LIABILITY INSURANCE SUMMARY OF BENEFITS FOR OPTOMETRISTS. Overview

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1 LIABILITY INSURANCE SUMMARY OF BENEFITS FOR OPTOMETRISTS Overview The New Zealand Association of Optometrists (NZAO) is able to provide its members, through its insurance partner Marsh, with access to comprehensive liability insurance at competitive premiums. The liability insurance package structured with optometrists in mind. There are two aspects of the cover to consider. Individual Professional Indemnity Insurance. This is for each NZAO member optometrist. There are also optional extensions to consider for Locums or Sole practitioners in non-incorporated practices with no staff that include General/Public Liability and Statutory Liability insurance. Business Entity insurance. This covers the business entity for professional indemnity as well as a range of management liability risks through General/Public Liability, Employee Fidelity, Statutory and Employers Liability. There are also optional extensions to consider that include: Employment Disputes, an extension of Professional Indemnity cover for employee optometrists who are not NZAO members, higher General/ Public Liability limits, and Directors & Officers liability insurance.

2 Members Professional Indemnity Insurance BENEFITS OF COVER POLICY ENHANCEMENTS ADDITIONAL COVER FOR LOCUM TENENS OR SOLE PRACTITIONERS Individual Insurance cover Anywhere in New Zealand. Your own ring-fenced limit that cannot be eroded by others (e.g. your colleagues). Protection for civil Liability from Breach of Professional Duty (e.g. Indemnity for third party Settlements and Damages). Legal costs and expenses. Costs and Expenses arising out of Council disciplinary hearings, ACC enquiries and HDC complaints. Liabilities attaching to you, arising out of locum activities. Low excess ($200 per claim). Professional Indemnity policy excesses typically start at $1,000 as a minimum (if arranged outside of this scheme). Transferrable cover allowing you to move jobs without risking a gap in protection or having to buy new insurance. 24 hour cover, not just restricted to office opening hours or a particular practice. Control over your own cover provisions, regardless of your employer s arrangements. 24hr good Samaritan (medical emergency first aid) cover. Defamation (libel or slander). Voluntary work under VOSO in the Pacific (the territories included are: Papua New Guinea, Soloman Islands, Fiji, Tonga, Samoa (excluding American Samoa), Tokolau, Niue, and Cook Islands). Run-off cover. In the event of retirement, incapacity or discontinuance (including temporary) from active employment in the industry within NZ please advise NZAO to note this as your policy will automatically provide ongoing cover for any claims that may arise against you during the time you were working for a period of up to 6 years from cessation. (policy terms and conditions apply). Complimentary Legal Consultation from an approved legal adviser of up to 2 hours on matters relating to loss mitigation (this is in addition to any claims matters where a lawyer is appointed to act on your behalf). As a Locum or a sole practitioner under a non incorporated entity and with no staff, you do not need the same number of covers provided under the Business Entity Liability which includes additional professional indemnity for the incorporated practice and indemnity for employee related liability risks. However you do have exposure to General / Public Liability (property damage or injury to third parties) and Statutory Liability claims (breach of statute resulting in investigation and

3 prosecution, e.g. Liabilities arising under the Health Practitioners Competence Assurance Act 2003;). As an extension to Professional Indemnity cover you may consider adding the General / Public and Statutory Liability options. Business Entity Insurance Covering key liability exposures faced by NZAO member optometrists running their own incorporated practice or partnership which compliments the individual Professional Indemnity protection. The insurance package provides policy protection for third party settlements and losses and your own related defence costs. Summary of Cover Limit Excess PROFESSIONAL INDEMNITY As a distinct legal entity, your optometry practice is exposed to legal proceedings or complaints as well as the vicarious liability of your employees actions. Therefore, as your Individual Members insurance protects you in your personal legal capacity only, the entity also requires sufficient protection. Claims could arise from breach of privacy, a civil action alleging incompetence of employees, an alleged breach of the Fair Trading Act or an enquiry into practice standards by HDC. $1,000,000 $200 GENERAL/ PUBLIC LIABILITY- All businesses owe a duty of care to keep the public safe on premises or look after property in its care, including as a tenant. This covers you and your practice for legal liability arising from property damage and personal injury to third parties occurring in the course of your business activities. It includes cover for defence costs as well as settlements or damages that might be awarded against you where you are held legally liable. $1,000,000 (higher limit options are available) $200 STATUTORY LIABILITY FIDELITY LIABILITY There are numerous Acts of Parliament that you need to comply with as a business owner. With statutes and regulations constantly changing it is becoming increasingly common for businesses to unintentionally breach the law. This provides cover to defend unintentional breaches of statute and covers legally allowable fines that may be awarded against you or the practice. Insured Acts include Health & Safety in Employment, Privacy, Fair Trading and Consumer Guarantees. This covers your practice from direct financial loss caused by the dishonest acts of employees. For example, your staff may misappropriate funds through false invoicing. $500,000 $500 $100,000 $5,000

