Professional Indemnity Policy – Association Liability
General InformationThe 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
Some clauses of this policy operate 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.
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 confirmationof 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
www.allianz.com.au.
(c) If this insurance has been issued through aninsurance 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.
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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.
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 13 2664 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 13 2664
EST 8am-6pm, Monday to Friday or indicate your
decision in the appropriate area of the Privacy section
of our website at www.allianz.com.au.
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 thispolicy 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.
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Who do the two duties above apply to?
Everyone who is insured under the policy must comply
with the relevant duty.
What happens if you or they do not comply witheither 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.
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ContentsProfessional Indemnity Policy –
Association Liability Policy
Part 1 – What We Insure You For 3
1. Professional Indemnity Insuring Clause 3
2. Directors and Officers Liability Insuring Clause 3
3. Association Reimbursement Insuring Clause 3
4. Association Wrongful Employment Act
Insuring Clause 3
5. Association Liability Insuring Clause 3
6. Direct Financial Loss of Association
Insuring Clause 3
7. Legal Assistance Insuring Clause 3
8. Tax Audit Fees Insuring Clause 4
Part 2 – Automatic Extensions 4
9. Preamble 4
10. Advancement of Defence Costs and other Loss 4
11. Additional Deductible Limit for Directors,
Officers and Committee Members 4
12. Continuous Cover 5
13. Dishonesty 5
14. New Subsidiaries 5
15. Discovery Period 5
16. Pecuniary Penalties 6
17. Pollution Defence Costs 6
18. Occupational Health & Safety 6
19. Joint Venture Liability of Association 6
20. Official Inquiries 6
21. Estates and Legal Representatives 7
22. Spouses 7
23. Outside Directorships 7
24. Severability and Non-Imputation 7
25. Preservation of Indemnity 7
26. Retirement Cover for Directors and Officers 8
27. Crime Expert Expenses 8
28. Reinstatement of Limit of Indemnity 8
29. Vicarious Liability 8
30. Loss of Documents 8
31. Media Costs 8
32. Court Attendance Reimbursement 8
33. Crisis Management Costs 8
34. Run-off Cover for Subsidiaries 8
Part 3a – General Exclusions (Applicable to allInsuring Clauses Except 6) 8
35. Known Circumstances 8
36. Known Claims 8
37. Retroactive Date 8
38. Dishonesty, Fraud & Information Improper Use 9
39. Bodily Injury & Property Damage 9
40. Breach of Professional Duty 9
41. Occupier's Liability 9
42. Assumed Liability 9
43. Major Shareholders 9
44. Related Parties 9
45. Subsidiary Company 9
46. Consensual Claims 9
47. Rights of Contribution or Indemnity 9
48. Penalties, Liquidated Damages, Punitive,
Exemplary, Aggravated and/or Multiple
Damages for 9
49. Trading Debt 9
50. Insolvency 9
51. Information Technology Hazards Clause 9
52. Pollution 10
53. Geographical Limits 10
54. Jurisdiction 10
55. Asbestos 10
56. Nuclear 10
57. War 10
58. Terrorism 11
Part 3b – Specific Exclusions 11
59. Specific Exclusions From Insuring Clause 4 11
60. Specific Exclusions From Insuring Clause 5 11
61. Specific Exclusions From Insuring Clause 6 12
62. Exclusions For Insuring Clause 8 12
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Part 4 – Claims and Loss Conditions 13
63. Reporting 13
64. Co-Operation and Mitigation 13
65. Conduct of Defence/Representation 13
66. Allocation 14
67. Discharge of Liability 14
68. Claim Settlement 14
69. Senior Counsel 14
70. Representation Issues 14
71. Other Insurance 15
Part 5 – General Conditions 15
72. Limit of Indemnity 15
73. Deductible 15
74. Material Changes to the Risk 16
75. Insolvency 16
76. Cancellation 16
77. Governing Law 16
78. Validity 16
79. Subrogation 16
80. Basis of Settlement for Insuring Clause 6 16
81. GST Basis of Settlement 16
82. Interpretation 17
83. Assignment 17
84. Authorisation 17
85. Territorial Coverage 17
86. Confidentiality 17
Part 6 – Definitions 18
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Professional IndemnityPolicy – AssociationLiability PolicySubject to payment of the premium set out in the
schedule or otherwise agreed, we agree to provide
insurance on the terms in this policy.
Some of the words in this policy have specific meanings,
which are set out in the Definitions Section.
In granting insurance to the association and insured
persons, we have relied upon the material statements
and other detail in the proposal form, its attachments
and any other documentation and or information
provided to us as part of the submission made on behalf
of the association and insured persons in respect of this
insurance and it shall be considered incorporated herein
and the basis of this policy.
Part 1 – What We Insure You For
1. Professional Indemnity Insuring Clause
We will pay to or on behalf of the insured, loss resulting
from any claim first made against the insured and
notified to us during the period of cover, or any applicable
discovery period, based on civil liability for any wrongful
act in the conduct of the professional duties. We agree to
pay defence costs in addition to the limit of indemnity
under this Insuring Clause 1.
2. Directors and Officers Liability Insuring Clause
We will pay to or on behalf of the insured persons loss for
which the insured persons may not be legally indemnified
by the association on account of any claim, which is:
(a) first made against them, jointly or severally, during
the period of cover and notified to us during the
period of cover, or any applicable discovery period,
and is,
(b) by reason of a wrongful act.
3. Association Reimbursement Insuring Clause
We will pay to or on behalf of the association for loss
for which the insured persons may be legally indemnified
by the association on account of any claim, which is:
(a) first made against the insured persons, jointly or
severally, during the period of cover and notified
to us during the period of cover, or any applicable
discovery period, and is,
(b) by reason of any wrongful act.
4. Association Wrongful Employment ActInsuring Clause
We will pay to or on behalf of the association, loss
resulting from any claim first made against the
association and notified to us during the period of cover,
or any applicable discovery period, where such loss is in
respect of or arising out of a wrongful employment act.
Our total liability for all claims under this Insuring Clause
will not exceed in the aggregate the limit of indemnity
specified in the schedule.
5. Association Liability Insuring Clause
We will pay to or on behalf of the association, loss
resulting from any claim first made against the
association and notified to us during the period of
cover, or any applicable discovery period, based on
any wrongful act of the association.
6. Direct Financial Loss of AssociationInsuring Clause
We will pay the association for direct financial loss, first
discovered and notified to us during the period of cover.
direct financial loss is discovered when the association or
one of its directors or officers, not in collusion with the
insured person who committed the dishonest act, first
becomes aware of a dishonest act.
Our total liability for all direct financial loss under this
Insuring Clause will not exceed $50,000 in the aggregate.
7. Legal Assistance Insuring Clause
We agree to pay for up to 30 minutes of legal advice to
the insured from a law firm approved by us in advance,
when the advice relates to a matter insured by this policy.
It does not include advice on the insured’s right
to indemnity under this policy. We are only liable under
this Clause where:
(a) the advice is in respect of a matter that becomes
first known to the insured in the period of cover; and
(b) the advice for each matter takes no longer than
30 minutes, and 2 hours in the aggregate in respect
of all matters; and
(c) the law firm is able to continue acting for us if the
matter leads to litigation.
Nothing communicated to the law firm approved by us
constitutes a notification under this policy, unless
notification is made of that matter under Clause 63.
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8. Tax Audit Fees Insuring Clause
We will pay to or on behalf of the association the
reasonable fees and expenses of any tax expert or other
professional adviser approved by us in advance of their
appointment, where the association incurs such fees and
expenses in that expert or adviser specifically responding
to a tax audit of the association. Provided that:
(a) the notice in respect of the tax audit is first received
by the association, and reported to us, in the period
of cover;
(b) there is no cover for fees and expenses of the
expert or adviser which form part of the fees and
expenses ordinarily charged to the association
for annual services of the same nature;
(c) there is no cover under this Clause for fees and
expenses of an insured person;
(d) we are not liable to meet any such fees and
expenses incurred after completion of the tax audit;
(e) the total amount payable by us in the aggregate in
respect of all tax audits in the period of cover is no
more than $50,000. This sub-limit is part of and not
in addition to the limit of indemnity.
