Environmental Planning and Assessment Regulation 2000
Historical version for 26 April 2002 to 1 July 2002 (accessed 6 August 2020 at 06:30) Current version
Part 11 Division 2
Division 2 Automatic run-off contracts
207   Required insurance: section 109ZN
(cf clause 81O of EP&A Regulation 1994)
For the purposes of section 109ZN (2) of the Act:
(a)  an insurance contract that an accredited certifier is required to be indemnified by is an automatic run-off contract, and
(b)  the liability against which an accredited certifier is required to be indemnified by such a contract (or by a number of such contracts) is the accredited certifier’s statutory liability for the whole of the period during which he or she has been an accredited certifier.
208   Individual contracts
(cf clause 81P of EP&A Regulation 1994)
(1)  An automatic run-off contract may provide indemnity to an individual accredited certifier.
(2)  The indemnity provided by an individual contract must extend to all acts and omissions of the person covered by the contract that have occurred at any time since the insured first became an accredited certifier.
(3)  Except as provided by clause 211, the indemnity provided by an individual contract may be limited to those acts and omissions in respect of which a claim is made against the insured, and notified to the insurer, before the contract’s expiry date.
(4)  Nothing in this clause requires an individual contract to provide indemnity for acts or omissions that occur after the contract’s expiry date.
(5)  An individual contract may require the insured to notify the insurer in the event that the insured ceases to be an accredited certifier.
(6)  The requirements of this clause are subject to the exceptions and exclusions allowed by the other provisions of this Part.
209   Company contracts
(cf clause 81Q of EP&A Regulation 1994)
(1)  An automatic run-off contract may provide indemnity to a company, including such of the directors or employees of the company as are accredited certifiers.
(2)  The indemnity provided by a company contract must extend to:
(a)  all persons who, at any time during the term of the contract, are or become:
(i)  accredited certifiers, and
(ii)  directors or employees of the company,
whether or not they cease to be accredited certifiers, or cease to be directors or employees of the company, during the term of the contract, and
(b)  all persons who, at any time before the beginning of the term of the contract, had been:
(i)  accredited certifiers, and
(ii)  directors or employees of the company,
but who had ceased to be accredited certifiers, or had ceased to be directors or employees of the company, before the beginning of that term.
(3)  Each person covered by a company contract must be named in the contract.
(4)  The indemnity provided by a company contract must extend to all acts and omissions of the persons covered by the contract that have occurred, while those persons were directors or employees of the company, in the course of work carried out on behalf of the company.
Note.
 A company contract does not cover an accredited certifier for any period before he or she became a director or employee of the company. Consequently the person will need to obtain separate indemnity for that period in order to comply with the requirements of section 109ZN of the Act.
(5)  Except as provided by clause 211, the indemnity provided by a company contract may be limited to those acts and omissions in respect of which a claim is made against the insured, and notified to the insurer, before the contract’s expiry date.
(6)  Nothing in this clause requires a company contract to provide indemnity for acts or omissions that occur after the contract’s expiry date.
(7)  A company contract may require the insured company to notify the insurer in the event that any of the insured accredited certifiers cease to be accredited certifiers or cease to be directors or employees of the company.
(8)  The requirements of this clause are subject to the exceptions and exclusions allowed by the other provisions of this Part.
210   Partnership contracts
(cf clause 81R of EP&A Regulation 1994)
(1)  An automatic run-off contract may provide indemnity to a partnership, including such of the partners or employees of the partnership as are accredited certifiers.
(2)  The indemnity provided by a partnership contract must extend to:
(a)  all persons who, at any time during the term of the contract, are or become:
(i)  accredited certifiers, and
(ii)  partners or employees of the partnership,
whether or not they cease to be accredited certifiers, or cease to be partners or employees of the partnership, during the term of the contract, and
(b)  all persons who, at any time before the beginning of the term of the contract, had been:
(i)  accredited certifiers, and
(ii)  partners or employees of the partnership,
but who had ceased to be accredited certifiers, or had ceased to be partners or employees of the partnership, before the beginning of that term.
(3)  Each person covered by a partnership contract must be named in the contract.
(4)  The indemnity provided by a partnership contract must extend to all acts and omissions of the persons covered by the contract that have occurred, since those persons first became partners or employees of the partnership, in the course of work carried out on behalf of the partnership.
Note.
 A company contract does not cover an accredited certifier for any period before he or she became a director or employee of the company. Consequently the person will need to obtain separate indemnity for that period in order to comply with the requirements of section 109ZN of the Act.
(5)  Except as provided by clause 211, the indemnity provided by a partnership contract may be limited to those acts and omissions in respect of which a claim is made against the insured, and notified to the insurer, before the contract’s expiry date.
(6)  Nothing in this clause requires a partnership contract to provide indemnity for acts or omissions that occur after the contract’s expiry date.
(7)  A partnership contract may require the insured partnership to notify the insurer in the event that any of the insured accredited certifiers cease to be accredited certifiers or cease to be partners or employees of the partnership.
