Professional Indemnity Insurance Cover (under a civil liabilities wording)

The purpose of LPMS Professional Indemnity Insurance is to protect Member Firms from the financial effects of settling negligence and other claims by third parties together with their associated legal and other costs.

The insurance does not protect or insure any losses which the Member Firm may suffer due to internal costs which arise as a result of a claim being made or settled.

The LPMS Professional Indemnity Insurance Policies under a civil liabilities wording provide cover for both the traditional negligence liabilities and the liabilities arising from new and revised statutes.

Member Firms are covered for losses arising from having to pay compensation to third parties due to a breach of professional duty by reason of any act, error or omission and also civil liabilities arising from the breach of any obligation imposed by statutes.

'Claims Made and Notified' and 'Occurrence' Policies

With the exception of the General (Public) Liability Policy, the liability insurance policies currently arranged by LPMS are 'Claims Made and Notified' policies. That means that the cover must be in place when a claim is first made against the Member Firm and notified to AON.

Claims Notification

It is an essential part of a member's obligations to LPMS and of the contracts with the insurers that all claims or potential claims are notified without delay to LPMS and the insurers through AON.

Claims Handling Procedures

LPMS policy is that wherever possible LPMS should maintain control of events arising out of a claim situation. It seeks

• to assist and protect a Member Firm from the consequences of a lengthy dispute.
• to endeavour to maintain the standard of professional service.
• wherever practical to restore the claimant's confidence in the Member Firm.

Claims Committee

The Claims Committee examines and advises on all claims notifications. As a matter of policy, every effort is made to deal with claims at Claims Committee level in order to avoid escalation and high legal costs. The object is to assist and advise the Member Firm who is the recipient of the claim and if necessary intercede with assistance to mitigate the problem.

The Claims Committee also acts for LPMS and has a responsibility to look after the interest of, and report to, the insurer.

Legal advice is normally obtained from a solicitor who is a specialist in liability law and who is appointed by the insurer in conjunction with the Claims Committee.

Policy extensions available subject to adjustment in premium

• Run off cover in the event of cessation of business, death or retirement.
• Complimentary run off cover (for retired principals of firms who have insured with LPMS for 5 years prior to retirement).
• Statutory liability (for fines and penalties set by statute).
• Employers liability (for employee claims outside the scope of ACC legislation).
• Employment practices (liability arising out of employment agreements).
• General (public) liability (for property damage or bodily injury to others).

Also LPMS offers complimentary term life cover for the principals of long term Member Firms. The cover is available to principals of Member Firms which have held continuous PI cover with LPMS for at least 10 years.

The cover provides for

• $35,000 upon the death of the insured
• No medical certificate requirement
• Annual renewal

Full details on these optional covers can be obtained from AON New Zealand.