Farm Insurance :: News
SHARE

Share this news item!

Call for Greater Transparency in Professional Indemnity Insurance

Call for Greater Transparency in Professional Indemnity Insurance

Call for Greater Transparency in Professional Indemnity Insurance?w=400

The information on this website is general in nature and does not take into account your objectives, financial situation, or needs. Consider seeking personal advice from a licensed adviser before acting on any information.

The Australian Financial Complaints Authority (AFCA) is advocating for enhanced transparency concerning the Professional Indemnity (PI) insurance maintained by member companies, highlighting its current lack of oversight regarding PI insurers.

AFCA has expressed the need to access information that extends beyond the "corporate veil" involved in scenarios of administration or liquidation. The appeal comes amid background discussions with the Senate Economics References Committee, focusing on the surge in complaints it faced following the downfall of Dixon Advisory.

AFCA emphasized that even though financial services licensees are legally obligated to carry PI insurance, this insurance is not structured to function as a consumer compensation tool. AFCA outlined several limitations of current PI insurance, illustrating why it might not fully serve consumers seeking redress:

  • Available funds under the PI insurance might be insufficient to cover awarded compensation.
  • Insurance contracts may exclude coverage for specific actions that led to the compensation award.
  • The compensation amount might fall below the policy excess, leaving consumers uncompensated.
  • Complainants cannot directly file a claim on a firm's PI policy, lacking transparency over claim denials and unable to contest them.
  • Services may be claimed on years later, at which point the firm's insurance could have expired, especially when 'run-off' cover is inaccessible or costly.

The authority stated, "AFCA does not have jurisdiction concerning professional indemnity insurers," adding that once it makes a decision, the implicated financial firm has 30 days to comply with the determination, after which AFCA has limited oversight regarding the firm's actions.

"In general, it is assumed compensation payments come directly from firms' operational accounts, unless a firm manages to hedge against the risk through their insurance which varies widely," AFCA observed.

Furthermore, if a firm fails to heed an AFCA determination, consumers are advised to report this to the Australian Securities and Investments Commission (ASIC), as noted by AFCA.

Notably, AFCA considers that "PII is crucial for ensuring compensation against misconduct is served" and stresses that a solid Professional Indemnity Insurance framework is vital for upholding the Compensation Scheme of Last Resort (CSLR).

In the current regulatory landscape, AFCA is frequently uninformed about whether an advice licensee maintains a relevant PII policy with applicable clauses that would affect AFCA's evaluation of complaints, such as exclusions for certain advice forms or whether the coverage limit has already been reached.

The original insights were facilitated by article discussions from the Senate Economics References Committee and sourced from an industry report featured on Financial Planning's AFCA section.

Published:Monday, 2nd Dec 2024
Author: Paige Estritori

Please Note: We do not endorse any specific products or companies. Some content is sourced from third parties, including press releases, and may not be independently verified for accuracy or completeness.

Share this news item:

Insurance News

WFI Insurance Highlights Significant Drop in Farm Liability Claims
WFI Insurance Highlights Significant Drop in Farm Liability Claims
30 Mar 2026: Paige Estritori
WFI Insurance has reported a notable decrease in farm liability claims across most categories, signaling a positive trend in safety practices within the Australian agricultural sector. - read more
Australian Farmers Confront Rising Insurance Premiums Amid Climate Challenges
Australian Farmers Confront Rising Insurance Premiums Amid Climate Challenges
22 Mar 2026: Paige Estritori
Australian farmers are currently grappling with a significant surge in insurance premiums, with increases ranging from 20% to 40%, depending on the insurer. This escalation is primarily driven by the rising frequency and severity of natural disasters, coupled with a contracting underwriter market and escalating costs of goods and services. - read more
Widespread Rural Crime Exposes NSW Farmers to Repeated Victimisation
Widespread Rural Crime Exposes NSW Farmers to Repeated Victimisation
22 Mar 2026: Paige Estritori
A recent survey conducted by WFI Insurance in collaboration with the University of New England (UNE) Centre for Rural Criminology has unveiled alarming statistics regarding rural crime in New South Wales. The findings indicate that over 90% of NSW farmers have encountered criminal activities on their properties, with approximately 30% reporting being targeted seven or more times. - read more
Elders Insurance Highlights Increased Summer Storm Risks for Farmers
Elders Insurance Highlights Increased Summer Storm Risks for Farmers
22 Mar 2026: Paige Estritori
As the Australian summer approaches, Elders Insurance has issued a cautionary advisory to farmers, emphasising the heightened risk of storm-related damages during this season. Recent data indicates a significant increase in insurance claims due to summer storms, underscoring the need for proactive measures to safeguard agricultural assets. - read more
CGU and WFI Collaborate with Ag Guard to Boost Farm Insurance Services
CGU and WFI Collaborate with Ag Guard to Boost Farm Insurance Services
14 Mar 2026: Paige Estritori
In a significant development for Australia's agricultural sector, CGU and WFI Insurance have announced an exclusive partnership with Ag Guard, a technology-driven agricultural insurance agency. This collaboration, set to commence in June 2026, aims to bolster the agricultural insurance capabilities of both insurers and enhance digital services for brokers, partners, and customers. - read more
Insurance Council Declares Significant Events for Northern Territory and Queensland Floods
Insurance Council Declares Significant Events for Northern Territory and Queensland Floods
14 Mar 2026: Paige Estritori
The Insurance Council of Australia (ICA) has declared two Significant Events in response to the severe rainfall and flooding that have recently impacted the Northern Territory and Queensland. This declaration pertains to the flooding in Katherine and surrounding regions in the Northern Territory, as well as the Bundaberg region and Burnett River catchment in Queensland. - read more



Farm Insurance Articles

How to Choose the Right Farm Insurance Policy for Your Needs
How to Choose the Right Farm Insurance Policy for Your Needs
Farm insurance is a type of coverage designed specifically for the unique risks and operations involved in farming. It encompasses protection for farm dwellings, equipment, livestock, and crops, offering a tailored approach that reflects the diverse needs of farm owners. This coverage can help safeguard your livelihood against unforeseen events that could disrupt farm operations or result in significant financial losses. - read more
Navigating Farm Succession: A Step-by-Step Guide for Rural Australian Families
Navigating Farm Succession: A Step-by-Step Guide for Rural Australian Families
Welcome to our comprehensive guide on navigating farm succession for rural Australian families. The journey of passing on a family farm from one generation to the next is both a critical and challenging milestone. Recognizing that every farm has its unique story and set of circumstances is fundamental to the process. - read more
Income Protection for Farmers: Ensuring Stability Through Tough Times
Income Protection for Farmers: Ensuring Stability Through Tough Times
The world of farming is one filled with uncertainties. Weather conditions, market prices, and various other factors can create a highly volatile income stream for those within the agricultural sector. This unpredictability can lead to financial instability that impacts not only the farmers themselves but also their families and the larger rural community. - read more
The Impact of Weather on Farm Insurance Rates: What You Should Know
The Impact of Weather on Farm Insurance Rates: What You Should Know
Farming in Australia is a dynamic venture that requires careful planning and management. One of the crucial aspects every Australian farmer should consider is farm insurance. It provides a safety net against potential financial losses arising from various risks. These include natural disasters, damage to crops, livestock issues, and accidents on the farm property. - read more
Livestock Insurance for Aussie Farmers: What You Need to Know
Livestock Insurance for Aussie Farmers: What You Need to Know
Livestock farming is a significant part of the Australian agriculture industry. As with any business, farmers face numerous risks such as disease, death, theft or extreme weather events, which could cause damage or loss to their livestock assets. Livestock insurance provides cover against these risks, ensuring that farmers are financially protected from any potential financial losses, which could devastate their livelihoods. - read more
The importance of income protection insurance for hobby farmers
The importance of income protection insurance for hobby farmers
As a hobby farmer, you may not rely on your farm for your main source of income. Perhaps you have a full-time job but enjoy farming as a way to supplement your income and pursue a passion. However, just because farming is a hobby does not mean there aren't risks involved. In fact, hobby farmers face many of the same risks as commercial farmers, such as injury, illness, loss of crops or livestock, and damage to property. - read more

Need a Quote?
Start your free farm insurance quote comparison here.
Farm Type:
Postcode:

All quotes are provided obligation-free by a participating broker from our national referral partner network. We respect your Privacy.


Knowledgebase
Term Life Insurance:
A form of life insurance that is a pure protection policy with no cash or maturity value which lasts for a specific length of time, called a term.