C/- Aon New Zealand Professional Risks Insurance Proposal Form for New Applicants P O Box 2517 Wellington 6140 Tel (04) 819 4000 Fax (04) 819 4106 E-mail: abacus@aon.co.nz Website: www.abacus.org.nz This Proposal Form will constitute a part of the Professional Indemnity or other Liability Insurance Contracts as may be arranged through Abacus under Master Policies on your behalf. If there is insufficient space to complete any answer, please continue on your firm s headed paper or provide additional details in an accompanying letter. Section A - Professional Indemnity Insurance (Civil Liabilities/Claims Made & tified Basis of Insurance) 1. Details of Your Practice Member : For Abacus Office use only Name of Practice: Mailing Address: Post Code: Telephone: Facsimile: Web Site: E-mail Address: Contact Person: Date Practice first established: 2. Other Entities to be Insured If you are a Corporate Practice do you continue to provide any of your services as a partnership or as a sole practice outside of the corporate entity? Yes If your Practice has any service companies, trustee companies or other legal entities that are to be included with your Practice as joint insured parties, please give full details below indicating the activities of each entity. Name of Company/Entity Activities Abacus_New_Business_Proposal Abacus Association Inc Page 1
3. Public Practicing Certificate(s) Does each Partner or Director in your Practice hold a current public practising certificate from NZICA? If, please give details below. Yes 4. Your Other Offices and Joint Insured Entities Address Telephone Facsimile 5. Your Partners or Directors Please provide details of the Principal(s), Partners or Directors of your firm: Name Date Qualifications How long as a Partner of Birth & date of this previously and with whom practice If a Sole Practitioner please enter your own details above 6. Run Off Cover Please list Partners or Directors who have retired or left or are deceased for whom Run Off cover is required: Names of Former Partners or Directors Date of Retirement or Resignation or Death Contact Address 7. Previous Businesses Do you require coverage in respect of any previous accounting or consulting businesses? Yes If Yes, please give full details below. Abacus_New_Business_Proposal Abacus Association Inc Page 2
8. Number of Partners or Directors & Staff Partners/Directors Staff Sub-Totals Qualified Accountants Others (n-qualified) Office Juniors & Typists Any Others (Please Specify below) Totals 9. Your Fee Income Please give details of your Practice s total gross fees and commissions. Received or rendered during the last financial year (excluding GST) $ Estimated for the ensuing 12 months (excluding GST) $ If it is a new practice please just insert an estimate in. 10. Your Activities Abroad Does your Practice extend to or has it ever extended to activities overseas? Yes If Yes, please advise: What proportion is/was this of your Practice s total business and in what countries? % % % What is your method of handling such business? Abacus_New_Business_Proposal Abacus Association Inc Page 3
11. Percentages of your Total Work In which of the following activities does your Practice currently engage? Please give an estimate of the percentage of total fees of your firm represented by each category. Commercial Audits % Own Trustee Company % Legal Practitioners Audits % Share Broking Activities % Receiverships/Liquidations & the like % Directors fees % Commercial Taxation % Financial Planning % Pure Accounting Services % Mortgage Broking % Business/Share Valuations/Evaluations % Insurance Agency Activities % Consultancy % Other (Please Specify below) % Secretarial/Share Registration % Investment Advice/Commissions % Total: 100% Do you expect any substantial changes in the forthcoming year? Yes If Yes, please give details below: (c) If you perform audits are you assisting other practitioners who are primarily responsible for the audits? Yes If Yes, please give details below: (d) Are any publicly listed companies or financial institutions (including finance companies or credit unions) being audited? Yes If Yes, please give details below: (e) In the last year how many audits and/or statements made by your firm have been included in any prospectus issued to the public? Insert Number (f) Please provide details of any previous or current audit clients who have been placed in liquidation, receivership or statutory management in the last year Abacus_New_Business_Proposal Abacus Association Inc Page 4