Part 2 – Automatic Extensions
9. Preamble
We agree to provide the cover set out in these
Extensions, for no additional premium, provided that:
(a) the indemnity provided is subject to the schedule,
Exclusions, Conditions, deductible and all other
terms of this policy and the relevant extension;
(b) other than as expressly stated herein, the inclusion
of any policy Extensions shall not increase the limit
of indemnity.
10. Advancement of Defence Costs and other Loss
If it is incurred with our prior written consent, we agree
to advance:
(a) defence costs;
(b) legal representation expenses;
(c) media costs; and
(d) tax audit fees under Insuring Clause 8.
If it is not possible for the insured to obtain our
consent prior to the incurring of defence costs or legal
representation expenses, we will waive prior consent
as long as our consent is obtained within 15 days of the
first of such defence costs or legal representation expenses
being incurred.
The sub-limit of liability for all payments under this
Extension for all insured is $20,000 .This sub-limit is part
of and not in addition to the limit of indemnity (other
than for Insuring Clause 1).
However, if and to the extent that any insured is not
entitled to cover for loss under the terms of this policy,
then we will cease to make any such advances and any
amounts previously advanced shall be repaid to us by
the applicable insured, according to their respective
rights and interests, within 45 days following a request
by us for such repayment.
If a claim alleges a wrongful act, or illegal or improper
conduct, as described in the Clause 38 (Dishonesty,
Fraud & Improper Use), then we will advance defence
costs in respect of such claim until an admission by the
insured, a final judgment or other final adjudication that
such insured did in fact commit such wrongful act or
engage in such conduct.
11. Additional Deductible Limit for Directors,Officers and Committee Members
In accordance with Insuring Clause 2 only and on the
following terms, we agree to pay loss of any insured
person who is a director, officer or committee member
of the association, resulting from a claim for a wrongful
act where the limit of indemnity and any other source
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of indemnification (including but not limited to by the
association or outside entity) or other insurance
(including any policy taken out on behalf of or for
the benefit of such insured person, except policies
specifically excess of this policy) in respect of such
loss has been exhausted.
Our aggregate liability for all loss for all such insured
persons in respect of all such claims shall not exceed
an amount equal to the limit of indemnity.
The cover under this Clause is in addition to, and not
part of, the limit of indemnity under the policy. No
deductible shall apply to this cover. Further, we agree
that this Extension cannot be cancelled by the
association.
12. Continuous Cover
Where a claim that would otherwise be covered by this
policy is excluded by Clause 35 (Known Circumstances),
then we will provide cover under this policy, on the
basis that:
(a) the insured first became aware of the fact, event,
circumstance or wrongful act giving rise to the
claim before the period of cover; and
(b) the insured was at the time, and has since been
continuously, insured by us against the wrongful
act when the insured first became aware of such
fact, event, circumstance or wrongful act; and
(c) this policy is a replacement or renewal of the policy
on foot with us when the insured first had the
awareness referred to above; and
(d) there has been no fraudulent non-disclosure or
fraudulent misrepresentation by the insured; and
(e) no claim has been made against the insured prior to
the period of cover arising from or connected to the
subject or any related fact, event, circumstance or
wrongful act.
The cover provided under this Extension will be in
accordance with this policy, unless the terms of this
policy are more favourable than our policy on foot at the
time when the insured first became aware of the fact,
event, circumstance or wrongful act. In such situation,
the terms of that prior policy will apply, including but
not limited to the limit of liability and excess under that
earlier policy.
13. Dishonesty
Notwithstanding Clause 38 (Dishonesty, Fraud &
Information Improper Use), Insuring Clause 1 is
extended to cover claims resulting from any dishonest,
fraudulent, criminal or malicious act or omission by any
insured person in the conduct of the professional duties.
This Extension does not require us to indemnify any
insured person who has committed such conduct or
who has condoned any such conduct.
In determining whether under Insuring Clause 1,
Clause 38 (Dishonesty, Fraud & Information Improper
Use) applies to a claim against the association, any state
of mind or knowledge possessed by any past or present
chairman of the board or management committee,
chief executive officer, director, chief operating officer or
chief financial officer of the association will be imputed
to the association.
14. New Subsidiaries
If, during the period of cover, the association acquires
or creates a new subsidiary that has total assets that are
no greater than the total assets of the association, then
the definition of association will be extended to include
the new subsidiary. However, cover only applies in
respect of wrongful acts (for the purposes of Insuring
Clauses 1-5) or any dishonest or fraudulent act (for the
purpose of Insuring Clause 6) alleged to have been
committed subsequent to the acquisition or creation
of such subsidiary.
Measurement of ‘total assets’ as referred to in this
extension shall be by reference to the most recent
financial statements of the new subsidiary and
association respectively as at the time of acquisition
or creation of the new subsidiary.
Notwithstanding anything in the policy, the definition
of association does not include any new subsidiary
acquired or created by the association that is domiciled
or incorporated in the United States of America or
Canada or their respective territories.
15. Discovery Period
If we refuse to offer any renewal terms for this policy at
the end of the period of cover for any reason other than
non-payment of premium, then the association or any
insured person shall be entitled to purchase a discovery
period for a period of 12 months upon payment of the
premium set out in the schedule.
If a transaction occurs, the association and the insured
persons do not have any right to purchase the discovery
period specified above, however, the association does
have the right, within 30 days of the end of the period of
cover or the transaction becoming effective, to request an
offer from us for a discovery period. We may, but are not
obliged to, offer a discovery period on such terms and
conditions as we may decide at our discretion. The
provision of a discovery period is conditional upon:
(a) the association’s or the insured person’s written
request for its purchase within 30 days following
the end of the period of cover or the effective date of
the transaction as applicable; and
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(b) payment of the additional premium within 30 days
of the expiry of our request; and
(c) this policy not being replaced by any other policy or
policies affording substantially the same cover as
this policy.
If a discovery period is effected, the limit of indemnity shall
not be increased in any way. A discovery period may not
be cancelled by the association and the additional
premium for a discovery period is not refundable.
16. Pecuniary Penalties
Insuring Clauses 2, 3, 4 and 5 are extended to cover
as loss, to the extent permitted by law, any pecuniary
penalties imposed in the jurisdictions of and under
the laws of Australia and New Zealand upon the
insured based on wrongful acts, except for any pecuniary
penalties:
(a) which are uninsurable at law or are imposed
in respect of conduct the insurance of which
is against public policy; or
(b) arising directly or indirectly from a requirement to
pay taxes, duties, rates, levies, charges, fees or any
other revenue raising measure; or
(c) imposed where the insured knew, or where a
reasonable person ought reasonably to have
known, prior to the period of cover that the insured
had committed an offence under a law; or
(d) as a result of further wrongful acts committed after
the insured first knew, or where a reasonable
person in the circumstances ought reasonably to
have known, that the insured had contravened a
law and committed an offence pursuant to that
law, and which led to the imposition of increased
or additional pecuniary penalties; or
(e) imposed pursuant to any law regulating air,
marine or vehicular traffic.
In the event of any conflict between this Extension and
the Bodily Injury and Property Damage Exclusion, or the
Pollution Exclusion, this Extension shall apply.
Our total liability under this Extension will not exceed in
the aggregate $10,000. This sub-limit is part of and not in
addition to the limit of indemnity.
17. Pollution Defence Costs
We will pay to or on behalf of any insured person, defence
costs in respect of any claim, or legal representation
expenses in respect of an official inquiry, otherwise
excluded by Clause 52 (Pollution).
The sub-limit of liability for all payments under this
Extension in the aggregate is $50,000 This sub-limit is
part of and not in addition to the limit of indemnity. The
cover provided under this Extension will only apply to
claims made, or Official inquiries commenced, in the
jurisdictions of Australia or New Zealand and pursuant
to the laws of Australia or New Zealand.
18. Occupational Health & Safety Defence Costs
Notwithstanding Clause 39 (Bodily Injury and Property
Damage), under Insuring Clauses 1 and 2 we will pay
defence costs of an insured person in respect of any claim
for an alleged wrongful act, or legal representation
expenses of an insured person in respect of an official
inquiry, involving conduct which if established would
constitute a breach of Occupational Health and Safety
legislation.
This Extension provides cover in respect of alleged
workplace manslaughter and industrial or workplace
deaths.
