Insurance

Insurance

Insurance

Insurance

The professional indemnity insurance arrangement (the PII arrangement) is governed by the Act and the Legal Profession Uniform Law. The coverage provided by the PII arrangement is set out in the annual Master Policy.

The Law Society is required to publish details of the PII arrangement and does so in the Annual Information Booklet which is released prior to the commencement each insurance year.

Law practices are issued with a Certificate on behalf of the Underwriters. The terms and conditions of the Certificate are Schedule 1 to the Master Policy.

Ceased law practices and former practitioners covered under previous PII arrangements are entitled to cover under the Master Policy in respect of civil liability claims arising from the practice of law during their previous periods of coverage.

The Certificates are issued in the name of a law practice’s legal entity and not it’s trading name (if it differs from the legal entity). The Certificates do not include the names of individual practitioners. Who is ‘insured’ is set out in the definition section of the Certificate.

In summary, subject to the terms of the Master Policy, the PII arrangement covers a law practice, its current and past Principals and its current and past employees for claims made during the Insurance Year.

The amount payable by law practices is comprised of 2 components:

  1. the Annual Contribution (Section 163 of the Act), and
  2. any Administration Levy (Section 169 of the Act).

 

For information about arranging new or ongoing coverage under the PII arrangement, please read the Annual Information Booklet.

New applications or request for changes during the insurance year

Under the Act, it is a requirement that a practitioner must be covered under the PII arrangements (unless they are exempt) before commencing to provide legal services.

If a law practice (and its practitioners) are not covered, the Legal Practice Board will not issue the practitioners at that law practice with a Practising Certificates for that year.

A law practice must complete an Application Form, as required by the Act, to obtain coverage.

An insured law practice, and the practitioner, must advise Law Mutual (WA) as soon as possible when a practitioner is employed by submitting an Additional Practitioner Form 1A. Please allow at least 3 business days prior to the commencement date for processing.

When a practitioner ceases work at a law firm or other entity, the employer must notify Law Mutual (WA) of the cessation date as soon as possible.

Information in relation to Principals retiring during the insurance year along with general enquires about practitioners ceasing employment can be found in our Annual Information Booklet.

If a legal practice undergoes a restructure or merger, Law Mutual (WA) must be notified in writing well in advance of the restructure/merger commencement date.

Special conditions apply with regard to restructures which may affect you. For further information, please refer to our Annual Information Booklet – Restructure of Legal Practice.

2023/2024 Application Form – New Legal Practices

Form 1A – Additional Practitioner – when a practitioner joins or commences work at a law practice during the insurance year.

FAQs

Under the Act, it is a requirement that a practitioner must be covered under the PII arrangement (unless they are exempt) before commencing to provide legal services.

If a law practice (and its practitioners) are not covered, the Legal Practice Board will not issue the practitioners at that law practice with Practicing Certificates for that year.  

A law practice must complete an Application Form, as required by the Act, to obtain coverage.  The form should be sent to Law Mutual (WA).

Currently, insured law practices will usually be reminded by Law Mutual by email in February or March that their Application for the next insurance year is due.  

Regardless of that, the Act obliges such practices to submit their application by the end of March.

New law practices should complete and send an Application form to Law Mutual to be received by us at least seven business days before the required commencement date of coverage (being the commencement date of the practice). 

The Act requires law practices to pay their annual contribution and any administration levy by the 15 May preceding the commencement of the Insurance Year (Section 158).  if this date falls on a weekend or public holiday, payment is due the next business day.  

Should payment not be made by 15 May, a 10% late lodgement fee will be imposed pursuant to Regulation 47(2) of the Legal profession Uniform Regulations 2022.  See also Clause 54 of the Annual Information Booklet.  The late lodgement fee will not apply if any payment made by the 15 May is cleared within five (5) days thereafter.

Law Mutual cannot receipt payments until the funds have cleared through its bank account.  Once payments are fully receipted, a copy of the receipt will be emailed to the contact email address provided in the Application Form.

The Legal Practice Board will be notified of compliance with the insurance coverage requirement by the next business day after payment is receipted.

The Law Society can waive payment of the late lodgement fee in whole or part at its discretion.  The basis of its exercise of this discretion is set out in the Annual Information Booklet.  

Law Mutual is not obliged to backdate cover but may do so at its sole discretion, which it will exercise in what it considers to be appropriate circumstances and on any terms it considers relevant.  

