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Professional Indemnity Insurance Continuous Cover


How does Continuous Cover work? Continuous Cover provides cover for a claim arising out of a known circumstance that should have been notified to the insurer in a prior policy period providing that the following points are taken into account: •

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The current insurer was the insurer at the time the policyholder first became aware of the matter Continuous Cover was held with the insurer If the insurer had been notified of a circumstance, the policyholder would have been covered under the policy in force at that time, and the policyholder notwithstanding the known circumstances exclusion. The claim, nor the known circumstance, was previously notified to any insurer. The lesser limit of the two applicable policies will apply. Delayed notification may be taken into account in the adjustment of the claim should the insurers position be prejudice Issues of 'non-disclosure' and 'known circumstances' exclusions are not raised Fraudulent non-disclosure or misrepresentation does not occur


Continuous Cover and Section 21 Insurance Contracts Act The benefits of a Continuous Cover clause do not forgive a policyholders overriding legal duty of disclosure under Section 21 of the Insurance Contracts Act (the Act): • An policyholder has a duty to disclose every matter that is known could be relevant to the insurer accepting the risk. • Section 28 of the Act prescribes the remedies available to an insurer if it could be shown that an policyholder failed to comply with its duty to disclose.


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Presentation Disclaimer –– “This material contains general information only and may not suit your particular circumstances. To decide if a policy is right for you please carefully read the relevant Product Disclosure Statement (PDS) and/or Policy wording. A copy of the PDS or policy wording is available by contacting our office on 1300 739 861;” Disclosure Statement – “Optimum Insurance Services Pty Ltd is a Corporate Authorised Representative of Insurance Advisernet Australia Pty Ltd (Car No. 291220), Australian Financial Services Licence No 240549, ABN 15 003 886 687.”


The importance of continuous cover