After being given a $200,000 criminal fine for safety breaches that led to the death of an employee, a company director avoided personally paying because he was indemnified under an insurance policy.

The Industrial Magistrate was scathing of the director’s avoidance of the penalty and now the South Australia looks set to close this liability “loophole”.

The need for any contract to provide certainty is, on the face of it, important. This allows each party to the contract to know exactly what their rights and responsibilities are.

As a contract of insurance is, to my mind, the most important contract a business owner enters into in their business life, coupled with the fact that insurance is a product that does not follow the principle of ‘buyer beware”, but rather requires utmost good faith on both parties, it goes without saying that it is more important for an insurance contract to provide contract certainty.

Professional Indemnity specialists are preparing for a sharp increase in cover sought by companies and directors.

More than 150 senior Professional Indemnity and Directors’ and Officers’ Liability specialists were polled at the recent Australian Professional Indemnity Group recent annual conference, with more than a third predicting the highest ever level of claims activity over the next 24 months.