of the Commonwealth of Australia or the Dominion of New Zealand; or (b) for defamation; or for infringement of copyrights, trademarks, registered designs or patents or any plagiarism or breach of confidentiality; or (d) in respect of any activity in which you are engaged as a joint venturer, although we are only liable to indemnify you in respect of liability arising out of your acts, errors or omissions and not those of your joint venturer or joint venturers. 2. Defence Costs 1.1 General We agree to pay any defence costs: (a) that we incur; or (b) that you incur with our written consent. 2.2 Advancement of Defence costs We agree to pay defence costs before final disposition of a claim: (a) where we give you written confirmation that we will indemnify you against civil liability arising from the claim; or (b) where we take over and conduct proceedings in respect of the claim under sub clause In any other case, we may pay defence costs before final disposition of a claim at our discretion. 2.3 Reimbursement of Defence costs Advanced If we subsequently refuse to indemnify you under the policy, you must reimburse us for any defence costs that we paid in advance. 3. Limit of Indemnity 3.1 General We are only liable to indemnify you against civil liability arising from any one claim, and in the aggregate from all claims, up to the limit of indemnity. 3.2 Defence costs We agree to pay the defence costs in addition to the limit of indemnity. However, if your civil liability arising from a claim exceeds the limit of indemnity, we are only liable to pay the same proportion of the defence costs as the amount of the limit of indemnity bears to the amount of your civil liability in respect of the claim. In all other cases, the maximum amount that we are liable to pay in defence costs is a sum equivalent to the limit of indemnity. 4. Deductible 4.1 General We are only liable to indemnify you against that part of your civil liability in respect of each claim that exceeds the deductible. You must bear the deductible in respect of each claim. 4.2 Our Investigation Costs Any costs and expenses that we incur to determine whether we are liable to indemnify you under this policy are not subject to the deductible. We agree to bear any such costs and expenses. 4.3 Your Defence costs Where a claim is made against you for an amount that is less than the deductible, you must bear all defence costs up to the limit of the deductible, unless we notify you in writing that we agree to bear the defence costs. Furthermore, where the deductible is expressed in the schedule to be inclusive of defence costs, you must pay all defence costs up to the amount of the deductible that we incur in the engagement of advisers that we consider necessary to determine your liability and to resolve the claim. 2
8 4.4 Claims For purposes of this clause, all claims that arise from any one act, error or omission, or series of related acts, errors or omissions are deemed to constitute one claim. 5. Extent of Indemnity 5.1 Extensions Our liability to indemnify you is extended by: (a) the automatic extensions set out in Part 2 of this policy; and (b) any optional extensions set out in Part 3 of this policy that are specified in the schedule to apply; and any extensions incorporated by endorsement to this policy. Our liability to indemnify you may be extended by either one or a combination of these extensions. 5.2 Exclusions and Conditions However, unless expressly provided otherwise, our liability to indemnify you under Parts 1, 2 and 3 of this policy and any endorsement is subject to: (a) the limit of indemnity and deductible set out in clauses 3 and 4 of this policy; and (b) the exclusions from liability set out in Part 4 of this policy; and the claims conditions set out in Part 5 of this policy; and (d) the other conditions set out in Part 6 of this policy; and (e) any exclusions, conditions or other provisions incorporated by endorsement to this policy. Part 2 Automatic Extensions 6. Consultants, Sub-Contractors and Agents We agree to indemnify you against all civil liability arising from any claim that is first made during the period of cover in respect of any consultant, subcontractor or agent for whose acts, errors or omissions you are liable. However, we are only liable to indemnify you under this clause in respect of an act, error or omission by the consultant, sub-contractor or agent in connection with your professional business. Also, we are not liable to indemnify that consultant, sub-contractor or agent under this clause. 7. Continuous Cover 7.1 We agree to indemnify you against civil liability arising from any claim that arises out of facts which first became known to you prior to the period of cover where: (a) we were your professional indemnity insurer at the time the facts first became known to you (the previous policy period ) and have continued to be your professional indemnity insurer from then until the date of actual notification; and (b) but for your failure to notify us of the facts during the previous policy period, you would have been entitled to indemnity under a previous policy issued by us; and but for the prior or pending claims exclusion in clause 31 you would be entitled to indemnity under this policy; and (d) you have not committed or attempted to commit fraudulent non-disclosure or fraudulent misrepresentation. 