The sub-limit for this extension for all payments in the
aggregate in respect of all claims and all Official Inquiries
for all insured persons is $50,000. This sub-limit is part of
and not in addition to the limit of indemnity.
19. Joint Venture Liability of Association
Insuring Clause 1 is extended to cover claims resulting
from the association’s participation in any joint
venture in connection with the professional duties.
Provided that:
(a) the cover given will only relate to the association’s
proportion of any liability incurred by such joint
venture; and
(b) the insured’s income derived from participation in
such joint venture shall have been included in the
calculation of income furnished by the insured for
the purposes of calculating the premium for this
policy.
20. Official Inquiries
We will pay legal representation expenses on behalf of the
insured in respect of any official inquiry for which the
notice or process compelling the attendance of the
insured is first served in the period of cover or
an applicable discovery period. If the association does not
indemnify the insured person(s) for the legal
representation expenses, no deductible shall apply to this
Extension.
If there is an entitlement to payment under the
Occupational Health and Safety Defence Costs Extension
or the Pollution Defence Costs Extension, then there is
no entitlement to payment under this Extension.
Our total liability under this Extension in respect of all
insured for all Official Inquiries will not exceed, in the
aggregate $50,000. The cover under this Extension is part
of the limit of indemnity and not in addition to it.
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21. Estates and Legal Representatives
With respect to Insuring Clauses 1, 2 and 3, we will pay
loss for any claim first made against the estates, heirs,
legal representatives or assigns of any deceased,
incompetent, insolvent or bankrupt insured person,
provided that the claim:
(a) arises directly from a claim made against the
insured person which is covered under the policy;
and
(b) is made solely by reason of their status as estates,
heirs, legal representatives or assigns of the
deceased, incompetent, insolvent or bankrupt
insured person.
22. Spouses
With respect to Insuring Clauses 1, 2 and 3, we will pay
loss for any claim first made against the lawful spouse or
domestic partner of any insured person during the period
of cover, provided that the claim arises directly from a
claim made against the insured person which is covered
under the policy and is made solely by reason of the
spouse’s or domestic partner’s:
(a) status as such; and
(b) ownership interest in any real or personal property
against which the claimant seeks recovery for an
alleged wrongful act of the insured person.
23. Outside Directorships
Where an insured person holds an outside directorship:
(a) at the commencement of the period of cover, in any
organisation listed in the schedule; or
(b) enters into it during the period of cover with an
organisation.
We will provide cover under Insuring Clauses 2 and 3 for
any claim where such insured person is not otherwise
entitled to an indemnity under any other policy of
insurance arranged by the organisation either because
such a policy was not in force at the relevant time or
such a policy fails to respond for any reason whatsoever
including the organisation’s insolvency or exhaustion
of the policy limits.
Provided always that:
(a) such indemnity will not extend to any of the other
directors, officers or employees of the organisation;
and
(b) no indemnity whatsoever is available to the
organisation under this policy; and
(c) indemnity under this extension shall be non-
cumulative with any other insurance issued by us;
and
(d) for the purposes of this Extension only and for no
other purpose, the terms, Exclusions and/or
Conditions of this policy apply as if the terms
association and insured include organisation; and
(e) the period of cover in respect of claims arising
under (b) above shall cease at the earlier of forty-
five (45) days commencing from the appointment
of the outside directorship or the date otherwise
provided by the terms of this policy, unless in the
case of the former:
(i) notification of the appointment has been given
in writing to us, and we have the right to
request additional information and to charge
an additional premium; and
(ii) we have agreed to include the organisation.
24. Severability and Non-Imputation
We agree that any conduct on the part of any insured
person, whereby such person breached the duty of
disclosure or made a misrepresentation to us before this
contract was entered into, or failed to comply with a
term of this policy, shall not prejudice the right of any
other insured person to indemnity under the policy.
Provided that such other insured person:
(a) is innocent of and has no prior knowledge of any
such conduct; and
(b) shall immediately upon becoming aware of any
such conduct advise us in writing of all known facts
in relation to such conduct.
Nothing in this Extension relieves any insured from
the duty or disclosure owed to us.
However, any state of mind or knowledge possessed
by any past or present chairman of the board or
management committee, chief executive officer, director,
chief operating officer or chief financial officer of the
association will be imputed to the association.
25. Preservation of Indemnity
If, for the purposes of Insuring Clause 3, an insured person
is unable to satisfy a right to indemnity against the
association in respect of a claim or official inquiry, by
reason only of the association being placed in liquidation
or other external administration (other than voluntary
liquidation or administration) and having insufficient
funds available so to indemnify the insured person, then
we shall indemnify the insured person in accordance with
Insuring Clause 2 of this policy to the extent, less the
deductible, that the insured person is unable to satisfy the
right to indemnity against the association.
Provided that the burden of adducing satisfactory proof
to obtain the benefit of this extension shall rest entirely
with the insured person and shall include the production
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of documentary evidence of the association’s assets and
liabilities and such other information as we shall require.
26. Retirement Cover for Directors and Officers
If the association does not renew this policy or replace it
with any other insurance providing directors and officers
liability coverage and a discovery period does not arise or
has not been purchased, then any insured person who is
a director or officer will be automatically entitled to a 12
month discovery period at no additional premium after
the expiry of the period of cover provided that such
insured person retired from all employment or office
prior to the expiry of the period of cover.
27. Crime Expert Expenses
Where cover exists for direct financial loss under Insuring
Clause 6 we will also indemnify the association for
reasonable expenses incurred and paid by it to an expert
for the purpose of establishing the existence and
amount of the direct financial loss covered under Insuring
Clause 6.
The sub-limit of liability for all payments under this
Extension is $20,000. This sub-limit is part of and not in
addition to the limit of indemnity. No deductible shall
apply to this Extension.
28. Reinstatement of Limit of Indemnity
In respect of Insuring Clause 1 only, where the limit of
indemnity is eroded (partially or totally) as a result of the
payment of any earlier and separate claim(s), we agree to
reinstate limit of indemnity. However the aggregate of all
such reinstatements in connection with all further claims
will not exceed a total amount equal to the limit of
indemnity, inclusive of all defence costs, in respect of
such further claim(s). Such reinstatements are only
available where the subsequent claim(s) is/are separate
from and totally unrelated to those which gave rise to the
erosion or exhaustion of the original limit of indemnity.
Further, this Extension does not apply until the insured
have exhausted the limit(s) of any policy which is in
excess of the original limit of indemnity under this policy,
other than any similar reinstatement provisions under
such excess policies.
29. Vicarious Liability
Insuring Clause 1 covers the acts, errors or omissions of
sub-contractors and consultants, but only in respect of
the insured’s civil liability for Professional wrongful acts
in the conduct of the professional duties provided by the
sub-contractor and/or consultant on behalf of the
insured. Cover will not extend to the sub-contractor
and/or consultant who committed the act, error or
omission.
30. Loss of Documents
Under Insuring Clause 1, we agree to pay costs and
expenses incurred by the association in replacing or
restoring lost or damaged documents for which the
association is legally responsible if:
(a) the documents cannot be located after a diligent
and thorough search, or they have been destroyed
or damaged;
(b) the loss of the documents is first discovered and
notified to us during the period of cover;
(c) the association provides us with evidence
substantiating the costs and expenses incurred
by the association in replacing or restoring the
documents; and
(d) we approve the bills and accounts.
Our total liability under this extension for any one claim
and in the aggregate from all claims during the period of
cover shall not exceed the limit of indemnity specified in
the schedule.
31. Media Costs
We agree to pay media costs of any insured against which
or whom a claim is made and which is covered by the
policy. The sub-limit of liability for all payments in the
aggregate for all claims under this Extension is $20,000.
This sub limit is part of and not in addition to the limit
of indemnity.
32. Court Attendance Reimbursement
Where an insured person is legally compelled to attend
Court to give evidence in connection with a claim covered
by this policy, we agree to pay a daily amount of $250 in
respect of that insured person’s attendance. The sub-limit
of liability for all payments in the aggregate under this
Extension is $20,000 in respect of all insured persons for
all attendances. No deductible applies to this Extension.
This sub-limit is part of and not in addition to the limit of
indemnity.
