Professional Liability Insurance

Transcription

1 Professional Liability Insurance Terms and Conditions LBA15 Homepage Click on Section to go straight to that section! This document is supplementary to the General Business Conditions. You can read about what exactly is and is not covered and what to do if you have a claim. Terms and conditions constitute rights and obligations for you and for us ENG 16.09

2 Contents Click on the question to read the answer. 1. Who are the insured parties?3 2. Where is this insurance valid? 3 3. Which changes should you report to us immediately?3 4. What if you fail to report changes as quickly as possible? 3 5. What do we mean by professional error, incident, claim, report and circumstance?4 6. When does this insurance apply? 4 Covered 7. What is covered? 5 8. Which expenses are covered? 5 9. How much is covered for damages and expenses together? 6 Not covered Claims 10. Which damages are not covered? Which damages are not always covered? What kind of behaviour that the insured party exhibits is not covered? When should an insured party report a claim? When should an insured party report a circumstance? When is a circumstance considered to be reported? What should an insured party do if they have a claim? What should an insured party not do if they have a claim? What if the insured party fails to comply with their obligations if they have a claim? What if the insured party deliberately fails to comply with their obligations if they have a claim? Who determines the amount of the claim? Who settles the claim? Who may conclude settlements? What if an insured party is also covered under another insurance? What if an insured party reports a claim after the insurance has stopped? 10 These terms and conditions always apply if you have Professional Liability Insurance. 2

3 1. Who are the insured parties? Policyholder = you. A legal entity or person who has taken out professional indemnity insurance. You deal with the insurance contract. You pay the premium. You can stop the insurance. You can ask to have the insurance changed. For the activities and profession on the policy schedule. Your employees who work for you under your management and supervision. Including temporary workers. Including interns. Including volunteers. For the activities and profession on the policy schedule. Directors of your company who assist you with an assignment. Including directors of the companies or legal entities that you own or your company owns. For instance: Associates. Directors, the board. Partners. Management Other companies or assistants who assist you with an assignment. Including all members of staff who work for these companies or persons. For the activities on the policy schedule. 2. Where is this insurance valid? In the Netherlands. For assignments that have been or will be carried out in the Netherlands. Outside the Netherlands Only if it is specified on the policy schedule. 3. Which changes should you report to us immediately? Risk changes that are not covered by the insurance now. Information that is no longer correct on the policy schedule. For instance: Activities and professions that are not on the policy schedule. You acquire companies or legal entities in your possession that are not on the policy schedule. You set up a foreign branch. These changes are not automatically covered. Only once we have changed the policy schedule or the conditions. 4. What if you fail to report changes as quickly as possible? Or you are not insured. If we were to discontinue the insurance because of the change. Or you are not insured at all. If we were to change the rights and obligations on account of the change. This also applies if you fail to provide information when we ask for it. 3

4 5. What do we mean by professional error, incident, claim, report and circumstance? Professional error = failure to perform the assignment properly. Or not having the required professional knowledge and expertise that is expected for the performance of an assignment. Incident = a professional error that results in a claim against an insured party. Claim = the claim for liability from an insured party. When another party claims compensation from the insured party. Report = the point in time that an insured party reports the claim to us. This point in time determines whether the insurance covers the claim. Circumstance = a professional error that you expect will lead to a claim. But at that point in time no claim has yet been made against you. Report a circumstance immediately if the insurance is discontinued. 6. When does this insurance apply? If an incident occurs within 5 years before the start of the term of the insurance. And you did not know or would not have suspected that an insured party could be held liable for it. And the insured party is nevertheless held liable for it during the term of the insurance. And the insured party reports this claim for liability during the term of the insurance. And no other term is specified on the policy schedule. If a claim follows an incident that occurred during the term of the insurance. And the insured party is held liable for it during the term of the insurance. And the insured party reports this claim for liability during the term of the insurance. If an incident occurs during the term of the insurance. And the insured party is not held liable for it during the term of the insurance. But it is likely that the insured party will be held liable at a later stage. And the insured party reports this during the term of the insurance. 4

