Professional indemnity insurance for miners
Why should miners have professional indemnity insurance?
In the mining industry, many Australians are employed in roles that expose them and others to the risk of negligence claims e.g. making mistakes on the project that affects the local community.
For some mining professionals, this type of cover is a mandatory but even if it’s not a requirement for your chosen profession, this cover is still worth considering.
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Professional indemnity insurance offers important cover for professionals who provide advice or a service to their clients. If you offer specialised advice or services to clients in exchange for a fee e.g mining services, any errors or omissions you make can result in a negligence claim.
What professional indemnity covers
Professional indemnity cover will pay for the costs of your legal defence, as well as provide cover for any compensation you are legally required to pay.
Why is it so important?
In today’s litigious society, dealing with legal action and court cases is par for the course for many businesses. Unfortunately, defending yourself against legal action can cost a substantial amount of time and money. In addition, claims can result in a great deal of damage to the reputation and financial future of your business.
What is covered for miners?
Professional indemnity insurance for miners provides cover for financial loss resulting from an act, error or omission. This could mean negligent advice, a faulty design or failure to advise and the cover is designed to let you continue operating in the event of a claim being made against you
Specific types of claims that professional indemnity covers
While the level and amount of cover available differs from one professional indemnity policy to the next, this type of insurance will typically cover:
- Acts of negligence while a service is being provided
- Accidental infringements on intellectual property rights
- Unintentional breaches of confidence or misuse of information
- The loss of or damage to a client’s important documents
- Accusations of libel or slander against you or your business
- Dishonesty of employees.
A professional indemnity policy provides cover your business and anyone who works on behalf of your business. However, it’s important to point out that cover differs between individual policies and insurance providers, so comparing a number of available policies and seeking expert advice from an insurance consultant are both musts.
The amount of cover you will need in place differs from one business to the next, so it’s impossible to provide one all-encompassing answer to this question. In order to determine the level of cover you require, you’ll need to consider a number of factors and examine the risks you and your business are exposed to.
Consider the size of your largest contract or project
Determining how many third parties are relying on your advice. What sort of cost would be required to defend any claims of negligence made against you? Protracted legal battles can drain your finances very quickly, so it’s important to have a sufficient amount of protection in place.
It’s also important to point out that professional indemnity policies are written on a "claims made" basis, which means you’ll have to take inflation into account when considering claims for past damages. For example, if your negligence caused a third party to lose $100,000 in profits seven years ago, how much would that amount be worth today? The minimum level of cover available on most professional indemnity policies is $1 million, so see an insurance consultant for help determining just how much cover you need. Find out more about professional indemnity insurance
When you apply for a professional indemnity insurance policy, insurers will ask a range of questions in order to determine the risks your business faces and how well set up you are to prevent any negligence claims arising. Questions asked will differ from one insurance provider to the next, but examples of possible questions include:
- Do you have any manuals and/or written procedures in place regarding compliance with all Acts of Parliament that govern your occupation?
- Are those manuals regularly audited by external consultants to ensure they are still up to date with relevant legislation?
- Are you a member of any professional or trade associations?
- Do you subcontract any of your professional activities?
- Do you or any of your employees or contractors hold relevant qualifications for your occupation, including certificates of competency?
- Do you perform any induction processes before new workers or contractors enter the mining site?
- Do you have a risk management system or quality control system in place?
- Do you currently have any professional indemnity insurance cover in place?
Your answers to these questions and more, will allow insurance providers to understand and assess the level of risk you pose. Answer all questions truthfully and be sure to disclose any relevant information, as failure to do so could result in significant problems when you make a claim.
- Costs exclusive limit of indemnity. The limit of indemnity is the maximum benefit an insurance provider will pay in respect to any one claim. A costs exclusive limit does not include insured costs, such as the cost of defending a claim and these costs are on top of the limit of liability.
- Costs inclusive limit of indemnity. As mentioned above, the limit of indemnity is the maximum benefit an insurance provider will pay in respect to any one claim. A costs inclusive limit includes insured costs, meaning that the insured costs involved in defending a claim will reduce the available limit of indemnity.
- Cancellation. This means the termination of a professional indemnity policy before its expiry date. Look for a cancellation clause on most policies which will stipulate that you must request the cancellation of your policy in writing. A premium refund may be available for your cancelled policy, though this will depend on each policy’s terms and conditions.
- Contractual liability. This refers to any liability you assume by contract. Most policies do not cover liability assumed under contract that is additional to the liability which would have existed without a contract being put in place.
- Contributory negligence. This is an act, behaviour or omission from a claimant that shows they did not exercise due care while performing their duties and therefore contributed to their own loss.
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Q. Do I need professional indemnity cover?
- A. This type of insurance is an essential consideration for a range of professionals, including those who work in the mining industry. If you give advice or provide a service, you’re at risk of having a claim of negligence made against you. Having professional indemnity cover in place can ensure you’re protected from the cost and stress involved in defending and/or settling claims.
Q. What does an insurer mean when it says my professional indemnity policy is offered on a ‘claims made’ basis?
- A. This means that, in order to be protected, your policy will need to be in effect when a claim is made against you. On the other hand, other forms of insurance provide cover if an event occurs during the period of insurance—these policies are provided on an ‘occurrence’ basis.
Q. What happens if I’m made aware of circumstances that could lead to a claim?
- A. The first thing you should do is notify your insurer immediately. If a client contacts you and demands compensation or threatens legal action, let your insurance provider know the situation and the circumstances involved.
Q. How do I compare professional indemnity policies?
- A. Take the time to determine what risks your business is exposed to and how much cover you need. Research a number of insurers, seek advice from other people in your industry, obtain multiple quotes and take advantage of comparison tools. If you need expert advice when shopping for cover, speak to an insurance consultant.
Q. What happens when I want to retire?
- A. As professional indemnity cover is offered on a "claims made" basis, you’ll need to continue to have cover in place once you have retired to protect you against past liabilities. To do this, purchase "run off" cover to ensure protection.
Professional indemnity insurance cover is an essential consideration for many professionals, including those who work in the mining industry. In order to ensure you end up with the right level of cover for your needs, compare your options and seek expert advice.Back to top
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