33. Crisis Management Costs
We agree to pay to or on behalf of the association the
reasonable costs and expenses paid by the association for
external crisis management services provided in
response to a crisis within the first 30 days after the crisis.
The entity or person providing the services, and their fees
and expenses, must first be approved by us. We are not
liable for any fees and expenses incurred by the
association without our prior approval, not to
be unreasonably withheld.
The sub-limit of liability for this Extension for all such
costs and expenses in respect of all crises, is $50,000 and
is part of and not in addition to the limit of indemnity.
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34. Run-off Cover for Subsidiaries
In the event of the sale, dissolution or disposal of a
covered subsidiary before or after the commencement of
the period of cover of a subsidiary, we will pay:
(a) loss for any wrongful act in respect of that subsidiary
for a wrongful act committed while the entity was a
subsidiary and prior to its sale, dissolution or
disposal;
(b) legal representation expenses for any official inquiry
in respect of conduct committed while the entity
was a subsidiary and before its sale, dissolution or
disposal;
(c) direct financial loss for dishonest conduct committed
while the entity was a subsidiary and prior to its
sale, dissolution or disposal and which is otherwise
covered by this policy,
where such insured is not otherwise entitled to an
indemnity under any other policy of insurance.
Part 3a – General Exclusions (Applicableto all Insuring Clauses Except 6)
This policy does not provide any indemnity for any loss in
respect of any claim or official inquiry:
35. Known Circumstances
Arising from, any fact, situation or circumstances which:
(a) an association knew before this policy began; or
(b) a reasonable person in the association’s
professional position would have thought before
this policy began,
might result in someone making an allegation against
the association in respect of a liability, that might be
covered under this policy.
36. Known Claims
The possibility of which was intimated in any way to the
insured prior to the commencement of the period of
cover. An intimation of a claim includes, whether in
writing or otherwise, but is not limited to:
(a) a complaint or allegation of any conduct that
might give rise to any relief, whether or not giving
or potentially giving rise to loss or damage; and
(b) a complaint or allegation of any wrongful act.
37. Retroactive Date
Arising from, attributable to or in any way connected
with any wrongful act or other conduct occurring in
whole or part prior to the retroactive date.
38. Dishonesty, Fraud & Information Improper Use
Arising directly or indirectly out of or in any way
connected with:
(a) any wilful, reckless, dishonest, fraudulent, criminal
or malicious conduct by such insured; or
(b) any intentional or wilful breach of any statute,
contract or duty by such insured; or
(c) any insured having gained any personal advantage
to which he/she was not legally entitled; or
(d) any improper use of information acquired by the
insured, by virtue of an insured person’s position
with the association, to gain directly or indirectly
any advantage, personally or for the association or
for another person, to which any of them was not
legally entitled; or
(e) any conduct referred to in 38(a) to 38(d) above by
any other person, which conduct the insured at any
time condoned or became aware of prior to the
commencement of the period of cover.
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39. Bodily Injury & Property Damage
Arising from, attributable to or in any way connected
with bodily Injury or property damage. This Exclusion
does not apply to any claim based on a wrongful
employment act to the extent it alleges mental injury,
mental anguish or emotional distress, or to Clause 18
(Occupational Health and Safety).
40. Breach of Professional Duty
Arising from, attributable to or in any way connected
with any breach or alleged breach of duty or contract,
or error or omission, relating to the rendering or failure
to render services and/or advice in the conduct of the
professional duties. This exclusion does not apply to
Insuring Clause 1.
41. Occupier’s Liability
Arising from, attributable or in any way connected with
the ownership, occupation, control or management of
real property by an insured.
42. Assumed Liability
Arising from, attributable to or in any way connected
with any duty, obligation or liability assumed by the
insured by contract, warranty, guarantee or indemnity,
unless such duty, obligation or liability would have
existed in the absence of such assumption.
43. Major Shareholders
Directly or indirectly brought or maintained by or on
behalf of any shareholder in the association, a subsidiary
company or an organisation:
(a) where, at the time of the wrongful act, such
shareholder held (15%) fifteen percent or more of
the issued capital of the policyholder, subsidiary
company or organisation either directly or
beneficially; or
(b) where, at the time of the wrongful act, the
shareholder had the entitlement to vote at a board
meeting of the association or such subsidiary
company or organisation.
44. Related Parties
Made, brought or maintained by or on behalf of any
person or entity who or which is related to or associated
with any insured, unless such person or entity is acting
without any prior direct or indirect solicitation, co-
operation or assistance from any insured.
45. Subsidiary Company
Arising directly or indirectly out of or in connection
with any wrongful act committed by an insured person
while acting on behalf of any entity after the effective
date such entity ceased to be a subsidiary company or was
deregistered.
46. Consensual Claims
Made, brought or maintained by or on behalf of any
person or entity with the solicitation, co-operation or
assistance of any insured.
47. Rights of Contribution or Indemnity
In connection with which the insured has at any time
foregone, waived, excluded or limited any right of
indemnity or recovery.
48. Penalties, Liquidated Damages, Punitive,Exemplary, Aggravated and/or MultipleDamages for:
(a) exemplary, aggravated, punitive or liquidated
damages, and/or any additional damages resulting
from the multiplication of compensatory damages;
or
(b) fines or penalties, other than as covered under
Clause 16 (Pecuniary Penalties); or
(c) in connection with income tax, customs duties,
excise duty, sales tax, goods and services tax or any
other State or Federal tax or duty.
49. Trading Debt
For, arising from, attributable to or in any way connected
with any trading or business debt incurred by the
association, subsidiary company or organisation or
any guarantee given by an insured for any debt.
50. Insolvency
In respect of Insuring Clauses 1 and 5, first made or
intimated subsequent to the date upon which the
insured becomes insolvent. Provided always that this
Exclusion shall not apply where the insured establishes,
to our satisfaction that the claim would have arisen
notwithstanding that the insured was insolvent.
51. Information Technology Hazards Clause
Arising from, attributable to or in any way connected
with:
(a) loss, corruption or destruction of data, coding
programme or software, unless covered under
Clause 30 (Loss of Documents) and/or;
(b) unavailability of data and malfunction of
hardware, software and embedded chips.
52. Pollution
Arising from, attributable to or in any way connected
with the actual, alleged or threatened dispersal, release
or escape of pollutants into or upon real or personal
property, the atmosphere, any water course or body of
10
water, including but not limited to 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.
53. Geographical Limits
Arising from, attributable to or in any way connected
with any conduct occurring, in whole or part in the
United States of America and Canada, or their respective
territories and possessions.
54. Jurisdiction
Brought in a court outside the Commonwealth of
Australia or of New Zealand, or brought in a court within
the Commonwealth of Australia or of New Zealand, to
enforce a judgement handed down in a court outside
of the Commonwealth of Australia or of New Zealand.
55. Asbestos
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.
56. Nuclear
Directly or indirectly arising from, attributable to or
in any way connected with ionising radiation or
contamination by radioactivity from any nuclear fuel,
weapon, medical isotope, waste or other material
whether occurring naturally or otherwise, or by the
radioactive, toxic, explosive or other hazardous
properties of any explosive nuclear assembly or
nuclear component thereof.
57. War
Arising from, attributable to or in any way connected
with war, invasion, acts of foreign enemies or hostilities
(whether war be declared or not), civil or military
uprising, or usurped power, insurrection, revolution,
rebellion, or confiscation or requisition or nationalisation
or destruction of or damage to property by or under the
order of any local government or public or local
authority.
58. Terrorism
Directly or indirectly caused by, contributed to by,
resulting from or arising out of or in any way connected
with any:
(a) act of terrorism, as defined herein; and
(b) action in controlling, preventing, suppressing,
retaliating against, or responding to any act of
terrorism,
regardless of any other cause or event contributing
concurrently or in any other sequence.
An 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 any 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:
(a) involves violence against one or more persons; or
(b) involves damage to property; or
(c) endangers life other than that of the person
committing the action; or
(d) creates a risk to health or safety of the public or a
section of the public; or
(e) is designed to interfere with or to disrupt an
electronic system.
