Auditor s professional indemnity Insurance no

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Marsha Rogers
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1 The table of contents is not part of the general terms and conditions for the Auditor s professional indemnity Insurance. This is a translation of the Danish terms and conditions. In case of any discrepancy between the Danish text and the English translation, the Danish text shall prevail. Sections Contents Page no 1.0 Risks Covered Insurance Period Limits of indemnity Exclusions Excess Inception and Duration of the Insurance Payment of Premium Claims and liability Indexation Alteration of Risk Other Insurance Risks Covered Claims and liability Terminations after claims Expiry Other conditions... 4 General Insurance conditions in compliance with current legislation on insurance agreements. 1.0 Risks Covered The insurance shall cover legal liability of the insured for claims for compensation from third parties for financial loss arising from his own or his employees' negligence or 2.0 Insurance Period The insurance shall cover liability for claims made against the Insured for compensation that are made against during the insurance period. omission in the conduct of his business as state-authorised accountant or chartered accountant based in Denmark. A claim shall be deemed to have been made at the earliest of the following times: Page 1

2 a) The point in time when the Insured or other state-authorised or chartered accountant covered by the policy receives the first written notice for compensation in connection with a loss or damage. b) The point in time when the Insured or other state-authorised or chartered accountant covered by the policy obtains his first knowledge that 1) a loss or damage has occurred or 2) there is a probability that a loss or damage will occur. In the case that an act of negligence or omission which eventually results in a claim 3.0 Limits of indemnity The indemnity limits is he highest amount Tryg will pay for a single instance of loss or damage. The indemnity limits is, in addition, the highest amount that Tryg will pay for all claims covered by the policy within the individual insurance year. Costs, or expenses incurred and arising from the settlement of claims shall be covered, insofar as such costs or expenses have been defrayed with prior consent from the Insurer. Such costs or expenses as well as payment of interest on compensation amounts 4.0 Exclusions 5.0 Excess The policy does not cover liability due to: a. the Insured wilfully neglecting his duties, or gross negligence. b. the Insured accepting any liability beyond his ordinary liability as a chartered or state-authorised accountant. The Insured carries a 10% excess of every claim. The excess has a minimum and a maximum amount stated in the policy. is unknown at the commencement of the policy, it is a condition that, for Tryg to assume liability for compensation, the Insured can substantiate that he at no time before the commencement of the policy has had any knowledge about or supposition that a claim for compensation would be made. In the case of a policy alteration, including an increase in cover, and where an act of negligence or omission which eventually results in a claim is unknown before the date of alteration of the policy, the same stipulations regarding Tryg's liability to provide compensation apply, according then to the post-alteration conditions. Claims for compensation against the Insured that are made during the period of cover, but which are notified more than 6 months after the expiry of the policy, are not covered. awarded against the insured in an action for damages in respect of claims falling under the scope of this insurance shall be covered in full, even though indemnity limits are thereby exceeded. Where the indemnity limits are inferior to the amount awarded against the insured, cover shall be provided only for that part of such costs, expenses and interest payments which is proportional to the amount payable by the Insurer. c. fraudulent conduct, irrespective of whoever committed it. d. bodily injury or damage to property. Claims below the minimum amount of excess are not covered by the policy. Page 2

3 6.0 Inception and Duration of the Insurance The insurance shall commence when it is accepted by Tryg. The policy may be cancelled at the insurance year's expiry by either of the parties with one month's written notice. The policy will automatically be renewed for another year unless written notice of termination is given. 7.0 Payment of Premium The first premium is due for payment from the date of the policy coming into force; subsequent premiums are due on the stated renewal date. Request for payment is sent to or is delivered at the address given by the Insured as the payment address. Tryg must be informed immediately in the event of any change in the payment address. 8.0 Claims and liability As soon as the Insured knows or presumes that a claim will be made against him, written notification must be sent to Tryg. The Insured is not entitled to admit any liability committing Tryg unless the Insured is obliged to do so by law. Tryg is entitled to make use of their own lawyers during negotiations concerning the arrangements of a case and during legal proceedings. The Insured is obliged to offer any assistance in providing necessary particulars to close the case. 8.1 Arbitration a. If a dispute arises between the Insured and Tryg about whether a claim is covered by the policy, or b. If the Insured, in an attempt to avoid public prosecution, pays compensation to a claimant where the Insured believes the 9.0 Indexation The limits of indemnity as well as the minimum and maximum amount of the excess that are stated in the policy, are 6.1 Cancellation/Termination after Claims The policy can, for a period of up to one month from the settlement or rejection of a claim, be cancelled by either the Insured or Tryg with 14 days' written notice. If the premium is not paid at the first request, Tryg will send a reminder of the premium due, to the Insured at the payment address. Such a reminder will be sent, at the earliest, 14 days after the first request for payment. In the event that payment is not effected within 14 days of the reminder being sent, Tryg's liability ceases. In the event that Tryg has sent such a reminder, Tryg is entitled to collect a fee. claimant has legal grounds for compensation and this is disputed by Tryg, or c. If the Insured and the claimant are in agreement that a claim should be settled by arbitration the President of "Maritime and Commercial Court", or a judge appointed by him, a judge appointed by "The General Council of the Bar" and one appointed by "Association of chartered Accountants" or "Association of stateauthorised Accountants" in relation to each individual case. The court of arbitration's decision cannot be brought before a court of appeal. The court of arbitration will decide which of the parties shall be held liable for the costs of the arbitration. Tryg is entitled to pay compensation directly to the claimant unless this has already been paid in full by the Insured. indexed every year on January 1st on the basis of the salary index published by The Danish Statistical Bureau. The premium is Page 3

4 adjusted accordingly from the year's first renewal date. Indexation is carried out by increasing or decreasing the said amount by the percentage by which the current salary index 10.0 Alteration of Risk The Insured is obliged to inform Tryg in the event of any changes to the Insured's 11.0 Other Insurance The policy shall not cover to the extent that the current policy's insured interests are covered by another policy Risks Covered The insurance covers in accordance with current legislation concerning state-authorised and chartered accountants against any 13.0 Claims and liability The insured is obliged to inform Tryg without delay when a claim for damages occurs or is expected to occur Terminations after claims 15.0 Expiry From the date notification of a claim has been made to Tryg, cover ceases with respect to future occurrences and a new policy must be effected. If the Insured surrenders his authorisation as a state-authorised or chartered accountant, 16.0 Other conditions The conditions of the Auditor's professional indemnity insurance concerning payment of premium and the inception and duration of the policy are also valid for existing cover. differs from the salary index stated on the policy's first page. The salary index that is used for indexation for the calendar year in question is the salary index at Jan 1st from the previous calendar year. declared circumstances or conditions that will affect the risks involved. Auditors Fidelity Guarantee Insurance financial liability that the insured incur in the execution of his duties as a state-authorised or chartered accountant. To the extent that Tryg has provided a payment for damages according to the policy, the claim will be passed on to the Insured pursuant to the rules of suretyship not exceeding the amount in damages. Tryg reserves the right to determine the conditions and/or the new premium for such a policy. the insurance will lapse from the date of the surrender. Page 4

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