4 EMPLOYERS LIABILITY INTERNET LIABILITY This forms a small but important part of your Liability portfolio. It responds to claims made against you by employees seeking damages for work related injuries that are not covered by ACC. Examples include gradual injury from chemical poisoning, mental injury or stress from work. This cover provides indemnity against claims by third parties that have suffered loss due to your system transmitting computer virus and creating damage, allegations of Domain name misuse or misuse of information over the Internet or intellectual property breach. $500,000 $200 $250,000 $ 5,000 Optional Extra Covers For Business Entity Insurance Summary of Cover Limit Excess CYBER COVER Specialised cover for protection of internet and network exposures some of which are excluded from traditional Material Damage and Business Interruption policies. Also covers liability to third parties as a result of the use of your IT systems as well as damage or destruction of your own systems and records. Cover is also available to protect the company's reputation should a breach of cyber privacy occur. Various limits available; from $500,000 to $2,000,000 Varies with the limit chosen. EMPLOYMENT DISPUTES This cover protects you and your business against claims by current, former or prospective employees alleging such things as breach of employment contract, failure to promote, constructive dismissal, harassment or discrimination. The cost is based on the number of employees. Do not include yourself as business owner, or other directors, partners or owners (because you would not take a personal grievance against yourself so cannot be eligible for cover). $100,000 $2,000 DIRECTORS & OFFICERS A D&O policy can indemnify directors against wrongful acts arising out of their role as a company director. Claims against company directors are becoming more frequent in the current economic climate. Claims can arise when companies have insufficient assets to meet a creditor s claim, directors provide personal guarantees in contracts or over commit the company to risks considered unacceptable under the Companies Act.. Cover includes settlements and associated legal defence costs. $500,000 Nil GENERAL/ PUBLIC LIABILITY Options for higher limits are selectable in the proposal form. It is important to consider the worst case scenario of this exposure and select an appropriately cautious limit. For example, consider the buildings surrounding your practice. Is your limit sufficient if you are found liable for total destruction of neighboring properties? $5m or $10m $200

5 Notes To arrange insurance cover for your business, please refer to the Proposal for Business Cover. Limits of indemnity are each and every claim ( occurrence for General Liability) and in the annual aggregate. The Excess amount is each and every claim ( occurrence for General Liability). The above is a general summary of the policies. Please refer to Marsh if you have any questions and require further clarification about the covers.

6 IMPORTANT NOTICES Insurer Information and Security Rating INSURER NAME CHANGES SECURITY RATING Lumley, a business division of IAG New Zealand Limited Lumley was acquired in 2015 by IAG New Zealand Limited. In future the Lumley brand will be incorporated into the NZI brand. The insurer continues to be one of the leading providers of insurance products to health sectors in New Zealand, retaining the core philosophies and claims service standards. IAG New Zealand Limited received a Standard & Poor s (Australia) Pty Ltd financial strength rating of AA-. Duty of Disclosure You have a common law duty to disclose all material facts before entering into, renewing or altering a contract of insurance. If you fail to do so, or if any material facts are misrepresented, the insurance could be made void. The Insurance Law Reform Act defines a material fact as one that would influence a prudent insurer in accepting or rating a risk. Your common law duty of disclosure applies only before each contract is entered into, renewed or changed, but some policies have a condition that extends the duty throughout the period of insurance. Your duty of disclosure does not include facts which are common knowledge. Nor does it include facts already known to your insurer, or which ought to have been known to your insurer in the ordinary course of business. If in doubt, it is safer to disclose information than to conceal it. Utmost Good Faith The duty of Utmost Good Faith is implied in every contract of insurance that you enter into. The duty requires you, the insurer, the broker and any other parties to the insurance contract to act openly and honestly with each other at all times. A breach of the duty of Utmost Good Faith could lead to a policy or a claim being voided by the insurer.