5 Covered 7. What is covered? Damage to your client resulting from a professional error or incorrect advice. During the implementation of an assignment. According to the agreement and arrangements on the policy schedule. 8. Which expenses are covered? Expenses incurred to prevent or restrict the imminent threat of damage. Only if an insured party is liable for the damage. And the damage is covered. And the insured party incurs these expenses or is responsible for them being incurred. And we have an interest in the measures. Even if the measure fails. Expenses for defence if an insured party is held liable. Only if the damage is covered. And we engage legal assistance for the insured party. Or give prior permission to engage an expert. And we determine the defence. We then also pay the litigation expenses. There is no deductible for defence expenses. Expenses incurred for legal assistance for criminal or disciplinary proceedings. Only if the damage is covered. And we engage legal assistance for the insured party. For criminal or disciplinary proceedings. Not: fines, redemption sums and litigation costs. There is no deductible for these legal assistance expenses. Expenses for dispute resolution not involving a judge. Only if the damage is covered. And we give prior permission for this. For instance: Mediation Mediation = to resolve a dispute in consultations led by a mediator. There is no deductible for these expenses. Expenses for an expert s assessment if an insured party is held liable. Only if the damage is covered. And we engage an expert to give an expert s assessment on behalf of the insured party. Or give prior permission to engage an expert. There is no deductible for these assessment expenses. Statutory interest. The statutory interest on the claim amount that we pay. 5

6 Covered 9. How much is covered for damages and expenses together? The maximum amount we pay per claim is the amount stated on the policy schedule. What if there is 1 cause for several incidents? Then we count it as 1 claim. What if there is 1 cause for several types of claims? Then we count it as 1 claim. What if several insured parties are liable for the incident? Then we count it as 1 claim. What if there are several claims for liability for 1 incident? Then we count it as 1 claim. The date of the first claim for liability determines whether this insurance covers the claim. We pay a maximum amount per insurance year. The amount is specified on the policy schedule. This applies to all the insured parties combined. The point in time of the first claim determines the insurance year that the claim relates to. Note: you pay your deductible first. Not for defence expenses, the expenses incurred for legal assistance for criminal or disciplinary proceedings, expenses incurred for dispute resolution without involving a judge, or expenses incurred for an expert s assessment. The own risk excess is specified on the policy schedule. 6

7 Not covered Check the General Business Conditions too. Our General Business Conditions specify those situations that are never covered. Sanctions Act 1977 [Sanctiewet 1977] Serious conflicts (molest). Nuclear reactions. Fraud. Terrorism. Failure to comply with the terms and conditions. For each situation, the General Business Conditions specifically state which situations are never covered. Below is a list of what is not covered by your Professional Liability Insurance. 10. Which damages are not covered? Damage because the insured party fails to carry out an assignment at all, in part or on time. Nor is it if the insured party rectifies the work for the assignment. Nor is it if the insured party carries out the assignment again or later anyway. Nor is a claim due to delay. Damage because expenses are higher. Because an insured party s budget or price calculation is incorrect. Damage due to a professional error in a design or contract documents. Resulting in the project having to be changed later. For expenses that would have been incurred regardless of the error. Damage because the insured party carries out legal acts for which it does not have permission. Damage because the insured party does not comply with intellectual or industrial property rights. Damage that exceeds normal liability according to the law. For payments as a result of an agreement made in advance. For instance, a fine or guarantee. Not if the claim would also have arisen without the agreement reached. Damage arising from defamation, slander, insult or lies. Damage that arises because a client does not achieve the result that an insured party has promised. For instance, a return that is lower than expected. Expenses that you incur because you have to carry out the work again. Nor is it for the income that you miss out on because you are no longer entitled to it because of your error is also not covered. Damage due to asbestos. 11. Which damages are not always covered? Damage to the environment is not covered. Covered: damage caused by sudden contamination. 7

8 Not covered 12. What kind of behaviour that the insured party exhibits is not covered? The insured party deliberately acts or fails to act. With the intention of causing damage. Without intending to cause damage. But he or she is aware that damage had indeed occurred. Even though he or she is aware that the likelihood of damage is significant. Yet he or she does so regardless. Covered: if an insured party proves that he or she, in his or her capacity as a board member, director or manager, did not know about it and he or she cannot be blamed for it. 8

