Insurance 101

Association Liability

As a professional association, your key agenda is to represent the needs and concerns of your membership body, individual office bearers and employees, and the organisation in its entirety. Designed specifically for Associations and Not-For-Profit Organisations, Association Liability insurance combines Professional Indemnity and Directors and Officers Liability to ensure that you are protected against the inimitable risks facing community associations.

Association Liability provides protection to office bearers and directors, as well as the association itself, against litigation arising from wrongful acts in the management of the association, employment practices liability and fidelity. In addition, Association Liability also provides coverage to the association against claims for financial loss arising out of a breach of professional duty by the association.

Associations and Not-For-Profit Organisations are often exposed to litigation related to a range of issues, including breach of professional duty, Trade Practices Act matters, defamation, and breach of contract or consumer legislation. It is therefore important for Associations and Not-For-Profits to minimize their risk by having appropriate insurance.

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Understanding IT Liability

Information Technology’s hold on our world has become increasingly tighter due to the demands of our high speed, interconnected and ever-changing global society. The ever-increasing need for improved speed to market, greater competition, customer expectation, and increased reliance on outsourcing systems and data, has meant that information technology has continued to evolve with ferocity. As such, many individuals and businesses today could not fathom a world without technology.

However, as businesses come to rely more and more on Information Technology (IT) for the smooth and successful operation of their business, they are also significantly more vulnerable to litigation. IT professionals and businesses face increased exposure for the quality of the advice they provide, as well as for any damage that may be caused by the performance of the products they supply. In addition, IT companies face financial loss threats due to systems not performing as intended or not being delivered within contractual time frames, due to breaches of Intellectual Property Rights, such as copyright, trademark or register design, or due to the loss of data.

To address these issues insurers have developed Information Technology Liability Insurance, which ensures specific protection for organisations against legal liability arising from the failure of their products, services and/or advice in the conduct of their business.

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Public and Products Liability

According to the Australian Competition and Consumer Commission, in recent years the average size of a settled public liability claim has increased from $11,000 to almost $17,000. Congruently, there has been a stable increase in the number of public liability claims made. As such, the importance of Public and Products Liability for all business owners has grown substantially.

No business, industry or even sole trader is exempt from some degree of risk. Managing the risks inherent in your business is a responsibility that all owners have to third parties, which includes customers, employees, suppliers, and the community more broadly. When an accident occurs that is not reasonably foreseeable and causes damage to the property of another party, or causes injury to a person other than an employee (who is generally covered under workers compensation), the business may be found legally liable for the injury or damage.

Public Liability insurance is therefore vital for all businesses, as it provides protection for you, your employees, and members of the public, by covering any financial costs involved if a third party seeks compensation for your negligent actions.

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Retroactive Date Explained

Reading through an insurance policy can often seem a formidable task. Laden with an involved and intricate lexicon of industry jargon, it is often difficult to decipher the important information. Amid a slew of limits and excesses, insuring clauses, and extensions, sit a series of important dates used to determine the period of coverage being offered. While the “Effective Date” and “Expiration Date” of a policy are easily recognised and understood as the dates on which the policy’s coverage begins and expires, respectively, the “Retroactive Date” is less well understood.

The retroactive date is a key term included in every liability policy written on a “claims-made” basis. A policy offering claims-made coverage will only cover claims that are reported during the policy period. Such a policy would not cover claims filed before or after the active policy period, regardless of when the loss occurred. Under a claims-made policy if the insured fails to immediately report a claim or circumstance that may give rise to a claim, they may forego their right to indemnity.

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