What's Happening?

Facebook Twitter Youtube Linkedin

NEED HELP? QUESTIONS@FIA.ORG.ZA

become A FIA member TODAY
member login

COVID-19: at the centre of the storm – the ‘perfect storm’

ARTICLE BY

  • Herwee Ebersohn

SHARE THIS POST

The Merriam-Webster dictionary defines a perfect storm as a critical or disastrous situation created by a powerful concurrence of factors.  To weather, the perfect storm demands preparation and immediate response, to ensure smooth sailing. 

In 2008, a container vessel departed from Le Havre to Algeciras, Spain in force 4 to 5 winds.  Overnight the weather deteriorated and the vessel’s speed was reduced.  By 1200 the wind had further increased to force 8 to 9 with rough seas.  At 1250 the bow thruster room bilge alarm sounded and several holes were found in the port side of the bow thruster room shell plating through which water was pouring.  The port anchor chain lashing was found to have released and the anchor had fallen, against the windlass brake tension, into the water.  As the vessel continued to pitch in the heavy seas, the anchor impacted against the hull, causing the damage.  It was later found that five adjacent compartments had also flooded.  Despite the forecasted poor weather conditions, no specific heavy weather checks had been carried out.  The incident reveals how important preparation is since a pre-warning on weather conditions is available. 

There is no reason why your Professional Indemnity (PI) insurance for Attorneys must be any different.  We have compiled a list aiming to provide a collective approach if you are renewing your firm’s PI insurance during the coronavirus pandemic. 

Firstly, an expert broker is still your best financial bet.  An expert’s broker role has multiple facets ranging from resource linker, knowledge conveyor and translator.  It is important to mediate between the production of knowledge and its application; define and interpret situations; and set priorities for action.  Marsh is one of these expert brokers, who rely on trust by their clients. 

Secondly, one size doesn’t fit all – at Marsh, we understand the shifting dynamics of a client’s demand for PI insurance.  In this mature industry, it has become clear that ignoring client preferences and past behaviours is not good for business while incorporating a more client-focused perspective most definitely is. 

Thirdly, advance preparation is the key to success.  Fewer clients still leave their PI insurance to the last few days (even on the last day) before expiry.  Meaningful collated information reveals information gaps, guides further collection and analysis, and provides a framework for submitting underwriting information to insurers. 

Fourthly, the dreaded proposal form.  Alas, the proposal form is still the most important and basic document for purchasing PI insurance and/or renewal.  Proposal forms serve, among other things, to elicit information.  They provide underwriters with the information they need to decide whether or not to accept the proposal and, if so, at what price and on what terms.  It is vital to disclose all material facts as this does not relieve you of the legal responsibility. 

Lastly, the ABC of renewal submission.  A detailed renewal submission will provide a more considerable outcome.  Ensure that your firm has policies and procedures in place to mitigate and manage the risk.  What the firm has done or is doing to avoid recurrence is useful during the engagement process with insurers. 

In the wake of COVID-19, we can expect challenging renewals.  At a time like this, a Business Continuity Plan is a must for firms of all sizes.  In all likelihood, insurers will be assessing how a firm will continue operating during a COVID-19 (or other) unplanned disruption in service more rigorously.  Nonetheless, we urge our clients to renew their PI insurance promptly.  Firms need to have their PI insurance in place to support their ability to meet liabilities as they fall due and to protect their clients.

Subscriber Terms and Conditions

  1. APPLICATION OF TERMS
    • These terms and conditions (“Subscriber Terms”) apply to the subscription by any qualifying member of the South African Underwriting Managers Association NPC (“SAUMA”) to the services and benefits offered by FIA Services (Pty) Ltd (“FIA Services”) under the SAUMA affiliation arrangement (“Subscription”).

  2. NATURE OF SUBSCRIPTION
    • A Subscription under this arrangement:
      • does not constitute membership of FIA NPC;
      • does not confer any voting rights or governance participation in FIA NPC; and
      • is governed solely by the contractual relationship between the Subscriber and FIA Services.

  1. ELIGIBILITY
    • To qualify for the Subscription, the applicant must, at the time of application, be a current paid-up member of SAUMA.
    • FIA Services will verify the applicant’s SAUMA membership status with SAUMA prior to activation, and may re-verify such status periodically.
    • If a Subscriber ceases to be a paid-up member of SAUMA, the Subscription will correspondingly be terminated.
    • Applicants are required to authorise FIA Services to confirm their SAUMA membership status with SAUMA as part of the application process.

