Frequently Asked Questions
- Who is protected by AHRI ProCover?
- What does the policy cover?
- What are some examples in which this policy could operate to benefit an AHRI member?
- What is the future likelihood of individual human resource practitioners being personally exposed to litigation, fines and penalties in the course of doing their job?
- What professional activities are covered by AHRI ProCover?
- If I am a member working in an overseas location am I protected by AHRI ProCover?
- What does AHRI ProCover exclude?
- I already have an indemnity policy through AHRI with Austbrokers Countrywide. Will AHRI ProCover replace this?
- How can I get proof that I am covered by the AHRI ProCover policy?
- Does this policy cover my Pty Ltd consultancy business as well as me personally?
- What does this insurance cover cost? Do I pay more via my membership fees?
- What happens if I do not renew my AHRI membership?
- Who are the insurer and the broker?
- Contact details
Who is protected by AHRI ProCover?
- All financial professional members of the Australian Human Resource Institute (AHRI) who are engaged in human resource activities
- Employee members in the event that they are exposed to litigation with no cover from their employer or are personally named in a legal action relating to their human resource activities
- All consultants (small business owners) who are financial members of AHRI and generate gross fees of up to $150,000 annually from human resource related consultancy advice services
For AHRI members who operate a consultancy business that generates more than $150,000 in gross consultancy fees per annum, contact Austbrokers Countrywide for a quotation under the AHRI professional indemnity facility where exclusive discounted rates are available to members who don't fall under the AHRI ProCover criteria.
Although members will continue to receive member benefits during the 30 day grace period following their renewal date, they are not considered financial members if payment has not been received by their due date. Therefore, they will not be covered under AHRI ProCover for current or past incidents after their due date if no payment has been received.
AHRI professional members are those registered as Graduate Member, MAHRI, CAHRI, CPHR, FCPHR, FAHRI or Life Fellow. Affiliate and student members are not covered by this policy and should seek to upgrade their member category if working in a HR function.
What does the policy cover?
AHRI ProCover offers protection to all AHRI financial professional members against claims from third parties alleging a breach of professional duty arising from the provision of human resource services advice where the third party alleges a financial loss.
AHRI ProCover includes:
- A professional indemnity limit
$5,000,000 with an aggregate limit (total claims payable in one policy period) of $10,000,000
- Compensatory penalties cove
For fines and penalties that result from a breach of legislation up to a limit of $250,000. A claim may arise from breaches, including breaches of workplace relations legislation, OHS legislation, environment laws, employment practices legislation and companies law (e.g. Corporations Act). The policy covers the penalty plus any legal costs incurred with the investigation, defence and settlement.
- Legal defence costs
Covers legal costs for alleged statutory breach or contractual breach of $1,000,000. This additional benefit may assist members caught up in such actions as a Fair Work Act breach.
AHRI ProCover provides cover to AHRI professional members in a range of industry situations:
- Employee risks
These are cases in which individual employees can be found liable for professional negligence losses and are not always indemnified against that liability by their employer
- One-off consultancy risks
We often see employees pick up single consultancy jobs to supplement their employment income. It can be prohibitively expensive to spend $1,000 on an insurance policy for a single contract which may generate less than $10,000 of fees
- Start-up consultancies
AHRI professional members who are just starting in their consultancy or transitioning from employment to consulting may not have the initial cash-flow resources available for expenses like insurance. AHRI ProCover allows for a buffer of "start-up" cover until the business is up and running and fee generation reaches a level that necessitates cover specific to that business. Once annual fee income exceeds $150,000 the AHRI member will need to purchase their own policy under the Austbrokers Countrywide Professional indemnity facility
- Individual consultancies and small part-time businesses
The policy covers active consultants who generate gross consultancy fees of up to $150,000 per annum in the provision of human resource advice services
AHRI ProCover should not be substituted for the following:
- Workers compensation insurance
- Directors and officers insurance
- Public liability insurance
What are some examples in which this policy could operate to benefit an AHRI member?
There are two recent cases where this insurance policy would have offered significant protection to an AHRI professional member:
- Centennial Financial Services case
An employee human resources manager was personally sued for sham contracting breaches of the Fair Work Act. Had the individual been protected by AHRI ProCover the member would have had access to expert legal advisers and up to $1,000,000 in legal defence costs as well as access to $250,000 fines and penalties cover
- Sika case
An employee human resources manager was personally sued as an individual for having breached the freedom of association provisions in the Act. Similarly, AHRI ProCover would have extended legal defence costs up to $1,000,000 and fines and penalties cover up to $250,000.
What is the future likelihood of individual human resource practitioners being personally exposed to litigation, fines and penalties in the course of doing their job?
Recent legislation in areas such as workplace relations and OHS expressly provides for the personal liability of individual HR employees found to have breached the law (e.g. section 550 of the Fair Work Act).