12. Previous Insurance Is the firm currently insured against professional liabilities through any Insurer? Yes If, has it ever been insured? 13. Details of any Previous Insurance Amount of Cover $ Excess $ When Lapsed Last Annual Premium $ Name of Insurer or Broker 14. Financial Planning/Mortgage Broking Activities Is your Practice involved in financial planning to the extent of recommending, advising, managing, and reporting on or arranging investment portfolios or personal insurance for Yes clients? If the answer is Yes, is your Practice IAFP Certified? Yes Is your Practice involved in Mortgage Broking activities? Yes (c) Is your practice involved in Insurance Agency/ Broking activities? Yes If you have any separate entities undertaking any such activities please advise the names of the separate entities or companies below. 15. Other Consultants or Agents Do you arrange for other accountants or any consultants or agents to do part of the work that, in accordance with professional practice, is your professional responsibility? Yes If Yes, do you request them to carry their own professional indemnity insurance cover? Yes 16. Other Associations Is there any investment or finance company or other business, apart from those indicated in answers to Questions 1 & 2, operated in association with the Practice in which the Partners or Directors or Employees or any of their families have a financial interest? If Yes, please give details below. Yes Abacus_New_Business_Proposal Abacus Association Inc Page 5
17. Directorships Is any Partner or Director of your Practice or any Employee on behalf of your Practice, acting as a Director of any other body corporate? Yes If Yes, please give details of each Directorship below. If there is insufficient space below, please attach a separate list to the back of this Proposal Form. 18. Trusteeships Do any Partners or Directors or Employees of your Practice act as Trustees? Yes If Yes, please give details of each appointment below. If there is insufficient space below please attach a separate list at the back of this Proposal Form 19. Contracted Consultancy Services Do any of your former Partners or Directors who have retired provide any ongoing consultancy services for and under the auspices of your Practice? Yes Do you engage any personnel on a contract basis, other than your normal employees in respect of whose remuneration you make PAYE deductions, either on a part-time or full time basis to perform services for and under the auspices of your practice? Yes If the answer to or above is Yes, please give details of such appointments below. 18. Absences From Practice (for Sole Practitioners only) What arrangements do you have to cover the conduct of the practice during temporary absence whilst away on business, leave or sickness or in any unforeseen emergency? Please give details below. Abacus_New_Business_Proposal Abacus Association Inc Page 6
19. Insurance History Has any Insurer for your Practice or for any Partner or Director: (c) (d) Declined a proposal for Professional Indemnity or other liability insurance? Required an increased premium or imposed special terms? Declined to renew the insurance? Cancelled the insurance? Yes Yes Yes Yes If Yes, please give details below. 20. Your tifications History Have any claims been made against your firm or any of your firm s present partners or predecessors in business during the past 5 years or have any claims or notifications of possible claims been made during this period to any Insurer? Yes If Yes, please give full details below. 21. New tifications Apart from the matters referred to under Question 20, are you aware of: (c) (d) Any error or omission which has occurred in your practice or any previous practice which has not previously been reported to any Insurer? A dispute between third parties concerning work with which you were involved, which may give rise to a claim? Any dispute between any third party and any other parties for whose activities you may be vicariously liable which may involve you in a claim? Any third party intimation that you might be held liable in part or in whole for any loss? Yes Yes Yes Yes If any answer above is Yes, please give full details below. Abacus_New_Business_Proposal Abacus Association Inc Page 7
22. Limit of Indemnity Please indicate the basic Limit of Indemnity you require for the Professional Indemnity Cover: $250,000 $300,000 $400,000 $500,000 $600,000 $750,000 $1,000,000 $1,250,000 $1,500,000 $2,000,000 $2,500,000 $5,000,000 Other - Please state amount required $ 23. Extensions to the Basic Indemnity The Automatic Extensions - The following extensions are automatically included within the basic indemnity. Defamation Employees Dishonesty Forged Transfers Quasi-Judicial Representation Costs Contracted Personnel Consequential Costs Professional Fees Recovery Automatic Reinstatement The Optional Extensions -The following extensions are optional. Please indicate any of the optional extensions that you may require. Fidelity Yes Dishonesty of Partners or Directors te: t applicable/available for Sole Principal Practices Yes Loss of Documents (Property Damage) Financial Planning/Mortgage Broking Activities Yes Yes 24. Deductible The amount of the Deductible you select to apply to each and every claim. you may require. Please indicate the deductible $2,000 $2,500 $5,000 $7,500 $10,000 $15,000 $20,000 Other- Please State Amount $ Abacus_New_Business_Proposal Abacus Association Inc Page 8