7.2 We are only liable to indemnify you to the extent that we would have been obliged to indemnify you under the terms and conditions of the policy in effect during the current policy period. 8. Estates and Legal Representatives We agree to indemnify your estate, heirs, legal representatives or assigns if you die, become insolvent, bankrupt or mentally incompetent, to the extent that we would otherwise have been liable to indemnify you. 9. External Appointments We agree to indemnify you against civil liability arising from any claim that is first made against you during the period of cover, arising out of any appointments held by you individually when acting as trustees, executors, receivers, managers, liquidators, administrators, directors or secretaries of proprietary companies 3
9 including partial secretarial work such as share transfers, dividend or interest warrants or capital redemption warrants or any other document covering that payment of monies or as clerks or managers of a charity provided that: (a) the fees received from such appointments form part of the income of the professional business conducted on your behalf; or (b) where no fee is received, the appointment is held on behalf of or with the consent of the person or entity referred to in subparagraphs (i) or (ii) of the definition of you in clause 49(o). 10. Former Principals Etc We agree to indemnify any former principal, partner, director or employee of yours against all civil liability arising from any claim that is first made against them during the period of cover in respect of their conduct of the professional business. We are only liable to indemnify them under this clause in respect of acts, errors or omissions while they were still your principal, partner, director or employee. 11. Former Subsidiary We agree to indemnify you against all civil liability arising from any claim that is first made against you during the period of cover in respect of the professional business by any entity that, at the commencement of the policy, is a former subsidiary of yours. 12. Fraud and Dishonesty 12.1 General We agree to indemnify you against civil liability arising from any claim that is first made against you during the period of cover, in respect of a dishonest, fraudulent, malicious or reckless act or omission committed or alleged to have been committed by any other person or entity covered by this policy in the performance of the professional business. However, we are not liable to indemnify you under this clause: (a) if you personally committed or condoned any act, omission or breach excluded by the fraud and dishonesty exclusion in clause 24; or (b) in respect of any loss of currency. This extension applies notwithstanding the fraud and dishonesty exclusion in clause Meaning of you personally For purposes of this clause, you personally, refers to the person or entity covered by this policy seeking indemnity under this policy. 13. Loss of Documents 13.1 General We agree to indemnify you against costs and expenses that you incur in replacing or restoring lost documents for which you are legally responsible where you first discover the loss during the period of cover. However, we are only liable to indemnify you against those costs and expenses for which you provide us with bills or accounts that are approved under sub clause Your obligation to notify us You must notify us of the loss of documents as soon as practicable after you discover the loss and in any event within 30 days Approval of bills or accounts Once you provide us with bills or accounts, we may either: (a) approve the bills or accounts and indemnify you; or (a) nominate a competent person to review the bills or accounts. If we nominate a competent person, you must notify us whether or not you approve of our nominee Deductible Notwithstanding sub clause 4.1, you do not have to bear the deductible in respect of costs and expenses covered by this clause Meaning of lost documents For purposes of this clause, lost documents means documents that have been destroyed, damaged or mislaid and cannot be found after diligent search. 14. Newly Acquired or Created Subsidiary 14.1 General Cover We agree to indemnify any subsidiary that you acquire or create after commencement of the policy against all civil liability arising from any claim that is first made against the subsidiary within a period extending from the date that you acquire or create the subsidiary to the earlier of: (a) 30 days after that date; or (b) expiry of the period of cover. in respect of its conduct of the professional business Discretionary Cover We may, at our discretion, offer to indemnify any subsidiary that you acquire or create during the period of cover against all civil liability arising from any claim that is first made against the subsidiary 4