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Part 3b – Specific Exclusions
59. Specific Exclusions From Insuring Clause 4
In addition to the General Exclusions, we will not pay for
any loss in respect of any claim:
(a) for or in connection with employment benefits;
(b) any amount not indemnified by the association for
which any insured is absolved from payment by
reason of any covenant, agreement or court order;
(c) for or in connection with an allegedly unfair
contract of employment;
(d) the cost of complying with any injunctive or other
non-monetary relief or any agreement to provide
any such relief;
(e) costs incurred by any insured to make any
accommodation in respect of working practices or
otherwise on the basis of a person’s disability or
family responsibilities or as may be required under
any law relating anti-discrimination.
60. Specific Exclusions From Insuring Clause 5
In addition to the General Exclusions, we will not pay for
any loss in respect of any claim or official inquiry:
(a) arising from or attributable or related to violation
of any law, rule or regulation relating to
competition, activities in restraint of trade, or
deceptive acts and practices in trade and
commerce;
(b) in respect of any misappropriation, plagiarism or
infringement of any trade mark, trade secret,
patent, copyright or any other intellectual property
rights;
(c) arising out of a violation of any responsibilities,
obligations or duties protecting or regulating any
superannuation, pension or similar fund;
(d) for or in connection with a wrongful employment
act;
(e) for or in connection with any workers’
compensation, occupational or workplace health
and safety, disability benefits, unemployment
benefits or compensation, unemployment
insurance, retirement benefits, social security
benefits or any similar law, regulation or rule;
(f) in respect of the insured’s manufacture,
distribution or sale of products, or the recall of
products manufactured, distributed or sold by
the insured.
61. Specific Exclusions From Insuring Clause 6
In addition to the General Exclusions (where applicable),
with respect to Insuring Clause 6 (Association Direct
Financial Loss) we will not indemnify for:
(a) any direct financial loss the proof of which is solely
dependent on a profit and loss computation, or on
a comparison of inventory records with an actual
physical count. However, where the direct financial
loss results from or is suspected of resulting from
an identified insured person, a comparison of
inventory records with an actual physical count
can be relied on as partial evidence in support of
the direct financial loss claimed;
(b) any direct financial loss arising from the accessing
and dissemination of any confidential information,
including but not limited to patents, trade marks,
copyrights, customer information, computer
programs and trade secrets;
(c) any direct financial loss arising from any dishonest
act committed after any director or officer has
become aware of a previous dishonest act. This
exclusion does not apply if the director or officer
who discovers such acts is in collusion with the
insured person who commits the relevant
dishonest act;
(d) consequential loss of any nature, including but not
limited to liabilities to third parties, costs of
instituting or defending proceedings, costs of
establishing an entitlement to cover under
Insuring Clause 6 (other than those under Clause
27) or penalties of any kind;
(e) any direct financial loss arising out of any dishonest
act occurring in the United States of America and
Canada, or their respective territories and
possessions;
(f) any direct financial loss discovered before or after
the period of cover;
(g) any direct financial loss arising from any:
(i) dishonest act committed by an insured person
who prepares cheque requisitions and also
has cheque signing authority;
(ii) cheques over AUD5000 that are not
countersigned;
(iii) bank fund transfers or wired funds not dually
authorised;
(iv) dishonest act committed by an insured person
who reconciles monthly bank statements who
also handle deposits, or has access to cheque
signing machines, or signature plates or has
cheque signatory authority.
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62. Exclusions For Insuring Clause 8
In addition to the General Exclusions, under Insuring
Clause 8 we will not pay for any such costs or
expenses where:
(a) the association has not lodged the relevant return
and paid all due amounts within the time required
by law;
(b) such costs and expenses were incurred because
of a failure to respond to the tax audit within the
required timeframe;
(c) the association has failed to fully declare all
relevant assets, income and liabilities in
submitting the applicable return;
(d) such costs and expenses arise from or are in
respect of a dishonest or fraudulent return
(including but not limited to knowingly false
documents), deliberate tax evasion or a criminal
investigation or prosecution;
(e) the return has been lodged outside Australia or
the tax audit is in respect of a person ordinarily
resident outside Australia;
(f) the tax audit was known to the insured (or its
agent), to be impending, before the period of cover;
(g) such costs and expenses are incurred in relation to
a tax minimisation scheme disallowed by any
relevant authority.
Part 4 – Claims and Loss Conditions
63. Reporting
The insured must give to us immediate notice in writing
of any claim against them or loss for which the insured
may seek indemnity under the policy. Such notice shall
be within the period of cover and sent to The Claims
Manager, Allianz Australia Insurance Limited, 2 Market
Street, Sydney, New South Wales 2000 .
For any claim under Insuring Clause 6 of this policy, the
association must give written notice to us of any direct
financial loss not later than 60 days after any direct
financial loss is first discovered. The association must, at
its own cost, also provide us with affirmative proof of the
direct financial loss (with full particulars within 3 months
of notification) and provide us with all requested
information and documents.
64. Co-operation and Mitigation
The insured shall not make any offer or payment or
admit liability for or settle any claim or incur any costs or
expenses or otherwise assume any liability or obligation
in connection therewith, or any loss for which indemnity
is sought under the policy, without our written consent.
The insured shall not forego, waive, exclude or limit any
rights of indemnity or recovery.
The insured shall, at their own cost, diligently do all
things reasonably practicable to avoid or minimise any
loss or liability hereunder.
We shall not be liable for any loss, settlement or other
liability assumed, or costs and expenses incurred by the
insured without our written consent and any offer,
payment, admission, loss, settlement made or costs or
expenses incurred without such consent shall not be loss.
The insured shall, at its/their own cost, immediately
provide to us such assistance and information as we may
reasonably require to enable us to determine whether or
not the insured is entitled to an indemnity under this
policy, and to enable us to investigate and defend any
claim, including representation of any insured person at
an official inquiry, or investigate any other claim for
indemnity under the policy.
65. Conduct of Defence/Representation
We shall be entitled at any time to take over and conduct
in the name of the insured the investigation, defence
and/or settlement of any claim or representation at an
official inquiry.
If we assume the conduct of the defence of a claim or
representation at an official inquiry, or the insured is
permitted by us to incur defence costs or legal
representation expenses, and we carry out any
investigation regarding such claim or official inquiry
13
without prejudice to the question of indemnity until
sufficient facts and information are available to make a
decision on the question of indemnity, this does not:
(a) indicate an insured is entitled to indemnity under
the policy; or
(b) waive or prejudice our rights (if any) under
the policy.
66. Allocation
Where any liability or amount has been jointly, or jointly
and severally, incurred as between any insured and any
other uninsured person (including the association or a
subsidiary), our liability under this policy shall be the
proportion of that liability or amount which represents
a fair and equitable allocation between the covered
insured and the other person(s), taking into account the
relative legal and financial exposures of, and the relative
benefits obtained in any settlement by, the covered
insured and the other person(s) in or as a result of the
claim or official inquiry.
Where any liability or amount is incurred in respect of
any claim or Inquiry which arises from both matters
covered and matters not covered by this policy, our
liability under this policy is limited to the proportion of
the liability or amount which represents a fair and
equitable allocation taking into account the relative legal
and financial exposures attributable to covered matters
and matters not covered under this policy.
If the parties are unable to agree on a fair and equitable
allocation, then such allocation is to be determined by a
Queen’s or senior counsel (to be mutually agreed upon by
the parties, or in the absence of agreement, to be
appointed by the President of the Bar association, or
equivalent organisation, in the jurisdiction in which the
liability or amount was incurred). The costs of the
Counsel are to be treated as defence costs.
The Counsel is:
(a) to determine the fair and equitable allocation as an
expert, not as an arbitrator. We and the insured
may make submissions to the Counsel;
(b) not limited to a consideration of such submissions
and is to determine the fair and equitable
allocation in his or her own judgment and opinion.
Such determination shall be final and binding.
While the proportion of defence costs or legal
representation costs to be advanced under the policy
remains disputed and undetermined, we shall advance
that proportion of defence costs/legal representation
expenses which we consider represents a fair and
equitable allocation. The allocation finally agreed or
determined shall be applied retrospectively to any
defence costs/legal representation expenses incurred prior
to agreement or determination but shall not be a
presumption as to other loss covered by the policy.