7 Claims Made Policies Your insurance programme may include covers which are "claims made" contracts (except General Liability). It is essential that your current insurers are made aware of all claims or potential claim circumstances of which you, or your organization, have become aware of during the current insurance period. A "claims made" contract is a policy which only applies with regard to claims made and notified to insurers during the policy period, subject to the act, error or omission giving rise to the claim occurring after any policy retroactive date. Any claims or potential claims which arise subsequent to your completion of the proposal form or renewal declaration must be reported to your current insurers prior to the expiration of the current policy. If you are in any doubt as to whether a matter would be deemed to be a notifiable circumstance, we strongly recommend that you report the matter. Insurers do not usually penalize an Insured for reporting matters "out of an abundance of caution". Changes and Disclosure It is important that you advise us immediately of any changes or developments to your business that would be material to your insurance programme. Examples include: Acquisition of or merger with another company, newly created or acquired subsidiaries. Any new claim, or potential claims incident, that has not been reported to your insurers. Business undertaken that is outside the scope of the practice of optometry. Increase in values beyond the insured limits on property. Significant removal of stock or equipment to different locations. Assumption of liability or waiver of recovery rights under the terms of any agreement or contract. Substantial change in processing methods, occupancy of premises, or products. Development of any activities outsides of New Zealand, particularly in North America. Issue of a prospectus, information memorandum or other documents in connection with the sale of the company s own securities. New outside directorships undertaken during the policy period. This list is not exhaustive. Generally, you should let us know about any matter that might have an effect on the adequacy or validity of your insurance. You do not have to advise us if an employee leaves or a new one joins. However if the new employee is an optometrist and doesn t already have individual professional indemnity insurance, they will need to take out this cover. If you are in any doubt as to whether the insurer should be told about any particular change to the insured risk, please query with Marsh.

8 What Constitutes a Claim? There is an array of situations that you may become aware of where you could reasonably expect a claim or complaint could arise and potentially result in a claim against you. These situations could be a threat by a patient or other third party including a Statutory or professional body. The above covers a wide range of situations from a verbal insinuation that further action is intended to be taken, a complaint to your Association to the more clear-cut formal letter of demand or a writ or summons served on you. What Do I Do In The Event Of A Claim? It is important that you get in touch with Marsh immediately following any complaint, claim, notice or enquiry is made against you (or may lead to a complaint or claim against you). Marsh is responsible for managing your claim with your insurer. We liaise with your insurer providing guidance and advocacy where appropriate. We do not provide legal advice. We ask you to observe the following: 1 Please ensure that you do not admit liability or offer to settle the claim. Your insurer will need to be involved in the decision regarding liability if you wish insurance cover to be available to you. 2 As a rule, you should not mention the existence of your insurer s involvement to any third party other than where this would be contrary to a statutory or regulatory obligation. 3 If you have notified a circumstance which might lead to a claim, please keep us informed of developments. This includes forwarding us copies of all relevant correspondence. You may also be asked to provide draft responses to claim matters for prior approval from the insurer. 4 If you are served with proceedings please advise Marsh immediately and provide a copy of the documents received. 5 Should it be necessary to appoint a lawyer, the insurer will do so. Please do not instruct your own lawyer without permission from the insurer. If you instruct a lawyer without agreement from the insurer it is likely they will not cover the costs under the policy. 6 We ask that you continue to act as a prudent uninsured between your notification and resolution of indemnity. A prudent uninsured is a broad term meaning you must take reasonable steps to reduce future risk or damage in the circumstances in a cost conscious manner without admitting liability. 7 If you have notified a potential claim, note that insurers may not look at the issue of cover until a demand for compensation or damages is received. While you may have notified Marsh of a circumstance that you believe might give rise to a claim, insurance cover is always subject to the policy terms and conditions. Steps in notifying a potential claim: 1.) Inform your Client Executive at Marsh (see back page for contact details). 2.) Prepare a timeline of events leading up to the allegations or potential allegations

9 3.) Provide copies of any correspondence you may have received in relation to the claim. Insurers consent must be obtained prior to you corresponding with parties or incurring any costs.

10 For All Enquires TIAAN JONKER CLIENT EXECUTIVE DIRECT DIAL +64(0) MOBILE +64(0) ADDRESS The Terrace (Level 8) Wellington 6021