Sections B to I - Optional Companion Liability Covers Please now complete each of the following Sections B to I if you require a quotation for any of the following Companion Liability covers. If you do not require any of these covers, then to complete this proposal form please go directly to the Declaration to be signed on Page 14. Section B - Trustees Liability - Optional Cover Claims made against any of the Partners, Directors or Employees, arising out of any Trusteeship appointments held on behalf of the Practice. This is a Claims Made & tified Basis of Insurance. B1. Your Trustee Appointments Please state the Total number of Trusteeships currently held by your Practice on behalf of your Clients Important te: This insurance is not intended to cover trading trusts that have a Company as the sole Trustee. Insurance for any trading trusts that have a Company as the sole Trustee are subject to additional underwriting information. If you require a quotation, please provide a copy of the last audited financials for each Trust in this category for which cover may be required. Section C - Directors & Officers Liability - Optional Cover Claims made against any of the Partners, Directors or Employees, arising out of any appointments as Directors or Officers of your own or Client companies. This is a Claims Made & tified Basis of Insurance. C1. Your Directors & Officers Appointments Please state the Total number of Directorships currently held: In your own Company or Companies On behalf of Client Companies Important te: This insurance is not intended to cover any Listed Public Company Appointments. If you require a quotation for such appointments then please provide a copy of the last audited financials for each Listed Company for which an individual cover may be required. Abacus_New_Business_Proposal Abacus Association Inc Page 9
Section D - Statutory Liability Insurance - Optional Cover (Legal defence costs, certain fines and penalties under various statutes but excluding fines and penalties imposed for breach of the Health & Safety in Employment Act 1992 and Amendments - Claims Made & tified Basis of Insurance) D1. Limit of Indemnity Please indicate the Limit of Indemnity you may require: $100,000 (Minimum) $250,000 Other - Please state amount $ D2. Deductible The amount of the Deductible you select to apply to each and every claim. Please indicate your preference below. $500 (Minimum) $1,000 $5,000 D3. Acts included in this Cover Any Act of the New Zealand Parliament or any amendment to or re-enactment including the statutory regulations of such Acts, other than certain Acts as may be excluded under the Policy. Please note that within the exclusions, amongst others, are: - those Acts enforced by any revenue collecting authority. - Acts that are against public policy and are uninsurable. - any fines, penalties or infringement fees imposed under the Health & Safety in Employment Act 1992. D4. Entities included in this Cover This cover will automatically apply to your practice as named in Section A and your Directors, Principals and/or Staff in relation to the professional activities and duties within the practice. If you require Statutory Liability Cover for any other entities with whom you hold appointments as Directors or Trustees then please provide full details of the entity and the financials for entities for which you require cover. Important te: Civil Claims made by clients and other third parties founded on breach of statutory duties in the performance of professional work, as distinct from fines or penalties arising solely from statutory enforcements, are insured but subject to the terms and conditions of the Professional Indemnity Section A. Abacus_New_Business_Proposal Abacus Association Inc Page 10
Section E - Employers Liability Optional Cover Personal Injuries caused to Employees that are not covered under the provisions of the Accident Compensation Legislation. This is a Claims Made & tified Basis of Insurance. E1. Limit of Indemnity Please indicate the limit of indemnity you may require: $100,000 (Minimum) $250,000 Other - Please state the amount $ E2. Deductible The amount of the deductible you select to apply to each and every claim. Please indicate your preference below: $500 (Minimum) $1,000 $5,000 Section F - Employment Practices Liability Optional Cover Coverage for claims made against Employers by current, former or prospective Employees for breaches of their Employment Contracts and breaches of certain provisions of the Human Rights Act 1993 and Privacy Act 1993. This is a Claims Made and tified Basis of Insurance. Legal costs incurred in the defence of Injunctions or Applications for Reinstatement brought against Employers by current, former or prospective Employees. F1. Limit of Indemnity Please indicate the Limit of Indemnity you may require: $100,000 (Minimum) $250,000 Other - Please state the amount $ F2. Deductible The amount of the deductible you select to apply to each and every claim. Please indicate your preference below: $2,500 Minimum) $5,000 Abacus_New_Business_Proposal Abacus Association Inc Page 11
