• In a worst-case scenario, if something went wrong, what would be the financial loss to third parties?

  • What is the potential for bodily injury claims, and even multiple injuries?

  • What is the potential for consequential economic loss to any third party?

  • What is the potential for multiple claims in any one policy year?

  • What is the level of potential legal and investigation costs which may be incurred by a successful claimant over the life of the claim

  • What is the level of potential defence and investigation costs incurred by or on the insured’s behalf over the life of the claim?

  • Is the policy limit inclusive of defence costs or not? 

  • How long may a claim take to settle? Sometimes this can be eight to ten years or longer, which means the legal costs and interest liability will mount, as will the effect of inflation.

  • How many parties are likely to be implicated in any claim or action? The more parties there are, the more difficult and costlier it is to settle a claim.

  • What is the nature, scale, and complexity of work done in the past and during the policy period? (Note: a policy covers exposure from past work where the retroactive date has been extended to do so).

  • What is the overall contract/project value the insured works on? The insured may have a small part and only earn a small amount of fees, but their acts, errors or emissions could delay the entire contract/project.

  • How many prior years are there where risk exposure may arise? In some cases it may take years before a liability becomes apparent to the Insured.

  • What is the exposure from ‘incoming principals’ risks at prior corporate entities, or merged or acquired entities?

In general, a sum insured of less than $5 million is unlikely to be adequate for even a small practice which assesses its exposure as low.

A $1 million sum insured is no longer adequate for many Professional Indemnity or

Directors & Officers Liability policies – these days you generally need at least $5 million.

For more information, please visit our website: www.optimuminsurance.com.au




Disclaimer“This material contains general information only and may not suit your particular circumstances. To decide if a policy is right for you please carefully read the relevant Product Disclosure Statement (PDS) and/or Policy wording. While we have exercised due care and skill in preparing this information, Optimum Insurance Services (Optimum) does not accept any legal responsibility or liability for negligence or otherwise to you or anyone else who seeks to rely on this information. This includes, without limitation, loss arising from a possible failure of the information to comply with statutory or regulatory requirements or the failure of the information to identify other terms and conditions beyond those considered in this document. You should obtain advice to ensure that your policy provides adequate cover for your circumstances.

Optimum Insurance Services Pty Ltd is a Corporate Authorised Representative of Insurance Advisernet Australia Pty Ltd (Car No. 291220), Australian Financial Services Licence No 240549, ABN 15 003 886 687.”

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Optimum Insurance Services Pty Ltd is a Corporate Authorised Representative (No. 291220) of Insurance Advisernet Australia Pty Ltd (AFSL No. 240549).


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