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| Insurance Terminology |
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Below is a brief explanation of some insurance terms used on our website or in insurance policies. For further explanation, please contact our office.
Aggregate Limit of Liability or Indemnity
This is the maximum amount an insurer is required to pay for any claim or a number of claims arising during the period of insurance.
It applies to the following policies; Associations Liability; Crime; Directors and Officers Liability; Medical Malpractice / Professional Indemnity, Information Technology and Products Liability.
Geographical Scope
The Geographical Limits identify the countries in which a wrongful act may be committed in order to give rise to a claim.
Jurisdictional Scope
The Jurisdictional Limits identify the countries in which a claim may be brought to court and which legal jurisdiction will apply. Typically many insurance policies exclude claims brought under USA or Canadian Jurisdictions.
Whilst policies may provide Worldwide Geographic scope, that is of little consolation if the Jurisdictional scope is limited.
Retroactive Date
If a date is specified on a policy, it will not cover claims arising from a wrongful act committed or alleged to have been committed prior to the date specified in the summary. If the retroactive date is shown as unlimited, the policy will respond to any claims or circumstances notified during the currency of the policy of which you were unaware prior to it’s inception.
Inclusive of Costs Excess
Where the amount of the excess is ‘costs inclusive’, all expenses incurred in the engagement of professional advisers shall be at the expense of the insured up to policy excess specified.
Exclusive of Costs Excess
Where the amount of the excess is ‘costs exclusive’, you are not required to contribute to the legal defence costs incurred in the engagement of professional advisers to defend a claim, you are only required to contribute the excess in the event of a settlement.
Inclusive of Costs Limit of Indemnity
Where the limit of indemnity is inclusive of costs and expenses, all expenses incurred in the engagement of professional advisers shall be considered as part of the specified limit of indemnity.
Exclusive of Costs Limit of Indemnity
Where the limit of indemnity is exclusive of costs and expenses, the insurer will pay in addition to the limit of indemnity (subject to their written agreement of same) all expenses incurred in the engagement of professional advisers.
Non-Indemnifiable Loss
means Loss where a Company is unable to or does not indemnify an Insured due to:
- legal prohibition; or
- the Articles of Association, charter, bylaws, contract or similar documents of such Company, including but not limited to any Deed of Access and Indemnity between the Company and the Insured; or
- insolvency under the Corporations Act 2001 or the equivalent law in any other jurisdiction governing a Company’s insolvency; or
- any refusal otherwise to indemnify.
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