(8)  The requirements of this clause are subject to the exceptions and exclusions allowed by the other provisions of this Part.
211   Run-off cover
(cf clause 81S of EP&A Regulation 1994)
(1)  If, by the expiry date of an automatic run-off contract:
(a)  in the case of an individual contract, the person covered by the contract is or has become a non-practising insured, or
(b)  in the case of a company contract, any of the persons covered by the contract is or has become a non-practising insured, or
(c)  in the case of a partnership contract, any of the persons covered by the contract is or has become a non-practising insured,
the indemnity provided by the contract must extend to all of the person’s acts or omissions in respect of which a claim is made against the insured, and notified to the insurer, after the contract’s expiry date but before the end of the period for which run-off cover is provided.
Note.
 Because of the operation of subclause (2) (a), subclause (1) operates, in relation to company contracts and partnership contracts, only with respect to the last of a series of such contracts, for the indemnity provided to a non-practising insured under an earlier contract is preserved by any replacement contract, unlike the case of an individual contract in respect of which the indemnity provided to a non-practising insured remains with the contract in force at the time the person concerned became a non-practising insured.
(2)  Subclause (1) does not require the indemnity provided by an automatic run-off contract to extend to any of a person’s acts or omissions:
(a)  in respect of which a claim is made against the insured, and notified to the insurer, while some other automatic run-off contract (whether or not a replacement contract) is in force with respect to that person’s statutory liability for that act or omission, or
(b)  in the case of a company contract or partnership contract, that have occurred otherwise than in the course of work carried out by the person on behalf of the company or partnership.
(3)  An automatic run-off contract must provide the indemnity referred to in subclause (1) free of charge and without the need for any request.
212   Extent of indemnity for costs and expenses
(cf clause 81T of EP&A Regulation 1994)
(1)  An automatic run-off contract must indemnify the insured for costs and expenses incurred by the insured, with the consent of the insurer, in defending or settling any such claim.
(2)  The requirements of this clause are subject to the exceptions and exclusions allowed by the other provisions of this Part.
213   Excess
(cf clause 81U of EP&A Regulation 1994)
(1)  An automatic run-off contract must not require the insured to bear a greater proportion of the liability under any single claim than the prescribed excess.
(2)  Nothing in this clause prevents an automatic run-off contract from providing for a counter-indemnity from the insured to the insurer.
(3)  In this clause:
prescribed excess, in relation to a claim paid by an insurer under an automatic run-off contract, means:
(a)  $5,000, or
(b)  5 per cent of the insured’s gross income during the financial year preceding the beginning of the term of the contract,
whichever is the greater.
financial year means the period of 12 months ending 30 June.
214   Limit of indemnity as to compensation
(cf clause 81V of EP&A Regulation 1994)
(1)  An automatic run-off contract may limit the indemnity provided to an insured (being an individual), with respect to all claims made by the insured under the contract in any one year, to an amount of at least $1,000,000.
(2)  For an insured that is a company, an automatic run-off contract must indemnify the company, with respect to all claims made by the company under the contract in any one year, for not less than the amount calculated by multiplying $1,000,000 by:
(a)  the number of accredited certifiers who are directors or employees of the company as at the date on which the contract is issued, or
(b)  if the contract is the fourth or subsequent contract issued to the company, whether by the same or by another insurer, the average number of accredited certifiers who have been directors or employees of the company at any one time during the previous 3 years.
(3)  For an insured that is a partnership, an automatic run-off contract must indemnify the partnership, with respect to all claims made by the partnership in any one year under the contract, for not less than the amount calculated by multiplying $1,000,000 by:
(a)  the number or accredited certifiers who are partners or employees of the partnership as at the date on which the contract is issued, or
(b)  if the contract is the fourth or subsequent contract issued to the partnership, whether by the same or by another insurer, the average number of accredited certifiers who have been partners or employees of the partnership at any one time during the previous 3 years.
(4)  Nothing in subclause (2) or (3) requires the indemnity provided by an automatic run-off contract, with respect to all claims made by a company or partnership in any one year under the contract, to be for an amount greater than $10,000,000.
(5)  An automatic run-off contract must contain at least one automatic reinstatement of the indemnity provided by it.
215   Limitation of indemnity as to costs and expenses
(cf clause 81W of EP&A Regulation 1994)
(1)  The indemnity provided to an insured by an automatic run-off contract in relation to the insured’s costs may be limited in respect of any one claim to such amount as does not exceed:
(a)  20 per cent of the insurer’s maximum liability, or
(b)  an amount calculated by dividing the product of the insured’s costs and the insurer’s maximum liability by the settlement amount,
whichever is the lesser.
(2)  In this clause:
insured’s costs, in relation to a claim, means the costs and expenses incurred by the insured, with the consent of the insurer, in defending or settling the claim.
insurer’s maximum liability, in relation to an automatic run-off contract, means the limit of the insurer’s indemnity under the contract in respect of any single claim.
settlement amount, in relation to a claim, means the amount required to settle the claim (disregarding the insured’s costs).