Defence, Settlement and Investigation of Claims

With respect to the Insuring Agreements marked as "included" in the Schedule, Underwriters shall have the right but not the obligation, to take control of and conduct in the Insured's name the investigation, defence, or settlement of any Claim or circumstances as Underwriters in their absolute discretion see fit. When the Claim is being defended by the Insured, Underwriters shall have the right to effectively associate with the insured in respect of the conduct and management of the Claim to which this policy may apply.

The limit of liability available to pay damages and as stated within the Schedule shall be reduced by the payment of defence costs or any other amounts covered under this policy. Damages, defence costs, and any other amounts covered under this policy are all subject to the excess, as stated within the Schedule.

Underwriters shall have the right to make any investigation they deem necessary with respect to coverage under this policy.

If the Insured refuses to consent to any settlement or compromise recommended by Underwriters that is acceptable to any claimant and the Insured elects to contest the Claim, then Underwriters' total liability for any damages, defence costs and other amounts covered under this policy, shall not exceed the amount for which the Claim could have been settled, less the remaining excess, plus the defence costs incurred up to the time of such election.

Allocation

If the Insured incurs damages and defence costs in respect of a Claim that includes both covered and uncovered matters, or which is made against both covered and non-covered parties then Underwriters and the Insured will use best efforts to agree upon a fair and proper allocation of the damages and defence costs covered hereunder, based on the relative legal and financial exposures of the Insured as to covered and non-covered matters. Underwriters shall not be liable under this policy for the portion of such amount allocated to non-covered loss.

If Underwriters and the Insured are not able to agree on a fair and equitable allocation, then the determination shall be referred to a Senior Counsel (to be mutually agreed upon by the parties, or in the absence of agreement to be appointed by the President of the Law Society, or equivalent organisation in the jurisdiction that this policy is issued), as an expert to decide. That decision shall be binding upon Underwriters and the Insured. Underwriters shall pay the Senior Counsel’s costs of providing the determination and such payments shall not erode the limit of liability.

Innocent Insured Provision

Whenever coverage under this Policy would be avoidable or otherwise prejudiced because of breach of Policy Section 6.1, any insurance as would otherwise be afforded under this Policy shall not be avoidable or otherwise prejudiced by reason of such breach with respect to those Insured’s who did not personally commit, or personally connive or acquiesce in committing, such breach, provided that

(a) the Insured entitled to the benefit of this provision shall comply with Policy Section 6.1 promptly after obtaining knowledge of the breach,

(b) the relevant circumstances or Claim is notified to Underwriters during the Policy Period or Extended Reporting Period, if applicable and

Whenever coverage under this policy would be excluded because of Exclusion 4.2 Conduct, such insurance as would otherwise be afforded under this policy shall not be excluded in respect of those Insured’s who did not personally commit, or personally connive or acquiesce in committing, or have knowledge of, the relevant act, error or omission.

Underwriters irrevocably waive any right they may have to rescind or avoid this policy, or any severable part of it, on the grounds of innocent or negligent non-disclosure or innocent or negligent misrepresentation.

Assistance and Cooperation

The Insured shall cooperate with Underwriters in all investigations. The Insured shall execute or cause to be executed all papers and render all assistance as requested by Underwriters. Part of this assistance may require the Insured to provide copies of a third party’s system security and event logs.

Upon Underwriters' request, the Insured shall assist in making settlements in the conduct of suits and in enforcing any right of contribution or indemnity against any person or organisation who may be liable to the Insured with respect to which insurance is provided by this policy.

The Insured shall not admit liability, make any payment, assume any obligations, incur any expense, enter into any settlement, stipulate to any judgment or award, or dispose of any Claim without Underwriters' prior written consent. However, the prompt public admission of a security breach of personal information of employees or third parties as required by governmental privacy legislation or credit card association operating requirements will not be considered as an admission of liability requiring Underwriters' prior consent. Notwithstanding the aforementioned Underwriters are to be informed as soon as practicable of such public admission if such public admission is a circumstance that could lead to a Claim.

Subrogation

If any payment is made under this Policy and there is available to Underwriters any Insured's right of recovery against third parties, then Underwriters shall maintain all rights of such recovery. The Insured shall execute and deliver instruments and papers and do whatever else is necessary to secure such rights.

The Insured shall do nothing to prejudice such rights. Any recoveries shall be applied first to subrogation expenses, second to damages, defence costs, or any other amounts paid by Underwriters, and lastly to the excess. Any additional amounts recovered shall be paid to the Insured.

Governing Law and Service of Suit

Underwriters hereon agree that:

In the event of a dispute arising under this Policy, Underwriters at the request of the Insured will submit to the jurisdiction of any competent Court in the Commonwealth of Australia. Such dispute shall be determined in accordance with the law and practice applicable in such Court;

Any summons, notice or process to be served upon the Underwriters may be served upon the Lloyd’s General Representative in Australia, Level 9, 1 O’Connell Street, Sydney, NSW 2000, who has authority to accept service and to enter an appearance on the Underwriters' behalf, and who is directed at the request of the Insured to give a written undertaking to the Insured that the Lloyd's General Representative will enter an appearance on the Underwriters' behalf; and

If a suit is instituted against any one of the Underwriters, all Underwriters hereon will abide by the final decision of any such Court or any competent Appeal Court.

Articles in this section

General Claims Conditions