- What is the difference in cover between the AFF and the AIIF?
The AFF provides protection to the public and not to practitioners, for losses arising out of the theft/misappropriation of trust money by an attorney or his staff– but only once the attorney and/or the practice have been fully excused.
On the other hand, the AIIF provides professional indemnity cover to the practitioner for breach of mandate or negligence by the attorney or his staff/employees, which results in losses to third parties. By providing this cover to attorneys, the AIIF also protects the interests of the public who may suffer damages as a result of the attorney’s negligence.
- Am I covered?
In this regard, please refer to the AIIF PI Policy. All practitioners obliged to apply for a Fidelity Fund Certificate and who practise in the Republic of South Africa are covered. This cover extends to the employees of the practice acting in the course and scope of their employment.
- What is my excess/deductible?
Please refer to the AIIF PI Policy schedules. Your excess/deductible depends on the number of principals in your practice at the time that the cause of action/circumstance arose.
- Can I insure my excess/deductible?
No, the deductible cannot be insured.
- Do I pay my excess/deductible to the insurer upfront, regardless of what amount is finally paid to the claimant, if any, and does my excess/deductible change depending on the size of the claim?
You only pay your deductible directly to the claimant or his legal representative, once the matter has been settled or a judgment has been obtained against you. If the matter is settled for less than your deductible, then you only pay the settlement amount (and party and party costs to the extent that they fall within your deductible). Your deductible remains the same regardless of the size of the claim.
- I have allowed a client’s claim to prescribe. What do I do?
Firstly you should explain the client’s rights to him/her and then refer him/her to other attorneys in order that his/her rights may be protected. Please note that you should not admit or deny liability, negotiate or settle a claim or incur any costs or expenses in connection with a claim without the prior written consent/approval of the AIIF, as by doing so you would be in breach of the policy. Notify the insurers as soon as you are aware of a claim or potential claim (see Claims Procedure).
- I have received a summons from my client. What do I do?
You may need to enter an appearance to defend initially, to protect your interests, but ensure that you notify the insurers immediately on receipt of a summons or letter of demand (see Claims Procedure)
- Does the policy cover all loss/potential loss?
No. Please see the specific exclusions of the AIIF PI policy. Practitioners should therefore ensure that they are adequately covered for all areas of work which they undertake
- I am a retired practitioner. Do I have to buy run-off cover?
All retired practitioners are covered by the AIIF, for work done whilst they were still practising, regardless of when the claim is made. However, you should check with your Broker whether or not you need to purchase run-off cover for your top-up insurance. Please also note that the cover can obviously only be provided as long as the current insurance is in place. Retired practitioners will need to satisfy themselves from time to time that the insurance is indeed still in place, in the same form as it is at present.
- How much cover do I have? What is my limit of indemnity?
The limit of indemnity/cover is dependent on the number of principals in your practice at the time that the cause of action/circumstance arose. Please see the schedules to the AIIF PI policy. The cover is provide on a yearly aggregate basis and not per claim. Practitioners are advised to take out “top-up” cover to ensure that they are adequately covered should they face a claim in excess of their AIIF limit of indemnity. Please consult your Broker to advise you on the amount of cover your practice requires.
- Can I lodge a claim on behalf of my client?
No. Due to a possible conflict of interest, your client must be referred to an independent attorney in order that his/her interest may be protected. Your client can also not directly approach the AIIF with a claim. Third parties do not have any rights in terms of the policy vis-à-vis the insurers. Your client will have to demand compensation from you and, in turn, it is your responsibility to notify the AIIF and apply for indemnity. The AIIF policy will not respond to the claim if no notification is received from the practitioner. Late notification may lead to a repudiation of the claim.
- Can I settle with my client if I know that the claim is payable?
No. You may not admit liability or in any way compromise the claim. It must be reported to the AIIF for investigation.
- Am I covered for theft of trust money?
No. Attorneys may be under the misapprehension that the Attorneys Fidelity Fund provides fidelity cover to practitioners against theft of trust funds. This is not the case. The intention of the Fund is to serve as a fund of last resort, to protect the public against theft of trust monies by attorneys. In the event of misappropriation by one of your partners or members of staff, you may well find yourself having to make good the loss. Practitioners are advised to consider seeking cover in the market to protect themselves against such an occurrence. In addition it must be noted that this cover is different to Fidelity Guarantee cover, which usually forms part of your general short- term insurance cover for your firm. The AIIF policy specifically exclude claims arising from or in connection with misappropriation.