10 after expiry of 30 days from the date that you acquire or create the subsidiary but within the period of cover in respect of its conduct of the professional business. Before we may exercise our discretion, you must: (a) notify us of your acquisition or creation of the subsidiary; and (b) provide us with all additional information that we request. If we offer to extend our liability under this clause, we may require that you comply with additional conditions, including conditions charging any additional premium that we consider appropriate. You must notify us as to whether or not you agree to the additional conditions. If you do not agree to the additional conditions, we are not liable to indemnify the subsidiary. 15. Practitioners Run-Off Cover 15.1 We agree to indemnify a Former Practitioner against all civil liability arising from any claim in respect of his conduct of the professional business, provided that: (a) the act, error or omission giving rise to the claim was committed by the Former Practitioner before he ceased to practice; and (b) Income derived from any accountancy practice undertaken by the Former Practitioner subsequent to the cessation of his practice has not exceeded $10,000 in any twelve month period; and We have not ceased to provide professional indemnity insurance to accountants through the scheme or facility under which this policy was issued Unless expressly provided otherwise, our liability to indemnify the Former Practitioner under this extension is subject to: (a) the limit of indemnity and deductible set out in clauses 3 and 4 of this policy; and (b) those exclusions from liability set out in Part 4 of this policy; and those claims conditions set out in Part 5 of this policy; and (d) those other conditions set out in Part 6 of this policy; and (e) any exclusions, conditions or other provisions incorporated by endorsement to the policy, in effect at the date of cessation of the Former Practitioner s practice For the purpose of this clause, Former Practitioner means an accountant (and his personal representatives) who has ceased by reason of death, retirement or otherwise to practise in public practice, and who, immediately prior to cessation of practice was insured by us under this policy and, (a) practised as a sole practitioner; or (b) was a partner, principal, director or shareholder of a practice which has ceased to carry on business. 16. Previous Business You may advise us in the proposal that you require us to indemnify: (a) a current principal, partner, director or employee; or (b) a former principal, partner, director or employee; or a principal, partner, director or employee that you intend to appoint, during the period of cover, in respect of their previous business. If you do so, we agree to indemnify them against all civil liability arising from any claim that is first made against them during the period of cover in respect of their conduct of the same profession as your professional business before they become your principal, partner, director or employee. 17. Reinstatement of Limit of Indemnity 17.1 General If the limit of indemnity is exhausted as a result of a claim made against you during the period of cover, we agree to reinstate the limit of indemnity in clause 3 in respect of any other subsequent unrelated claim made against you. We agree to reinstate the limit of indemnity the number of times specified in the schedule. Each reinstatement is subject to clause Limit of Indemnity We are only liable to indemnify you under this clause against civil liability arising from any one claim, and in the aggregate in respect of all claims, arising from any one act, error or omission or series of related acts, errors or omissions, up to the limit of indemnity Restriction on Reinstatement Subject to the Insurance Contracts Act 1984 (C wealth) the reinstatement of the limit of indemnity in this clause only applies in excess of the total cover provided by any policy or policies that apply in excess of this policy. 5
11 Part 3 Optional Extensions 18. Fidelity Guarantee 18.1 General We agree to indemnify you against loss of any currency: (a) which is your property; or (b) for which you are legally responsible, arising from any dishonest, fraudulent, malicious or reckless act or omission in the conduct of the professional business by any other person or entity covered by this policy where you first discover the loss during the period of cover. However, we are not liable to indemnify you under this clause if you personally committed or condoned any act, omission or breach excluded by the fraud and dishonesty exclusion in clause 24. This extension applies notwithstanding the fraud and dishonesty exclusion in clause Your obligation to notify us You must: 18.4 Meaning of you personally For purposes of this clause, you personally, refers to the person or entity covered by this policy seeking indemnity under this policy. 19. Subsidiaries Pre-Acquisition Liability We agree to indemnify: (a) any current subsidiary; or (b) any former subsidiary; or any subsidiary that you acquire or create during the period of cover, against all civil liability arising from any claim that is first made against the subsidiary during the period of cover in respect of any act, error or omission committed or alleged to have been committed by the subsidiary before the date that you acquire or create the subsidiary but after the retroactive date specified in the schedule in respect of its conduct of the same profession as your professional business. This extension applies notwithstanding the subsidiaries exclusion in clause 32. (a) notify us of the loss of currency as soon as practicable after you discover the loss and in any event within 21 days; and (b) give us all necessary information and assistance to enable us to sue the person committing the dishonest, fraudulent, malicious