Provides cover for defence costs and compensation to third parties for losses caused by a breach of professional duty or negligence in the performance of your professional services.
Claim example
A property management company in the lower end of the residential market and managed hundreds of properties. One of its property managers had been appointed to collecting rents in cash from around 110 tenants. Receipts for the money collected was entered into the tenants rent book, the money was then recorded by the property manager directly into the companies computerised banking system and she the produced a bulk itemised receipt for the funds from the computer system. In the course of normal business there were always tenants who failed to pay for one or two weeks rents without getting serious arrears. The property manager committed theft by pocketing one or two weekly rentals and recording “no pay” against various tenants. She maintained a rolling system where the shortfall in money never appeared conspicuously against the same tenant and the level of no pay was always within acceptable levels.
The scam was uncovered when the employee had to take leave for a family bereavement. A very particular tenant, missing her collection called into the office to pay her rent where a discrepancy between office records and her tenant rent book was discovered.
When an audit was conducted it was found the property manager had stolen $37,000 over an 11 month period.