Public Liability Insurance: A very broad term for insurance covering liability exposures for individuals and business owners. It provides broad coverage, generally including all exposures for property damage and bodily injury.
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Professional indemnity insurance is an essential safeguard for practitioners and businesses that provide expert advice or services. This type of insurance helps to protect professionals against legal costs and claims for damages from an act, omission, or breach of professional duty in the course of their work. For Australian professionals, where litigation is increasingly common, it's a pivotal component of risk management. - read more
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Professional indemnity insurance is an essential safeguard for practitioners and businesses that provide expert advice or services. This type of insurance helps to protect professionals against legal costs and claims for damages from an act, omission, or breach of professional duty in the course of their work. For Australian professionals, where litigation is increasingly common, it's a pivotal component of risk management. - read more
Insurance serves as a cornerstone in the foundation of a thriving business, mitigating various risks that can surface in the unpredictable world of commerce. At its heart, business insurance is about safeguarding the company's financial stability. It provides a critical safety net, ensuring that a single event doesn't have the power to derail years of hard work. - read more
Indemnity insurance may sound like complex legalese, but at its core, it's a straightforward and crucial protection for businesses of all types and sizes. Simply put, it's a form of insurance that shields a business from bearing the full brunt of financial losses due to lawsuits or claims made against it. - read more
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Insurance Claim Denied Due to Undisclosed Conviction
Insurance Claim Denied Due to Undisclosed Conviction
2
An insurance policyholder recently experienced the repercussions of non-disclosure after his claim was rejected by an insurer upon the discovery of an undisclosed traffic conviction.
The undisclosed criminal traffic offense led to repercussions from both the insurer and a financial authority, serving as a cautionary example for transparency in insurance agreements.
Holding a motor insurance policy covering a fleet of three trucks under his company, a director submitted a claim when one of the vehicles suffered fire damage. However, due diligence performed by Zurich Australia unveiled that the director had a criminal traffic conviction on record dating back to March 2021 that was not previously disclosed.
The insurance company took the position that this omitted information was pivotal and declared that it would have otherwise refrained from underwriting the policy. The director's defense rested on the claim that he perceived the incident not as a criminal offense but rather a trivial issue, describing the non-disclosure as unintentional.
Nevertheless, the Australian Financial Complaints Authority (AFCA) emphasized that the director faced pointed questions upon the insurance policy's inception that should have signaled the need for divulgence of the conviction. The adjudicator from AFCA concluded that the director, or any prudent individual in a similar position, ought to have recognized the importance of such information to the insurer's risk assessment.
The reported incident draws attention to a 'relevant failure' under the Insurance Contracts Act 1984, with Zurich within its rights to narrow its liability and proceed with the policy's annulment. The AFCA adjudician expressed that obliging the insurer to settle the claim under these circumstances would be unjust.
In the aftermath, the insurance company is required to return the paid premiums post cancellation of the policy to the policyholder along with accrued interest - a measure to settle the books between the parties involved.
This situation signals to policyholders the vital necessity of full transparency when acquiring insurance coverage. Insurance applicants and holders should be aware that nondisclosure, even unintended, can have significant consequences, impacting both the validity of claims and the standing of policies.
Published:Thursday, 2nd May 2024 Source: Paige Estritori
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