9 Claims 13. When should an insured party report a claim? As soon as the insured party is held liable. Or it is likely that the insured party will be held liable at a later stage. 14. When should an insured party report a circumstance? As soon as an insured party suspects that an incident may lead to a claim. And it is likely that the insured party will receive the claim after the insurance has been discontinued. The insured party must always report a circumstance in writing. The insured party must provide information in the report about the incident that led to the damage. The insured party must specify who the expected claimants are. The insured party must provide all the information that it has about the claim amount. 15. When is a circumstance considered to be reported? As soon as we confirm in writing that we accept the report as a notice of circumstances. 16. What should an insured party do if they have a claim? The insured party must cooperate with the handling of the claim. The insured party must provide us with all the information required to determine the extent of the damage. The insured party must help us to recover the paid compensation from another party. The insured party must report the incident to the police if it involves, or may involve, a criminal offence. The insured party must notify us if it is involved in criminal or disciplinary proceedings. The insured party must notify us of all the insurances that cover this damage. 17. What should an insured party not do if they have a claim? Say anything about whether or not it is guilty. Say anything about whether or not it is liable. Pay for the damage. Say or do something that is detrimental for us. Answer letters about the claim. For instance, a summons. For instance, a letter in which someone holds the insured party liable. 18. What if the insured party fails to comply with their obligations if they have a claim? Then the insured party will lose the right to compensation for damages and expenses. Only if our reasonable interest is prejudiced as a consequence. Not if the insured party acknowledges the facts. Not if the insured party rightly states that it is guilty or liable. 19. What if the insured party deliberately fails to comply with their obligations if they have a claim? Then the insured party will lose the right to compensation for damages and expenses. If the insured party does so to deceive us. 9

10 Claims 20. Who determines the amount of the claim? We do. What if the claim is higher than the insured amount? Then we will confer with the insured party. 21. Who settles the claim? We settle the claim on the insured party s behalf and we are in charge of this procedure. We may oppose the claim. We may pay the other party directly. We may make arrangements ourselves with the other party. 22. Who may conclude settlements? We may conclude settlements directly with the other party on the insured party s behalf. What if we want to accept a settlement offer and the insured party does not? Then the insured party is entitled to ask for a binding opinion. The third party charged with giving a binding opinion decides whether the insured party is justified in finding that the settlement offer should not be accepted. We and you jointly select the third party charged with giving a binding opinion. The party that is ruled as the more unsuccessful party pays the expenses. The third party charged with giving a binding opinion decides who is the more unsuccessful party. What if the insured party does not want to accept the settlement offer under any circumstances? Then the compensation that the insured party must pay that exceeds the settlement offer is not covered. 23. What if an insured party is also covered under another insurance? The other insurance takes precedence. If the insured party is covered for this if our insurance did not exist. We pay the claim above the maximum amount of the other insurance. We do not pay your deductible for the other insurance. 24. What if an insured party reports a claim after the insurance has stopped? The insurance is no longer valid. It is if you have reported that an insured party may be held liable before the insurance is discontinued. It is if this is stated on the policy schedule that the insurance is still valid. 10

11 Section 2. Damage to client Contents Click on the question to read the answer. Covered 25. When is an insured party liable for damages? Which damages are covered? 12 These terms and conditions only apply if Section 2 is covered. This is stated on the policy schedule. 11

12 Section 2. Damage to client Covered 25. When is an insured party liable for damages? If it is according to the agreement on the policy schedule. Agreement = the Standard Terms. We handle the claim according to the Standard Terms on the policy schedule. Even if the insured party and the client do not have agreements on a settlement. Even if there are several Standard Terms specified on the policy schedule. We choose the standard terms that are best for the insured party. Even if the insured party gets the assignment from someone else on behalf of the client. And the standard terms do not apply. If it is according to the agreements on the policy schedule. 26. Which damages are covered? Damage from a client due to a professional error on the part of an insured party. If the insured party makes the professional error during the implementation of an assignment. And the damage due to this professional error arises during the term of the insurance. And the insured party is held liable for it during the term of the insurance. For damage according to the rules of the Standard Terms or other agreements on the policy schedule. Note: This translation of the original Voorwaarden Beroepsaansprakelijkheidsverzekering, Model no. LBA15 is furnished for the customer s convenience only. The original Dutch text and any applicable Clauses will be binding and shall prevail in case of any variance between the Dutch text and the English translation. 12

13 Contact? Call Even Apeldoorn (055) Our staff will be happy to assist you. Send a letter, P.O. Box 700, 7300 HC Apeldoorn centraalbeheer.nl/zakelijk is a trade name of Achmea Schadeverzekeringen N.V., Ch. of Comm. no and Achmea Pensioen-en Levensverzekeringen N.V., Ch. of Comm. no , which have its registered office in Apeldoorn; Achmea Bank N.V., which has its registered office in Den Haag, Ch. of Comm. no ; and Achmea Investment Management B.V., which has its registered office in Zeist, Ch. of Comm. no