or reckless act or omission in respect of the loss of currency Scope of Indemnity Our liability to indemnify you under this clause is subject to the following: (a) we are only liable to indemnify you against the aggregate of loss under this clause up to the fidelity limit of indemnity specified in the schedule; and (b) you must bear the fidelity deductible specified in the schedule in respect of each and every individual dishonest, fraudulent, malicious or reckless act or omission; and you must bear any costs or expenses that you incur to substantiate the loss of currency; and (d) you must bear any loss that you incur as a consequence of any act or omission occurring after the date you discover, or have reasonable suspicion of, the dishonest, fraudulent, malicious or reckless act or omission. Any indemnity we provide to you under this clause for a loss of currency will reduce the limit of indemnity otherwise available to you under this policy. 6
12 Part 4 Exclusions 20. Asbestos Notwithstanding any provision to the contrary within this insurance or any endorsement thereto, it is agreed that this insurance shall not apply to and does not cover any actual or alleged liability whatsoever for any claim or claims in respect of loss or losses directly or indirectly arising out of, resulting from or in consequence of, or in any way involving asbestos, or any materials containing asbestos in whatever form or quantity. 21. Associates and Relatives 21.1 General We are not liable to indemnify you in respect of any claim based upon, attributable to, or in consequence of any work performed by you for any: (a) person or entity who is your associate; or (a) person who, at the time of the act, error or omission giving rise to the claim, is your relative, unless such person is acting without any prior direct or indirect solicitation or co-operation by you or your associates Meaning of your associate For purposes of this clause, your associate means: (a) any person or entity insured under this policy; or (b) any subsidiary of yours whether or not it is insured under this policy; or any business or company in which you have a direct or indirect financial or proprietary interest We are not liable to indemnify you in respect of any claim based upon, attributable to, or in consequence of the provision by you of any advice inducement or recommendation regarding the investment of any interest, capital or personal endeavour in an investment facility or service in which you or your relative have a direct or indirect financial or proprietary interest Meaning of your relative For purposes of this clause, your relative means: (a) your spouse, domestic partner or companion; or (b) your parents or the parents of the spouse, domestic partner or companion; or your children or siblings Meaning of financial or proprietary interest For the purposes of this clause, financial or proprietary interest does not include an interest in less than 10% of the issued capital of a public company or less than 10% of the value of any other enterprise. 22. Assumed Duty or Obligation We are not liable to indemnify you in respect of any claim based upon, attributable to, or in consequence of any duty or obligation assumed by you outside the normal course of the professional business. 23. Fines and Penalties We are not liable to indemnify you in respect of any claim for punitive, aggravated, multiple or exemplary damages, or fines or any criminal or civil penalties imposed by law. This exclusion does not apply to civil penalties which are compensatory in nature and payable to third parties. 24. Fraud and Dishonesty We are not liable to indemnify you in respect of any claim directly or indirectly based upon, attributable to, or in consequence of any: (a) dishonest, fraudulent, malicious, or reckless act or omission; or (b) any wilful violation or wilful breach of any statute or regulation, by you or your consultants, sub-contractors or agents where such act, omission, violation or breach is established by judgment or other final adjudication. 25. Investment Performance We are not liable to indemnify you in respect of any claim directly or indirectly based upon, attributable to, or in consequence of: (i) loss (or failure to appreciate) in value of any investments, including but not limited to securities, commodities, currencies, options and futures transactions; or (ii) any actual or alleged representation, advice or guarantee provided by or on your behalf as to the performance of any such investments. This exclusion does not apply to any claim arising directly out of your failure to effect a specific investment transaction pursuant to a specific instruction from a client of yours. 26. Jurisdictional and Territorial Limit We are not liable to indemnify you in respect of any claim: (a) made in or determined pursuant to the law of the United States of America or the Dominion of Canada or their territories or protectorates; or (b) arising out of the enforcement of judgments, orders or awards obtained within or determined pursuant to the law of the United States of America or the Dominion of Canada or their territories or protectorates. 7