The Fair Work Ombudsman, Nicholas Wilson, recently stated: "My agency has the power to prosecute individuals who are involved in contraventions of workplace relations laws. This means executives and managers, and the organisations they work for, can be held accountable for failures to provide employees with their full lawful entitlements" (see HR Monthly, August 2011).
In addition, the courts have increasingly been putting individual HR managers on notice. When federal magistrate, Michael Lloyd-Jones, found against an HR manager in the Sika case, he said: "This court unfortunately sees too many instances similar to the matters in this case … inappropriately and incompetently approached by persons who parade under the banner of human resources specialists".
What professional activities are covered by AHRI ProCover?
The policy covers the liability of AHRI financial professional members arising from human resource activities undertaken in the course of their work when they are acting in a professional capacity as an employee or a consultant.
The policy does not cover activities undertaken outside the area of human resources practice, such as general management consulting, financial advice or marketing advice.
Enquiries about professional activities unrelated to human resources practice need to be referred to AHRI's insurance agent Austbrokers Countrywide for assessment of your broader professional insurance coverage.
If I am a member working in an overseas location am I protected by AHRI ProCover?
AHRI ProCover provides worldwide territorial cover, which means that HR activities that are the subject of a claim can be undertaken anywhere in the world. However, jurisdictional cover is limited to Australia and New Zealand, so to trigger a claim it must first be brought in an Australian or New Zealand court.
What does AHRI ProCover exclude?
The policy does not provide any cover where the actions of an AHRI professional member are proven to be intentional, deliberate, wilful or reckless, including but not limited to:
- Intentional defamation
- Intentional infringement of intellectual property
- Wilful breach of a statute or contract
- Criminal acts
Where an activity is found to fall into one of the excluded areas of cover, the AHRI member is not required to repay the costs of any legal advice provided under the cover up to that point.
Please note that for each and every claim made, an excess of $1,000 is payable by the AHRI member, exclusive of costs and expenses.
I already have an indemnity policy through AHRI with Austbrokers Countrywide. Will AHRI ProCover replace this?
If you have a professional indemnity policy via an existing AHRI facility this will not immediately be replace by AHRI ProCover. At renewal, you will be contacted by Austbrokers Countrywide and, if you agree, be transitioned into the AHRI ProCover policy at no cost where you fit under the $150,000 cap.
If you have professional indemnity insurance elsewhere, contact Austbrokers Countrywide to check that the AHRI ProCover policy offers all of the protection of your existing policy and, if so, arrange transition into the AHRI ProCover facility.
How can I get proof that I am covered by the AHRI ProCover policy?
Contact Austbrokers Countrywide, and by supplying your name and AHRI membership number, you will be provided with a certificate of insurance as proof of insurance cover.
Does this policy cover my Pty Ltd consultancy business as well as me personally?
Yes, as long as the annual gross fees generated by your business do not exceed $150,000. If the annual fees are less than $150,000 the individual and the company are covered by AHRI ProCover.
What does this insurance cover cost? Do I pay more via my membership fees?
AHRI ProCover is free and is an automatic benefit of your AHRI professional membership, which means you do not have to pay additional membership fees for the benefit of insurance coverage. AHRI's size and scale enables it to use buying power to secure a favourable deal for its members. This service is an example of AHRI continually seeking ways to offer additional products and services that are exclusively beneficial to its members.
What happens if I do not renew my AHRI membership?
You will no longer have cover under the policy if you let your AHRI membership lapse. AHRI ProCover only provides protection to financial professional members of AHRI. If you fail to renew your membership on time the cover ceases. You need to keep in mind that if you require a professional indemnity policy to continue to cover past human resources activities, you need to keep renewing your membership to ensure the cover remains in place.
AHRI professional membership is a cost effective way of keeping you covered compared with the cost of a standard professional indemnity insurance policy.
Who are the insurer and the broker?
CGU Insurance Limited is the insurer, one of Australia's largest insurance companies. Austbrokers Countrywide administers this policy on AHRI's behalf and will be providing advice. Austbrokers Countrywide holds Australian Financial Services Licence No. 244436 under the Corporations Act 2001 to provide general insurance broking services.
For policy information contact Austbrokers Countrywide.
The AHRI Professional Indemnity Master Policy (AHRI ProCover) is exclusively available to current financial AHRI professional members: registered Graduate Member, MAHRI, CAHRI, CPHR, FCPHR, FAHRI or Life Fellow. Affiliate and Student Members are not covered by this policy and should seek to upgrade if working in an HR function. AHRI ProCover is underwritten by Pacific Indemnity Underwriting Solutions Pty Ltd ACN 606 511 639 - on behalf of CGU Insurance Limited ABN 27 004 478 371 via Austbrokers Countrywide. Austbrokers Countrywide holds Australian Financial Services Licence No. 244436 under the Corporations Act 2001 to provide General Insurance Broking Services.
Professional members receive free professional indemnity insurance as part of their membership.
Did you know...
That AHRI represents around 20,000 HR professionals from Australia and around the globe?