  1. SERVICES
    • The Subscription entitles the Subscriber to the following benefits:
      • Complimentary access to the FIA CPD Platform;
      • Complimentary access to the FIA Insight Magazine (digital edition);
      • Advertising opportunities on FIA platforms at a discounted rate of 15% (fifteen percent) off the prevailing published rates; and
      • Invitations to attend FIA Technical Webinars annually.
    • FIA Services reserves the right to update, vary or substitute the Services from time to time, provided that the overall value and nature of the benefits remain materially the same.

  1. FEES AND PAYMENT
    • The monthly subscription fee is R260.00 (two hundred and sixty rand) for up to seven registered individuals (Key Individuals and Representatives), and R36.00 (thirty-six rand) per additional registered individual thereafter, excluding VAT.
    • The Subscriber shall provide FIA Services with the required details of each individual to be registered under the Subscription for the purposes of activation and billing.
    • All fees are exclusive of VAT, which shall be charged at the prevailing statutory rate.
    • Subscription fees are reviewed annually in March and may be adjusted with effect from 1 April.
    • Any changes to the Subscription, including but not limited to the number of Representatives and Key Individuals registered under the Subscription, may only be effected once annually during the annual review period in March of each year, with such changes taking effect from 1 April.
    • Subscription fees shall be billed monthly in arrears, unless the Subscriber elects an annual billing cycle at the time of application.
    • The Subscriber shall ensure that all billing information (including contact details, authorised signatories and bank account details) is kept accurate and up to date.
    • Non-payment of subscription fees may result in suspension of access to the Services until such fees are brought up to date.
    • The Subscriber acknowledges and agrees that all subscription fees payable under these Subscriber Terms may be collected by way of debit order, which shall be processed by the holding company, FIA NPC (The Financial Intermediary Association of South Africa), on behalf of FIA Services. Payment to FIA NPC shall be deemed to constitute valid and sufficient discharge of the Subscriber’s payment obligations to FIA Services under these Subscriber Terms.

  1. ONBOARDING
    • Onboarding will be conducted as a Subscription with FIA Services under the SAUMA affiliation arrangement.
    • Onboarding will not confer FIA NPC membership status or any associated rights.
    • Onboarding is conditional on confirmation of the Subscriber’s current SAUMA membership at the time of application

  1. DATA PROTECTION
    • FIA Services will process all personal information in accordance with the Protection of Personal Information Act 4 of 2013 (POPIA) as set out in our POPIA policies.
    • By subscribing, the Subscriber authorises FIA Services to confirm their SAUMA membership status with SAUMA and to process personal information for the purposes of fulfilling the Subscription.

  1. TERMINATION
    • The Subscriber may terminate the Subscription by giving FIA Services one calendar month’s written notice.
    • FIA Services may terminate the Subscription on one calendar month’s written notice, or immediately if the Subscriber breaches these Subscriber Terms and fails to remedy such breach within 14 (fourteen) days of receiving written notice.
    • Termination of the SAUMA–FIA Services affiliation agreement shall not automatically terminate these Subscriber Terms.
    • Termination by the Subscriber shall not relieve the Subscriber of liability for any subscription fees accrued up to the effective date of termination.
    • FIA Services may suspend or terminate the Subscription with immediate effect in the event of non-payment of fees by the Subscriber.

  1. GENERAL
    • These Subscriber Terms are governed by the laws of the Republic of South Africa.
    • Any disputes arising under these Subscriber Terms shall be dealt with in accordance with the dispute resolution provisions contained in the FIA NPC membership terms and conditions, as modified to reflect that the contractual relationship is with FIA Services.
    • Any notices required under these Subscriber Terms may be validly delivered by email to the addresses provided in the Subscriber’s application form, and such notices shall be deemed received on the day of transmission if sent during business hours.
    • The Subscriber may not assign, cede or transfer any of its rights or obligations under these Subscriber Terms without the prior written consent of FIA Services.
    • No variation of these Subscriber Terms shall be of any force or effect unless reduced to writing and signed by both FIA Services and the Subscriber.