13 27. Managed Investment Schemes We are not liable to indemnify you in respect of any claim directly or indirectly based upon, attributable to or in consequence of any advice and/or investment or the allocation of funds in respect of any managed investment scheme. A managed investment scheme shall mean any scheme/s managed by you or on your behalf, falling within the definition of managed investment scheme in section 9 of the Corporations Act 2001, or any other legislation. 28. Obligations to Employees We are not liable to indemnify you in respect of any claim based upon, attributable to, or in consequence of bodily injury, mental injury, sickness, disease or death of any employee or damage to or destruction of any property of any employee, including loss of use, arising out of, or in the course of, their employment. 29. Personal Injury and Property Damage We are not liable to indemnify you in respect of any claim directly or indirectly based upon, attributable to, or in consequence of: (a) bodily injury, sickness, disease or death of any person; or (b) physical loss of, damage to, or destruction of any tangible property including any loss of use of tangible property. 30. Pollution and Nuclear Risk 30.1 General We are not liable to indemnify you in respect of any claim directly or indirectly based upon, attributable to, or in consequence of: (a) the actual, alleged or threatened discharge, dispersal, release or escape of pollutants into or upon real or personal property, the atmosphere any water course or body of water or any enforcement, action or proceeding in connection with the containment, clean up, removal, treatment or monitoring of such pollutants or seepage, pollution or contamination howsoever occurring; or (b) ionizing radiation or the contamination by radioactivity from any nuclear fuel or from any nuclear waste from the combustion of any nuclear fuel Meaning of pollutant For purposes of this clause, pollutant means: (a) any solid, liquid, gaseous or thermal irritant or contaminant, including without limitation smoke, vapour, soot, fumes, acids, alkalis and chemicals; and (b) any waste materials, including materials to be recycled, reconditioned or reclaimed; and any other air emission, odour, waste, water, oil, oil products, infectious or medical waste, or any noise emission. 31. Prior or Pending Claims We are not liable to indemnify you in respect of any claim: (a) directly or indirectly based upon, attributable to, or in consequence of, any circumstance of which you first became aware prior to the commencement of the policy and which you knew or ought reasonably to have known, had the potential to give rise to a claim under this policy or under any previous policy; or (b) that was first made prior to the commencement of the policy. 32. Subsidiaries We are not liable to indemnify you in respect of any claim against: (a) a current subsidiary; or (b) a former subsidiary; or a subsidiary that you acquire or create during the period of cover, in respect of any act, error or omission committed or alleged to have been committed by the subsidiary either: (a) before you acquire or create the subsidiary; or (b) after the subsidiary ceases to be your subsidiary. 33. Terrorism Exclusion Endorsement Notwithstanding any provision to the contrary within this insurance or any endorsement thereto, it is agreed that this insurance excludes death, injury, illness, loss, damage, cost or expense directly or indirectly caused by, contributed to by, resulting from or arising out of or in connection with any act of terrorism, as defined herein, regardless of any other cause or event contributing concurrently or in any other sequence to the loss. For the purpose of this endorsement any act of terrorism includes any act, or preparation in respect of action, or threat of action designed to influence the government de jure or de facto of any nation or political division thereof, or in pursuit of political, religious, ideological or similar purposes to intimidate the public or a section of the public of any nation by any person or group(s) of persons whether acting alone or on behalf of or in connection with any organisation(s) or government(s) de jure or de facto, and which: 8
14 (i) involves violence against one or more persons; or (ii) involves damage to property; or (iii) endangers life other than that of the person committing the action; or (iv) creates a risk to health or safety of the public or a section of the public; or (v) is designed to interfere with or to disrupt an electronic system. This insurance also excludes death, injury, illness, loss, damage, cost or expense directly or indirectly caused by, contributed to by, resulting from, or arising out of or in connection with any action in controlling, preventing, suppressing, retaliating against, or responding to any act of terrorism. 34. Trading Debts We are not liable to indemnify you in respect of any claim based upon, attributable to, or in consequence of any trading debt that you incur or any guarantee that you give for a debt. Part 5 Claims Conditions 35. Notification You must notify us of any claim made against you during the period of cover as soon as practicable after the claim is made. You must give notice of any claim, loss or other matter in writing, and send it to The Claims Manager, Professional Risks Division, Allianz Australia Insurance Limited, 2 Market Street, Sydney, NSW, Conduct of Proceedings 36.1 General We may elect at any time to take over and conduct, in your name any proceedings in relation to which we: (a) have advanced defence costs to you; or (b) are liable to indemnify you under this policy Settlement of Claims Etc You must not incur any defence costs, settle any claim, make any admission, offer, payment or otherwise assume any contractual obligations with respect to any claim without our prior written consent. We are not liable to indemnify you in respect of any defence costs, settlement, admission, offer, payment or assumed obligation unless we give our written consent. However, we must not withhold consent unreasonably. 