Several key areas for business owners to consider when selling and supplying products:

·       A business that charges a separate fee for advice should have professional indemnity insurance covering their overall business or the area of their business that provides advice for a fee. As mentioned above, the liability insurance policies generally excludes advice for a fee, so in the event that there is no professional indemnity cover in place, claims arising from advice for a fee would be uninsured. For example: 

CAFBA - Professional Indemnity Insurance - Claim Notifications

A simple act, error or omission can be enough to trigger a complaint against you from a borrower or lender. If this escalates to a legal claim, the consequences can be serious. You could find yourself liable to pay compensation, costs and expenses. At the very least your firm may incur legal costs.

What to notify your PI Insurer

• Known Circumstances

A 'known circumstance' could be defined as any fact, situation or circumstance, which a reasonable person in the insured’s professional position would have thought, might result in someone making a claim against him/her.

• Claims 

A claim means any demand made by a third party upon the Insured for compensation, however conveyed,

including a writ, statement of claim, application or other legal or arbitral process.

• Withdrawal of Accreditation

Withdrawal of accreditation from a Financier (other than due to lack of business or withdrawal from the broker market)

• Breaches 

A breach in the financiers and/or company guidelines

• Customer Complaints

A customer complaint (even if thought to be resolved)

Third party fraud is the most common type of claims for Finance Brokers. Being an intermediary, if a third party has perpetrated fraud (be it a customer &/or a supplier), sometimes allegations can arise relating to the brokers conduct in the transaction(s) either by the lenders, customers and even regulatory authorities.

This is a guide only and is not an exhaustive list, if in doubt notify to ensure that you are afforded protection under your policy in the event that a formal claim should arise. When the policy period expires, no new notification of facts can be made on the expired policy even though the event giving rise to the claim against you may have occurred during the policy period. 

Professional Indemnity Insurance - Claims Examples

• Failure to clearly record serial number

  
  A finance broker failed to clearly record serial numbers in respect to the purchase of commercial machinery. As a result the lender was unable to repossess the machinery when the third party defaulted. The lender claimed against the finance broker for breach of professional duty. The claim was settled for over $100,000.
  
  

• Failure to keep records of telephone conversation

  
  A valuer alleged that he had advised a mortgage broker that the buildings located on the land purchased by the borrower might not belong to the land. The mortgage broker failed to pass these comments on to the lender. The mortgage broker confirmed that a conversation took place between the mortgage broker and valuer, but denied the valuers account. Solicitors reviewed the parties discovered documents and found that there was no written record by either the valuer or the mortgage broker of the said conversation. The final decision was based on the party that provided the more credible defence. The claim was settled for over $150,000.
  
  

• Failure to back up computer files

  
  After a partnership dissolved, one of the partners took the computer that contained all client files, and was required to provide copies of the files to the other partner. A virus developed on the mainframe and all computer files were lost including client files. A claim arose against our Finance Broker but there were no files that our legal team could use to defend the claim.

A Special Message for Business Owners, Consultants and Entrepreneurs looking for Professional Indemnity Insurance…

“Don’t Burden Yourself or Your Family Business With The Stress Of Costly Legal Bills Just Because You or Your Employees Make An Easy Mistake While Working For A Client!”

 … especially when you can rest easy knowing that the best professional indemnity insurance for you and your business is only a quick toll FREE phone call away.

If you’d like some a FREE consultation and some professional advice you can reply on when it comes to what type of professional indemnity insurance protection is right for you and your business needs then simply pick up the phone and call us right now on… 1300 739 861

Whether You Are Self-Employed Or Run A Business, Here Are 3 Facts About Professional Indemnity Insurance That You Should Know Before Taking On A Client

Do you provide a service for a fee and advice that other rely on to make a decision to purchase a product or service? If your in the business of providing advice, whether it be direct or indirect to your clients, then there is something you need to do before you take on another client and that is consider purchasing professional indemnity insurance.

 What are the benefits of having Professional Indemnity insurance cover?

• Peace of mind.

• Saving your valuable time in the incidence of any allegation.

• Reducing the possibility of an interruption to your business.

• Reducing the probability of lost income arising from an interruption to your business by providing time that would be required to defend an allegation without Professional Indemnity insurance.

Some questions to consider when considering sum insured.

• In a worst-case scenario, if something went wrong, what would be the financial loss to third parties? 

• What is the potential for bodily injury claims, and even multiple injuries?

• What is the potential for consequential economic loss to any third party?

• What is the potential for multiple claims in any one policy year?