The scheme is governed by a renewable policy. Each successive policy incepts on 1st July of each year and the cover provided lasts until the end of June of the following year.

Download or View Online: 2011/2012 Scheme Policy - PDF

Indemnity provided

The indemnity granted is in terms of the Insured's legal liability to any third party arising out of the conduct of the profession. (Clause 1.1).

Every individual practitioner can therefore invoke the indemnity and so can every firm, partnership or incorporated practice consisting of practitioners who practice in the Republic of South Africa and are in possession of or would have been obliged to apply for a Fidelity Fund certificate (clauses 2.5.1- 2.5.3)

However, third parties do not have any rights in terms of the policy and cannot claim in terms thereof (Clause 6.8)

Limits of indemnity

This is determined by the number of partners/directors which constituted the insured's practice at the time the alleged cause of action arose. (Clause 8.4.1 of Schedule A).

The limit of indemnity applies to the aggregate of claims you may be faced with in any year of insurance. Practitioners are therefore advised to take "top- up " cover in order to protect themselves in the event that they face claims which would exhaust this limit. This cover would have to be purchased at the practitioner's own cost.

The deductible

The insured is responsible for the first amount of any claim and claimant's costs arising out of one event or occurrence.

The deductible is also calculated in accordance with the number of partners/directors which constituted the insured's practice at the time the alleged cause of action arose (Clause 8.5.1 of Schedule A).

Deductibles with regard to prescribed MVA's are higher than those for other matters due to the unacceptably high number of these claims which prescribe in practitioner's hands. In addition, if Prescription Alert has not been adhered to, then the higher MVA deductible will be increased by 15%.

The deductible is not covered in terms of the policy and it is the practitioner/s' sole responsibility. The insurers are only liable to settle the remaining liability to a third party after the deductible has been fully expunged.

Specific Exceptions (Clause 5)

The policy does not cover every conceivable claim which may be made against practitioners and which arises out of conduct of the profession.

Liability has been excluded in respect of certain types of claims and practitioners are therefore warned to adequately cover themselves for all areas of work they may undertake on behalf of clients. This cover would also have to be purchased at the practitioner's own cost.

“Your attention is specifically drawn to clause 5.1. read with clause 5.1.5. All claims arising out of the theft of trust money are excluded from cover.

One of the most common misconceptions held by practitioners, is that they themselves enjoy indemnity through the AFF for their/their staff’s misappropriation of trust money. The Fidelity Fund is a fund of last resort, which means that a claimant first needs to exhaust all remedies against the partners/directors of the practice before the Fund comes to its assistance.

It is therefore essential that all practitioners with trust accounts carefully consider the risks of failing to buy cover for misappropriation of trust money through a broker on the open market.”