Glossary of Terms used in ACTIA Agreements and Contracts
Any sudden event which is unintended.
The aggregate is the total amount payable for all events resulting in a claim for any period of insurance. For example if the annual aggregate is $20,000,000 and there are two claims made for $10,000,000 each - the annual aggregate will be exhausted and further claims will be required to be paid by the insured.
Any one loss
Any one claim or event / occurrence that results in a claim.
The Territory maintains a non-owners Aviation policy. Cover is provided for the Territory’s legal liability arising out of their aviation and aircraft operations in connection with owned airstrips and/or elsewhere non-owned airstrips and/or elsewhere non-owned aircraft liability. The owners and operators of any aircraft used by the Territory are required to effect and maintain the appropriate Aviation insurance.
Claims Made Wording
A claims made wording provides indemnification for claims made and notified during the period of insurance. Should an insured become aware of a claim or an incident which may give rise to a claim it must be reported in the period that the insured first became aware of the event. The insurer is on risk only during the stated policy period for:
- Claims arising during the policy year, and
- Claims first made against the insured (and notified to the insurer) during the policy year arising from events/losses in prior years.
Thus insurer is providing current cover and limited retrospective cover only and can close his book at the end of the policy year. For example: if a writ is received in 2005 regarding a financial loss (event) arising from an inappropriate design in 1999, then (assuming that there were no prior indications of the claim) it is the 2005 policy which would respond.
To ensure that the policy will respond any claim or incident likely to give rise to a claim it must be reported within 10 business days.
Coverage in connect with a suit which is brought against an insured by another party that has insured status under the same policy. Cross liability provisions will treat each party as separate entities whilst allowing for the parties to claim against the policy, subject to the terms and conditions of the policy wording. Some policies will exclude cover for cross liabilities under “insured versus insured” exclusions.
Directors and Officers insurance
Directors and Officers insurance provides cover for “directors and officers” of the Territory. Directors and Officers will provide relief for managerial errors made by individuals or a group of individuals providing that they are acting honestly and without recklessness. (e.g. not fraudulently) It is intended to cover ACT public servants, statutory officers and appointees (i.e. members sitting on boards, committees and the like) who provide management functions; management advice; or recommendations.
The term entity has been used in various insurance documents in order to describe a number of business relationships or titles used within Government including but not limited to: Agency; Business Unit; Authority; Community Council, Advisory Board, Board, Association or Territory owned Company.
Hold Harmless Agreement
A “hold harmless” clause or agreement is an agreement to hold the other party to a contract harmless. That is that one party can not sue the other party for losses, irrespective of the fault of the other party.
Any circumstances which may subsequently give rise to a claim.
Industrial Special Risk
The Industrial Special Risks (ISR) policy was designed to provide coverage for larger organisations by combining a number of previously separate policies (fire, theft, money, glass and consequential loss). The ISR is a complex insurance contract which can be tailored to suit the needs of the individual insured. The policy is often referred to as a single all encompassing policy as it provides cover for loss or damage by any cause not otherwise excluded under the policy.
Section One: Material Damage Accidental damage Fire Theft Money
Section Two: Consequential Loss Gross Profit Claims Preparations costs Payroll Additional Increased costs of working Loss of rent
An insurance incident which has developed to the stage where there has been a demand for compensation which may or may not involve legal proceedings.
Joint Insured or Co-Insured Clause
A clause in a contract which requires the insured to add the other party to the contract to their insurance policy as a joint insured. This will give the other party equal rights to claim under the insurance policy. It will also remove the ability to recover costs off the other party should they have been liable for the loss or damage claimed.
Medical Negligence (may also be referred to as Medical Malpractice)
Medical Negligence is a specific professional indemnity policy which provides cover for the liability arising out of a persons conduct as a healthcare or medical services provider. Medical negligence policies provide cover for an act, error or omission by a healthcare provider which deviates from the accepted standard of practice with in the medical community and which causes an injury or loss to a patient. An example of a medical negligence claim is a dentist removing the incorrect tooth.
Negligence is defined as the failure to use the reasonable care that a prudent person would have used in the same or similar circumstances. For a person to be held negligent they must have done something that they ought not to have done or not done something that they should have done.
Cover terminates at the end of the period of insurance.
Cover is not automatically given - a proposal must be completed and submitted for insurance to be considered for the new period of insurance.
A proposal is required to be completed by the insured each and every renewal.
Policies with an occurrence wording will require the claim to be lodged on the policy that was current on the date that the incident resulting in the claim occurred.
For example: If a writ is received in 2008 regarding an incident (event) that caused an injury to a member of the public in 2000, then the public liability policy which was in effect at the time of the loss in 2000 would respond to the claim.
A policy class is a specific insurance classification such as:
- statutory classes
- professional insurances
- property insurances.
A product is any commodity, article or thing (after it has ceased to be in the possession of the insured or under the control of the insured) that is manufactured, constructed, erected, installed, treated, serviced, repaired, sold, handled, distributed by the insured.
Products liability provides coverage for any personal injury or property damage suffered by a third party arising out of the insured’s (the Territory’s) products.
Professional Indemnity is liability arising out of a persons conduct as a professional. Professional indemnity provides cover for personal injury, financial loss or damage to property arising out of professional advice or professional services provided.
For professional indemnity to apply: A person must be professionally qualified or have specific skills in an area of expertise. The general public because of the professional qualification or area of expertise are entitled to rely upon the professional advice – therefore a duty of care is owed to provide a level of service in line with the expertise or standard of the profession.
For example: A wrongful action could be a real-estate agent failing to carry out a valuation in the agreed time frame which has resulted in the owner of the property suffering a financial loss for loss of rent.
Public oiability provides cover for any injury / death or damage to the property of another person as a result of negligence. For a public liability policy to respond:
- an incident must occur
- as a result of that incident a third party has experienced bodily injury; financial loss or damage to property.
The insured (the Territory) is legally liable for the loss suffered. That is; negligence must be established.
For example; you did something you should not have done, or did not do something that you should have done that has resulted in the loss suffered by the third party.
Liability is NOT a person forgetting to tie their own shoe laces and tripping over them.
A third party is a person, non-government entity, company or corporation that is independent to Government.
Travel Insurance (Corporate Travel Policy)
Travel insurance is intended to cover financial expenses, medical expenses, and other losses incurred while travelling for work related purposes internationally.
The most common risks that are covered by travel insurance include (but are not necessarily limited to):
- delayed departure Loss,
- theft or damage to personal possessions and money (including travel documents)
- delayed baggage (and emergency replacement of essential items)
- medical expenses
- emergency evacuation/repatriation
- overseas funeral expenses
- accidental death, injury or disablement benefit
- legal assistance
- personal liability.
Directors and Officers Definition: An act, error or omission including breach of duty, breach of trust, neglect, misstatement, misleading statement, misrepresentation or breach of warranty or authority committed or allegedly committed by an insured person in his or her capacity as director or officer.