37. Co-Operation You must: (a) give us and our investigators and legal representatives all information and assistance that we or they reasonably require; and (b) co-operate fully with us and our investigators and legal representatives in any proceedings in relation to which we are liable to indemnify you under this policy. 38. Mitigation You must use all due diligence and do and concur in doing all things reasonably practicable to avoid or diminish any civil liability, defence costs or loss in respect of which we are liable to indemnify you under this policy. 39. Senior Counsel 39.1 General Neither we nor you may require the other to contest any claim unless Senior Counsel advises that the claim should be contested. In formulating his or her advice, Senior Counsel must take into consideration 9
15 the damages and costs which are likely to be recovered by the plaintiff, the likely defence costs and your prospects of successfully defending the claim Appointment of Senior Counsel If a claim is made against you, we may nominate a Senior Counsel. If we nominate a Senior Counsel, you must notify us whether or not you approve of our nominee as soon as practicable. If we cannot agree with you upon Senior Counsel within a reasonable time, Senior Counsel will be appointed by the President of the Bar Association in the jurisdiction in which the claim is being heard Costs of Senior Counsel s Opinion The cost of Senior Counsel s opinion is included in the defence costs Meaning of Senior Counsel For purposes of this clause, Senior Counsel means a practising barrister who is entitled to practice as a Queens Counsel or Senior Counsel in Australia or New Zealand. 40. Election to Contest If we recommend settlement in respect of any claim and you do not agree to settlement, you may elect to contest the claim. However, our liability in connection with the claim is then limited to the amount we recommend in settlement plus defence costs incurred with our consent up to the date we recommend settlement to you. Part 6 Other Conditions 41. Alteration to Risk You must notify us as soon as practicable of any material alteration to risk during the period of cover including: (a) if you submit to voluntary bankruptcy, receivership or liquidation; or (b) if you fail to pay debts or breach any other obligation giving rise to the appointment of a receiver, bankruptcy, or winding-up proceedings; or the professional registration or certification of any of you is cancelled, suspended or terminated; or (d) any of you becomes the subject of disciplinary action by your professional association; or (e) any material change in the nature of the professional business. 42. Subrogation If we make a payment under this policy, we are subrogated to all your rights of contribution, indemnity or recovery. You must always act to secure and preserve your rights of contribution, indemnity and recovery, and must do all things and execute all documents to enable us to recover such contribution, indemnity or recovery in your name. 43. Assignability You must not assign this policy, or any of your rights under this policy, without our prior written consent. 44. Cancellation You may cancel this policy at any time by notifying us in writing. We may cancel this policy in accordance with section 60 of the Insurance Contracts Act 1984 (C wealth). On cancellation, we agree to refund you a 80% pro rata proportion of the nett premium specified in the schedule, based upon the expired portion of the period of cover, however, this refund of premium is subject to no claims or circumstances having been notified during the period of cover. In all other respects this policy remains unaltered. 45. Representations In granting this policy, we rely upon the declarations and statements in, and the attachments to, the proposal. 46. Imputation Where more than one person or entity is insured under this policy: 10
16 (a) failure by an insured person or entity to comply with the duty of disclosure under the Insurance Contracts Act 1984 (C wealth); or (b) misrepresentation by an insured person or entity to us before this policy commences; or failure by an insured person or entity to comply with any terms or conditions of this policy, does not prejudice the right of any other insured person or entity to indemnity under this policy. However, this clause only applies if: (i) the other insured person or entity is innocent of, and has no knowledge of, such conduct; and (ii) as soon as practicable after becoming aware of the conduct, they notify us of all facts relating to such conduct. 47. Governing Law The laws of the Commonwealth of Australia and the State or Territory where the policy is issued govern this policy. Any disputes relating to interpretation shall be submitted to the exclusive jurisdiction of the Courts of Australia. 