67. Discharge of Liability
If in our opinion the amount required to dispose of any
claim under any Insuring Clause other than Insuring
Clause 1 may exceed the available limit of indemnity, we
shall be entitled, at our discretion, to discharge our
liability by paying (or agreeing to pay upon settlement of
the claim) the available limit of indemnity remaining after
paying the defence costs incurred up to the time of
election to discharge our liability to the insured or on the
insured’s behalf. If at the time of making such an election
we are conducting the defence of the claim, we shall
relinquish conduct. We shall have no further liability
whatsoever under the policy.
68. Claim Settlement
If the insured disagrees with a claim settlement
recommended by us, the insured may elect to contest
such claim. However, our liability in respect of the
claim shall not exceed the amount for which the claim
could have been so settled plus the defence costs and any
other covered loss incurred up to the date of such
election, less the deductible, subject always to the limit of
indemnity and the pro rata costs provisions in Clause 72
relating to Insuring Clause 1.
69. Senior Counsel
If a dispute arises between us and insured as to whether
or not to contest any claim, neither we nor the insured
shall be required to contest such claim unless a senior
counsel (to be mutually agreed upon by us and the
insured or, failing agreement, the President of the Law
Society or equivalent body in the State where claim is
being heard or defended) shall advise that such claim
should be contested. Senior counsel shall advise having
regard to the economics of the matter, the damages and
costs which are likely to be recovered against the insured
and the likely defence costs that will be incurred in
defending the claim and the prospects of successfully
defending the claim. The costs of senior counsel so
advising shall be defence costs and be part of and not
in addition to the limit of indemnity. However, no
deductible shall apply to those defence costs.
70. Representation Issues
The solicitors instructed by us to act on the insured’s
behalf can disclose to us any information they receive
in that capacity, whenever and from wherever it is
obtained. The insured agrees to waive any legal
professional or client privilege to the extent such
privilege may have prevented disclosure to or use of that
information by us. By claiming under this policy the
insured authorises such solicitors to disclose this
14
information to us and waives such claims for legal
professional or client privilege as against us.
The lawyers appointed by us to conduct the defence of
the claim shall also continue to advise us on all issues,
including but not limited to the right of the insured to
indemnity under the policy or any related issue. It is
agreed that this will not prevent those lawyers from
acting in good faith on the defence of the claim on our
instructions.
If any actual or potential conflict arises between the
respective interests of the insured and us, the lawyers
appointed by us to investigate and defend the claim may
cease acting on behalf of the insured and continue to
advise us in any dispute with respect to the entitlement
of the insured to indemnity under the policy.
The insured agrees that all communications between us
and the lawyers appointed by us to investigate, defend or
settle a claim are privileged as between us and the
lawyers and that the insured is not entitled to demand,
access or obtain any such communications or
information contained therein.
71. Other Insurance
To the extent permitted by the Insurance Contracts Act
1984, this policy will only cover loss to the extent that the
amount of such loss is in excess of any indemnity or
cover available to the insured in respect of that loss under
any other policy entered into by the insured.
To the extent permitted by the Insurance Contracts Act
1984, this policy will only cover loss to the extent that the
amount of such loss is in excess of any indemnity
or cover available to the insured in respect of that loss
under any other policy effected on behalf of the
insured or under which the insured is a beneficiary
(but not a policy to which to which the preceding
paragraph applies).
Neither of the two preceding paragraphs applies to
such other insurance that is written only as specific
excess insurance over the limit of indemnity provided
in this policy.
If such other insurance is provided by us, or any other
member company, associate or affiliate of Allianz SE,
and it covers a loss covered by this policy in respect of
a claim or official inquiry, the limit of indemnity under this
policy in respect of that claim or official inquiry shall be
reduced by any amount paid by us (or member
company, associate or affiliate of Allianz SE) under such
other insurance.
Part 5 – General Conditions
72. Limit of Indemnity
Subject to the following provisions, our total liability
under this policy shall not exceed the limit of indemnity in
respect of:
(a) all loss in respect of any one claim, including but
not limited to defence costs; and
(b) all loss and for all claims and all insureds, in the
aggregate, including but not limited to defence
costs and other amounts paid or payable under this
policy.
For all purposes of the policy, all claims arising from or
attributable to the same wrongful act or conduct, are
deemed to be one claim. All claims arising from or
attributable to a series of related wrongful acts or other
related conduct are deemed to be one claim. For the
purpose of this Clause, official inquiry is deemed to be
a claim, even if there is no wrongful act alleged.
In addition to the limit of indemnity, we will pay:
(a) under Insuring Clause 1 only, defence costs,
provided that:
(i) where the insured’s liability under Insuring
Clause 1 exceeds the available limit of
indemnity, we shall only pay such proportion
of the defence costs as the available limit of
indemnity bears to the insured’s liability; and
(ii) where the amount we have paid or incurred
as defence costs exceeds the share that we are
obliged to pay under 10.1 (a), the insured shall
upon demand pay to us the excess amount.
Alternatively, we may deduct the excess
amount from any entitlements the insured
may have under this policy.
(b) under Clause 28 (Reinstatement of limit
of indemnity for Insuring Clause 1 only), the
reinstatement(s) up to an amount equivalent
to the limit of indemnity on the terms of that
Extension;
(c) under Clause 11 (Additional Deductible Limit for
Directors, Officers and Committee Members), the
additional excess limit of indemnity on the terms of
that Extension.
73. Deductible
Our liability under this policy shall apply only to that part
of the amount, up to the available limit of indemnity
(including defence costs), required to dispose of a claim,
which exceeds the deductible. Such deductible shall be
borne by the insured and shall remain.
15
The deductible applies to each claim covered by this
policy. Where more than one claim arises from or is
attributable to the same wrongful act or other conduct, or
series of related wrongful acts or other related conduct,
only one deductible is payable under the relevant
Insuring Clause.
If a payment required to dispose of a claim does not
exceed the deductible, that part of the deductible not
required to dispose of such claim shall be applied to the
defence costs otherwise paid or payable by us and such
amount shall be paid by the association and/or insured
persons to us or at our direction on request.
Where we make a payment in respect of a claim,
including for defence costs, which includes payment of
part or all of the deductible, the insured shall within 30
days of being notified by us reimburse us for the amount
of the deductible paid by us on behalf of the insured.
74. Material Changes to the Risk
The insured shall immediately advise us of any material
alteration to the association’s business including but not
limited to:
(a) any change in the nature of the services
comprising the business; or
(b) any transaction; or
(c) the association or subsidiary company going into
bankruptcy, administration, receivership,
liquidation or any external administration; or
(d) the association or subsidiary company entering into
a scheme of arrangement, debt agreement or
arrangement with creditors; or
(e) the cancellation or suspension of, or the imposing
of special conditions upon, the insured’s statutory
professional registration or licensing or
registration with a professional association.
75. Insolvency
If, during the period of cover, any of the following
events occur:
(a) the association going into bankruptcy,
administration, receivership, liquidation or any
external administration; or
(b) the association entering into a scheme of
arrangement a debt agreement or other
arrangement with creditors,
then this policy will remain in force until the expiry of the
period of cover, but only in respect of claims arising from
wrongful acts, or direct financial loss resulting from
dishonest acts, preceding the date and time when such
events occurred. There is no other cover under the policy.
76. Cancellation
This policy may be cancelled by the insured giving written
notice to us at any time. This policy may be cancelled by
us in accordance with the Insurance Contracts Act
(1984).
Upon cancellation by the insured a refund of premium
will be allowed, pro-rata less 15%, for the unexpired
portion of the period of cover.
77. Governing Law
This policy is to be governed in by the laws of Australia
and the State or Territory where the policy was issued.
The relevant courts of the place where the policy was
issued shall have exclusive jurisdiction in any dispute
concerning or under this policy.
78. Validity
This policy is not valid unless its schedule is attached and
which a duly authorised officer on our behalf has signed.
79. Subrogation
Where we pay loss under this policy, we are entitled
to any rights the insured may have in respect of that
payment. The insured must, at its own cost, co-operate
and assist us in exercising those subrogated rights.