Section G - General (Public) Liability - Optional Cover Claims by Third Parties alleging physical damage to property or bodily injury. G1. Limit of Liability Please indicate the limit of indemnity you may require: $1,000,000 (Minimum) $2,000,000 Other - Please state amount $ G2. Deductible The deductible applying to each and every claim is: $500 G3. Please give details of any of the following which are used or for which the Practice is responsible, in the course of the business: Passenger or goods elevators, escalators, hoists, cranes or other lifting equipment. Unregistered mechanically propelled vehicles (c) Car Parks. Section H Legal Defence - Optional Cover Legal Expenses cover that provides for emergency legal advice and legal costs if a Partner, Director or Employee is wrongfully sued or charged with a work related criminal offence. The cover includes legal defence for offences under most Statutes and certain types of traffic offences. H1. Limit of Liability The Limit of Indemnity available is $50,000 any one claim and in the aggregate for all claims during the period of insurance. H2. Deductible deductible applies. H3. Please indicate if you require this cover H4. If you require this cover please advise below if any of the Partners, Directors or Staff have faced any criminal or serious traffic charges and or been convicted of any criminal or serious traffic offences. Abacus_New_Business_Proposal Abacus Association Inc Page 12
Section I Internet Liability Optional Cover Claims by Third Parties alleging wrongful acts arising from the use of Internet or Electronic Mail or any Electronic Network. This is a Claims Made & tified Basis of Insurance. I1. Limit of Indemnity Please indicate the limit of indemnity you may require: $250,000. (Minimum) $500,000 I2. Deductible The deductible that applies to each and every claim is: $1,000 Sections B to I Prior tifications If you have completed any of the Sections B to I for Optional Companion Liability cover(s) have any claims for the type of insurance requested under these Sections in this proposal ever been made against you or have any circumstances ever occurred which would have resulted in a claim under the proposed insurance under these Sections had the coverage been in force? If Yes, please provide details below. After enquiry, are you aware of any circumstances that could give rise to a claim, fine or penalty against you? If Yes, please provide full details below. Abacus_New_Business_Proposal Abacus Association Inc Page 13
IMPORTANT NOTICE TO ALL PROPOSERS - RATINGS INFORMATION COMPLIANCE WITH STATUTORY REQUIREMENTS The Insurance Companies (Ratings and Inspections) Act 1994 requires us to provide you with information about your Insurers. Your insurance will be placed with Insurers whose Ratings in terms of the Insurance Companies (Ratings and Inspections) Act 1994 will be advised to you prior to your acceptance of the insurance(s). INSURANCE LAW REFORM ACT 1977 Misstatements in Contracts of Insurance By the terms of this Act a policy may be avoided if any statement made in the proposal or other document in completion, reinstatement or renewal is substantially incorrect and material. DEFINITIONS: (1) SUBSTANTIALLY INCORRECT A statement is substantially incorrect if a prudent insurer would consider the difference between what is stated and what is correct material. (2) MATERIAL A statement is material if that statement would have influenced the judgment of a prudent Insurer in setting the premium or determining acceptance or continuation of the risk upon substantially the same terms. DECLARATION I/We declare that the statements and particulars in this proposal are true and I/We have not mis-stated or suppressed any material facts. I/We agree that this proposal, together with any other information supplied by me/us shall form the basis of any Contract(s) of Insurance that may be effected thereon. I/We undertake to inform the insurers of any material alteration to these facts whether occurring before or after completion of the Contract(s) of Insurance. Signing this Proposal Form does not bind the Proposer or the Insurers to complete the Insurance(s). Dated this day of 20 For and on Behalf of the Firm Signature of Partner or Director Abacus_New_Business_Proposal Abacus Association Inc Page 14