Minimum standards for professional indemnity insurance—law practices except barristers
78 Minimum standards for professional indemnity insurance—law practices except barristers
This rule sets out, for the purposes of section 210(1)(b)(i) of the Uniform Law, the minimum standards for professional indemnity insurance in relation to a law practice except that of a barrister.
Professional indemnity insurance must cover any civil liability, including professional negligence, incurred in connection with the legal services provided by the law practice.
Professional indemnity insurance must operate on a “claims made” basis and cover claims made or notified during the period of insurance and claims made after the period of insurance arising from circumstances notified during the period of insurance.
Professional indemnity insurance must provide minimum coverage of $2 million for each and every claim under the insurance, inclusive of the claimant’s costs and defence costs.
Professional indemnity insurance must cover all current and former principals or employees engaged in the legal practice of the law practice.
Professional indemnity insurance must provide indemnity for run-off liabilities for a minimum of 7 years from—
the date (during the period of insurance) that the law practice ceases to practise, or
the date of expiry of the period of insurance,
if the law practice is not covered from the relevant date by a further policy that complies with these minimum standards, including the requirement for run-off cover under this subrule.
Note.
Professional indemnity insurance may be provided for by a scheme such as a run-off scheme.
In the case of a claim arising from dishonesty or fraud, professional indemnity insurance must not exclude indemnity for the liability of a principal of, or employee engaged in the legal practice of, the law practice who was not knowingly connected with any dishonesty or fraud related to the claim.
Professional indemnity insurance may exclude cover to the extent that the subject matter of a claim entitles a claimant to claim and receive compensation from a fidelity fund, guarantee fund or similar cover provided under jurisdictional legislation.
Professional indemnity insurance must not provide the insurer with a right to avoid, cancel or reduce cover because of—
any innocent or non-fraudulent non-disclosure or misrepresentation by the law practice, or
any late notification of a matter or claim,
but may provide for reimbursement of the insurer for prejudice caused by late notification of a matter or claim.
Professional indemnity insurance must provide retroactive cover.
Note.
See also—
• section 95 of the Legal Profession Uniform Law Application Act 2014 of New South Wales, which provides for the approval of types of insurance policies, their level of insurance and their terms and conditions
• sections 13 and 120 of the Legal Profession Uniform Law Application Act 2014 of Victoria, which provide for the issue or provision of insurance policies and the determination of arrangements for insurance policies including their terms.
The statute text is free to read above. View subscription options to unlock the case-law research tools for each provision.