48. GST Basis of Settlement The amount that we are liable to pay under this policy will be reduced by the amount of any input tax credit that you are or may be entitled to claim for the supply of goods or services covered by that payment. If you are entitled to an input tax credit for the premium, you must inform us of the extent of that entitlement at or before the time you make a claim under this policy. We will not indemnify you for any GST liability, fines or penalties that arise from or is attributable to your failure to notify us of your entitlement (or correct entitlement) to an input tax credit on the premium. If you are liable to pay a deductible under this policy, the amount payable will be calculated after deduction of any input tax credit that you are or may be entitled to claim on payment of the deductible. Part 7 Definitions & Interpretation 49. Definitions In this policy, unless the context requires otherwise: (a) Claim means: (i) a written or verbal demand by a third party for compensation or damages; or (ii) a civil proceeding brought by a third party for recovery of compensation or damages, in respect of an actual or alleged breach of professional duty. (b) Currency means any money, negotiable instruments, bearer bonds or coupons, stamps, bank or currency notes. Deductible is the amount specified as such in the schedule. (d) Defence costs means reasonable costs, charges, fees (including legal counsels fees and experts fees) and expenses incurred after the date a claim is notified to us in defending, investigating or monitoring a claim and costs of appeal. (e) Documents means your documents and those for which you are legally responsible that: (f) (i) relate to the professional business including but not limited to written, printed, computer records and electronic data material but not including any currency, and (ii) whether your property or not, are in your personal control, or the control of any other person with whom you have lodged, deposited or entrusted such documents. Employee means any person that you employ under a contract of service or apprenticeship during or prior to commencement of the policy. (g) Limit of indemnity is the limit of our total liability under this policy specified as such in the schedule. (h) Period of cover is the period specified as such in the schedule. (i) Policy means: (i) these terms, conditions, definitions and exclusions and the attached schedule; and (ii) any endorsement attached to and forming part of this policy either at commencement of the policy or during the period of cover; and (iii) the proposal. (j) Professional business means the profession, practice, occupation or business conducted by the person, partnership, company or other entity specified in 11
17 the schedule being advice given or services performed of whatsoever nature undertaken by or on your behalf as: (i) Licensed Dealers Representatives; or (ii) trustees; or (iii) receivers, liquidators or official managers; or (iv) directors or secretaries or registrars of proprietary companies; or (v) any activity declared by the ethical pronouncements or code of ethics of the Institute of Chartered Accountants in Australia or the Australian Society of Certified Practising Accountants or the National Institute of Accountants or the Association of Taxation and Management Accountants Ltd or the National Tax & Accountants Association or any like professional organisation, to be undertaken as part of an Accountant s practice. 50. Interpretation In interpreting any word or expression in this policy: (a) the singular includes the plural; (b) the male gender includes the female, and vice versa; where any word or phrase is given a definite meaning, any part of speech or other grammatical form of that word or phrase has a corresponding meaning; (d) words shown in bold, for example, claim, are words that clause 49 defines. (k) Proposal means your written proposal to us. (l) Schedule means the schedule relating to this policy. (m) Subsidiary means: (i) any entity in which you own or control, directly or indirectly, in any combination, more than 50% of the outstanding securities or voting rights representing the present right to vote for election of directors; or (ii) any entity deemed to be your subsidiary under any applicable legislation, law or Australian Accounting Standard. (n) We, us, our means Allianz Australia Insurance Limited, AFS Licence No , ACN (o) You means: (i) the person, partnership, company or other entity specified as such in the schedule including their predecessors in business; and (ii) where the entity referred to in subparagraph (i) of this definition is a company any subsidiary in existence at the commencement of the policy; and (iii) any person who, at any time during the period of cover, is a principal, partner, director or employee of any person or entity referred to in subparagraphs (i) or (ii) of this definition; and (iv) any person who, at the commencement of the policy, is a former principal, partner, director or employee of any person or entity referred to in subparagraphs (i) or (ii) of this definition. 12
18 Contact: Allianz Australia Insurance Limited ABN Market Street, Sydney NSW 2000 The information in this brochure is current as at April POL395BA 04/09
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