80. Basis of Settlement for Insuring Clause 6
For any direct financial loss covered under this policy, we
are not liable for more than:
(a) the actual market value of securities and money
at the close of business on the day the direct
financial loss was first discovered (determined
by the value published in the Australian Financial
Review), or the actual cost of replacing the
securities and money, whichever is less;
(b) the actual cash value of other tangible property
(not referred to in (a) above) at the close of
business on the day the direct financial loss was first
discovered, or the actual cost of replacing the
property with property of like quality or value,
whichever is less;
(c) the cost of blank books, blank pages or other
materials plus the cost of labour and computer
time for the actual transcription or copying of data
furnished by the association in order to reproduce
books of account and other records.
81. 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 the insured is or may be entitled to claim for the
supply of goods or services covered by that payment.
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If the insured is entitled to an input tax credit for the
premium, the insured must inform us of the extent of
that entitlement at or before the time the insured makes
a claim under this policy. We will not indemnify the
insured for any GST liability, fines or penalties that arise
from or is attributable to the insured’s failure to notify us
of the insured’s entitlement (or correct entitlement) to an
input tax credit on the premium.
If the insured is liable to pay an deductible under this
policy, the amount payable will be calculated after
deduction of any input tax credit that the insured is or
may be entitled to claim on payment of the deductible.
82. Interpretation
Paragraph Headings are included for convenience only
and do not form part of this policy for the purposes of
interpretation of this policy. Words and expressions in
the singular include the plural and vice versa. Words
(except Headings) in bold lettering have special meaning
and are defined in the policy. Words that are not
specifically defined in this policy have the meaning
normally attributed to them.
83. Assignment
The insured must not assign the policy or any rights
under the policy without our prior written consent by way
of endorsement to the policy.
84. Authorisation
By acceptance of this policy, the association agrees to act
on behalf of insured persons and each of them agree that
the association shall act on their behalf, with respect to
the giving and receiving of notice of cancellation, the
payment of premiums and the receiving of any return
premiums that may become due under this policy and
the acceptance of other notice.
If the association comprises more than one entity, the
first named entity listed in the first Item of the policy
schedule shall be deemed the association for the purposes
of this Condition.
85. Territorial Coverage
Subject to its terms, this policy covers claims made
anywhere in the world except in or under the laws of the
United States of America and Canada, or their respective
territories and possessions.
86. Confidentiality
The insured may disclose to any third party the fact that
the association has paid, or agreed to pay, a premium for
this policy. The insured must not otherwise disclose to
any third party any terms of this policy, including but not
limited to the limit of indemnity, the Insuring Clauses and
the Exclusions except to the extent that:
(a) disclosure of the terms of this policy is required by
law; or
(b) disclosure is to legal advisors for the purposes of
the insured obtaining policy or claims advice; or
(c) we may consent in writing to disclosure of the
terms of this policy.
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Part 6 – Definitions
where used in this policy
(a) Association means any party named in the schedule
as an insured.
(b) Bodily injury means physical injury, sickness, death,
disease, and any mental injury or anguish, nervous
shock or emotional distress of any person.
(c) Business means the trade or activities conducted
by the association and described in the schedule
against ‘Professional business’.
(d) Claim means:
(i) a writ, statement of claim, summons,
application or other originating legal or
arbitral process, cross-claim, counter claim or
third or similar party notice for compensation
or non-monetary relief, including but not
limited to a criminal proceeding and an
extradition proceeding;
(ii) a written assertion of a right to, or a demand
for, compensation or non-monetary relief;
(iii) a formal administrative or regulatory
proceeding.
(e) Crisis means any of the following unforeseen events
where, in the reasonable opinion of the managing
director (or equivalent) of the association, the event
has the potential to cause an immediate and
serious affect on the association’s business if left
unmanaged:
(i) the sudden, unexpected death or disability of
any director or officer;
(ii) the sudden loss of a major customer, contract
or credit facility;
(iii) employee workplace violence;
(iv) the first apparent unauthorised intrusion into
the computer facilities of the association;
(v) a recall or boycott of any product;
(vi) a man made disaster;
(vii)any criminal or fraud investigation.
Crisis is not an event that affects generally the
industry in which the association conducts its
business.
(f) Deductible means the respective amount(s) shown
in the schedule as ‘deductible’ as being applicable
to the relevant Insuring Clause, each of which for
Insuring Clauses 1-5 is inclusive of defence costs. It
also applies to each official inquiry under Clause 20
(Official Inquiries).
(g) Defence costs means the reasonable legal costs and
expenses (other than regular or overtime wages,
salaries or fees of directors, officers or employees of
an insured) necessarily incurred by or on behalf of
an applicable insured (with our written consent) or
by us, in the investigation, defence and/or
settlement of a claim covered by this policy.
(h) Direct financial loss means direct financial loss
arising from physical loss of money, securities and
other tangible property belonging to, leased by or
in the care, custody or control of the association,
sustained by the association directly as a result of
any dishonest act committed by an insured person
(whether acting alone or in collusion with any
other person). It does not mean:
(i) costs, fees or expenses of prosecuting or
defending any demand, claim or legal
proceeding resulting from a direct financial loss
covered by this policy;
(ii) costs, fees or other expenses in establishing
the existence or amount of any direct financial
loss, except as provided in Clause 27 (Crime
Expert Expenses);
(iii) salary, wages, commissions, fees, bonuses,
promotions, awards, profit sharing,
superannuation or any other remuneration of
any insured person;
(iv) physical destruction to any premises, or to any
property situated on the premises;
(v) complete or partial non-payment under any
credit arrangement;
(vi) interest or other indirect or consequential loss.
(i) Discovery period means the period of time specified
in Clause 15 (Discovery Period) commencing
immediately after expiry of the period of cover or
any relevant transaction.
(j) Dishonest act means any dishonest or fraudulent
act committed by an insured person (whether
acting alone or in collusion with any other person).
(k) Employee means any person employed under a
contract of service by the association or any covered
subsidiary company but does not include a director,
principal, officer, partner, consultant, contractor,
subcontractor or agent.
(l) Employment benefits means
(i) salary, wages and any other monetary amount
or entitlement of whatsoever type earned prior
to the date of termination or owed by the
association in respect of that period; or
(ii) non-monetary employment benefits; or
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(iii) employment related benefits or compensation.
(m) Expert means any person or entity appointed by the
insured with our prior consent to provide the
association with advice and assistance in the event
of a crisis, or potential loss falling within Insuring
Clause 6.
(n) Insolvent means the association or any covered
subsidiary company:
(i) going into bankruptcy, administration,
receivership, liquidation or any external
administration; or
(ii) entering into a scheme of arrangement, a debt
agreement or other arrangement with
creditors; or
(iii) being unable to pay its debts as and when they
fall due.
(o) Insured means:
(i) any entity specified as such in the schedule;
and/or
(ii) any subsidiary company in existence at the
commencement of the period of cover; and/or
(iii) any insured person.
(p) Insured person means any person who is, was or
becomes during the period of cover a director
(whether formally appointed, shadow or de facto),
officer, trustee of any superannuation or pension
fund established by the association for the benefit
of its employees, office bearer, committee member,
employee of or volunteer to the association or a
covered subsidiary company during the period of
cover when acting in that capacity on behalf of the
business.
But shall not include:
(i) an external auditor, administrator, receiver,
receiver and manager, official manager,
provisional liquidator, liquidator, trustee or
person administering a compromise or
scheme of arrangement of the association,
subsidiary company or organisation or any
employee of such persons; or
(ii) any consultant, contractor, subcontractor or
agent of the association or subsidiary company;
or
(iii) Any body corporate.
(q) Legal representation expenses means the
reasonable legal costs and expenses an insured
incurs with our consent (which shall not be
unreasonably withheld) for legal representation in
relation to an official inquiry (but not including
wages, salaries or other remuneration internal
costs or overheads of any insured).
(r) Limit of indemnity means the amount shown in the
schedule against ‘limit of indemnity’ as our total
liability under the policy for all loss, inclusive of
defence costs, for all claims, all direct financial loss
and all other amounts payable under this policy
including but not limited to media costs, crisis
management costs and crime expert expenses.