Any currently insured law practice that does not pay its invoice and late lodgement fee (if any) before 30 June, will have its invoice withdrawn and cancelled effective as of 30 June and it and its practitioners will have no coverage for the ensuing Insurance Year.

Law Mutual may, at its absolute discretion, reinstate an invoice and accept a payment on or after 30 June.  

If a law practice continues to practice in the ensuing Insurance Year without having applied for and paid for coverage, then:

  1. the practitioners of the law practice may be practising in contravention of the Act;
  2. The law practice, its principals, and its employees ( past and present) will not be covered for civil liability claims; and
  3. the law practice may not be able to recover its professional fees.

Law Mutual is not obliged to offer coverage for the following Insurance Year if a law practice has not paid any outstanding invoices by 15 May.  (Section 158 of the Act)

You can pay your premiums by:

Electronic Funds Transfer (EFT) – direct to Law Mutual (WA)’s bank account – this is most efficient method of payment as funds are usually cleared within two business days. Please quote the respective invoice number on each EFT payment to Law Mutual (WA). Payment details are provided on every invoice generated by Law Mutual (WA).

Cheques – please address to the Law Mutual Fund and mail to Law Mutual (WA). A cheque can also be directly deposited into Law Mutual (WA)’s bank account over the counter at a branch of your banking institution. The funds are subject to clearance and this may take three to five business days.

Credit Card – To pay by credit card, the remittance advice section of each invoice will need to be completed and sent back to Law Mutual for processing via an online credit card payment facility. Credit card payment instructions can be communicated to Law Mutual by phone, email and at its office.  Funds are not available to Law Mutual until they are remitted by the credit card merchant.  This process can take up to two to three business days.  Credit card payments also attract a processing fee of 1.1175% of the invoice amount which covers merchant charges.  

Law Mutual does not offer any instalment payment plan and cannot take cash payments.  

You will need to apply with a premium funding provider if you wish to fund your Annual Contribution by instalments.  

Premium Funding – Premium funding is a facility that usually provides a monthly instalment option.   Applications will need to be submitted to the premium funding provider and may take some weeks depending on the funder’s assessment process. Information and quotations on funding can be sought from the following two more common providers.

Marsh Premium Funding

To make a premium funding application, please click here, or email your request to wayne.ambler@marsh.com with your Law Mutual (WA) invoice.

Westpac Insurance Premium Finance

For general information on premium funding see Westpac Insurance Premium Finance. To request a quote to fund payment of your professional indemnity insurance premium, please email your request to michellejones@westpac.com.au along with your Law Mutual (WA) invoice.

Detailed information can be found in our Annual Information Booklet. If you require a quote for the cost of coverage under the PII arrangement, you can contact Law Mutual (WA) on (08) 9481 3111 or email info@lawmutualwa.com.au

The PII arrangement covers civil liability incurred in connection with the practice of the law. You will need to determine if the work undertaken in these roles is in connection with the practice of law. In that regard, it is noted that the definition of “legal services” in the Legal Profession Uniform Law means “work done, or business transacted, in the ordinary course of legal practice”.

By way of guidance, the title ‘consultant’ is used in many different contexts by law practice and practitioners and does not necessarily refer to an independent contractor who is providing consultancy services to a law practice.  Under the PII arrangement, a consultant who is determined by us to be equivalent to an employee of a law practice is covered, whereas an independent contractor is not.

Typically, an independent contractor will be an individual who is not supervised, and provides services to other entities as well as of the law practice.

For more information on consultants, please refer to our annual Information booklet.

The Legal Practice Board (the Board) will be notified electronically of a relevant practitioner’s compliance with the insurance coverage requirements of the Act, on the business day after all relevant payments have been cleared and receipted.

Law Mutual has no authority in relation to the issuing of Practising Certificates. Practitioners will need to contact the Board directly on (08) 6211 3600.

Pursuant to the Act, which came into effect on 1 July 2022, the Legal Practice Board (the Board) is responsible for all matters with respect to exemptions from the arrangements (exemptions) from that date.

The Law Society does not have the authority to assist with exemptions.  Law practices and practitioners will need to contact the Board directly on (08) 6211 3600.

Are you properly protecting your
practice from professional liability claims?

Are you properly protecting your practice from professional liability claims?

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