(s) Loss means amounts an applicable insured under
an Insuring Clause is legally liable to pay on
account of a claim including but not limited to
damages, judgments, interest, claimant’s costs and
expenses and settlements entered into with our
prior written consent and defence costs, pecuniary
penalties and media costs;
(i) For the purpose of an official inquiry, loss
means legal representation expenses and
media costs;
(ii) For Insuring Clause 6, loss means only direct
financial loss;
(iii) For Insuring Clause 7, loss means the amount
of legal fees charged by the law firm appointed
with our consent;
(iv) For Insuring Clause 8 only, loss means tax
audit fees as set out in that Clause;
(v) For Clause 30 (Loss of Documents), loss means
costs and expenses reasonably incurred in
replacing or restoring documents;
(vi) For Clause 33 (Crisis Management & Costs),
loss means crisis management fees.
Loss does not include:
(i) Internal or overhead expenses of the
association;
(ii) Employment benefits or trust benefits;
(iii) fines or penalties imposed by law, other than
those penalties covered by Clause 16
(Pecuniary Penalties);
(iv) any matters which are deemed uninsurable
at law;
(v) aggravated, punitive or exemplary damages;
(vi) the cost of complying with any non-monetary
order or relief;
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(vii) any costs and expenses of any kind in
connection with any uncovered matter in
(a)-(f) above.
(t) Media costs means the reasonable fees and
expenses of a public relations firm which the
insured engages with our prior written consent (not
to be unreasonably withheld) for the purpose of
preventing or limiting potential adverse or negative
publicity in respect of a covered claim or official
inquiry.
(u) Money means legal tender including bank notes,
coins, bullion, cheques, bills of exchange,
promissory notes, and claims on bank deposits and
accounts.
(v) Official inquiry means any official investigation,
examination, inquiry ordered or commissioned by
an official body or institution, and:
(i) which the insured person is legally compelled
to attend; and
(ii) which has as its subject matter the affairs of
the association or the conduct of an insured
person in that capacity, or the conduct of the
professional duties in the business; and
(iii) notice of which is first served on the insured
person and notified to us in the period of cover.
It is not necessary that a wrongful act be alleged.
(w) Organisation means any external association not
related to the association and that it is not a
subsidiary company but does not include any entity
which has negative assets at inception of this
policy, or has securities traded in or undertakes its
business enterprise, wholly or partly, in the United
States of America or Canada or their respective
territories.
(x) Outside directorship means the position of director,
officer, secretary, trustee or equivalent position
held by an insured person in an organisation at the
written request or direction of the association.
(y) Period of cover means the period shown in the
schedule against ‘period of cover’ unless terminated
earlier.
(z) Policy means this policy document, its schedule and
the endorsements, if any, noted in the schedule or
granted by us after inception of the policy, and the
information given to us on behalf of the insured in
the proposal.
(aa) Pollutant means any
(i) solid, liquid, gaseous or thermal irritant or
contaminant, including without limitation
smoke, vapour, soot, fumes, acids, alkalis and
chemicals; and
(ii) waste materials, including materials to be
recycled, reconditioned or reclaimed; and
(iii) other air emission, odour, waste water, oil, oil
products, infectious or medical waste or any
noise emissions.
(bb) Professional duties means those activities described
in the schedule, but solely in respect of the business
of the association.
(cc) Property damage means destruction of or damage
to tangible property including the loss of use
thereof.
(dd) Proposal means the written proposal form the date
of which is shown in the schedule, together with all
supplementary information and material by and
on behalf of the insured, given to us and on which
we have relied upon to enter this policy.
(ee) Retroactive date means the date shown in the
schedule against ‘retroactive date’.
(ff) Schedule means the schedule attaching to and
forming part of this policy.
(gg) Securities means for Insuring business 6, any
negotiable or non-negotiable instruments or
contracts representing money or other property,
but excluding money. For the purposes of the other
terms, conditions and exclusions of this policy,
securities means any shares, preference shares,
stocks, debentures, warrants, options, bonds,
promissory notes or other equity or debt security.
(hh) Senior counsel means a barrister in active practice
who is entitled to use the post nominals QC or SC
in any superior court in the Commonwealth of
Australia or the Dominion of New Zealand.
(ii) Subsidiary company means any company or other
incorporated entity that at the inception of the
period of cover by virtue of Australian law was or is,
either directly or indirectly a subsidiary of the
association.
Provided always that the accounts of any subsidiary
company are consolidated into those of the
association in accordance with the relevant
accounting standard.
(jj) Tax audit means in respect of a tax return
submitted by or on behalf of the association, a
formal investigation or audit by the Australian Tax
Office, or any Australian Federal, State or Territory
department, body, agency or authority which is
authorised to conduct such an investigation or
20
audit, and includes any inquiry or investigation
by the Australian Taxation Office aimed at
determining the association’s compliance with
the record keeping requirements of relevant
taxation legislation.
(kk) Transaction means where:
(i) the association consolidates with or merges
into or sells all or substantially all of its assets
to any other person or entity or group of
persons and/or entities acting in concert; or
(ii) any person or entity, whether individually or
together with any other person or persons,
entity or entities becomes entitled to exercise
more than 50% of the rights to vote at general
meetings of the association or control the
appointment of directors who are able to
exercise a majority of votes at Board meetings
of the association.
(ll) Trust benefits means any amount payable pursuant
to or under the rules of any superannuation or
pension fund established by the association for the
benefit of its employees.
(mm)We, us, our means Allianz Australia Insurance
Limited, AFS Licence No 234708, ACN 000 122 850.
(nn) Wrongful act means:
(i) for the purposes of Insuring business 1, any
error or omission by an insured, or by any other
person or party for whose actions the
association is vicariously liable, in the conduct
of the professional duties on behalf of the
association for any third party. It does not
include a wrongful employment act; or
(ii) For the purposes of Insuring businesss 2 and 3,
any actual or alleged breach of duty, breach
of trust, act, error, omission, neglect,
misstatement, misleading statement or breach
of warranty of authority, including a wrongful
employment act, committed by an insured
person while acting; or
(iii) in their capacity as an insured person of the
association or subsidiary company; or
(iv) in an outside directorship as provided by
business 23; or
(v) for the purpose of Insuring business 4,
wrongful employment act by the association; or
(vi) for the purpose of Insuring business 5, any
actual or alleged breach of duty, breach of
trust, act, error, omission, neglect,
misstatement, misleading statement or breach
of warranty of authority by the association. It
does not include a wrongful employment act by
the association or conduct set out in (i) above.
(oo) Wrongful employment act means a wrongful act in
respect of employment-related:
(i) discrimination on any ground including but
not limited to sex, age, disability, race, colour,
sexual orientation, marital status or
pregnancy; or
(ii) wrongful dismissal or termination of
employment; or
(iii) workplace harassment; or
(iv) defamation; or
(v) misrepresentations as to terms of
employment; or
(vi) refusal to employ; or
(vii) denial of natural justice; or
(viii) demotion, failure to promote, deprivation of
career opportunity, refusal of tenure,
evaluation or discipline,
in respect of an employee of the association or a
subsidiary, or an employee of an organisation for the
purpose of Clause 23.
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Contact: fi [email protected]
Allianz Australia Insurance Limited
ABN 15 000 122 850
2 Market Street, Sydney NSW 2000
The information in this brochure
is current as at April 2009. POL3
97BA
04/
09
Amendment NoticeChanges to your duty of disclosure
Preparation Date: 01/10/2015
SPDS
04DO
DAN
10/1
5
The “Your Duty of Disclosure” section is deleted and replaced as follows:
Your Duty of Disclosure Before you enter into a contract of insurance with us, you have a duty under the Insurance Contracts Act 1984 to disclose to us every
matter that you know, or could reasonably be expected to know, is relevant to our decision whether to accept the risk of the insurance and, if so, on what terms.
You have the same duty to disclose those matters to us before you renew, extend, vary or reinstate the contract.
This duty of disclosure applies until the contract is entered into (or renewed, extended, varied or reinstated as applicable).
Your duty however does not require disclosure of any matter:
• that diminishes the risk to be undertaken by us; or
• that is of common knowledge; or
• that we know or, in the ordinary course of our business as an insurer, ought to know; or
• as to which compliance with your duty is waived by us.
Non-disclosure If you fail to comply with your duty of disclosure, we may be entitled to reduce our liability under the contract in respect of a claim,
cancel the contract or both.
If your non-disclosure is fraudulent, we may also have the option of avoiding the contract from its beginning.
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