Regulatory engagement, investigations and insurance coverage for professionals

In Australia and Victoria, regulatory investigations across sectors like building and construction and financial services are increasingly common. Building surveyors, architects, engineers, and other building practitioners are no strangers to scrutiny, especially as public interest in compliance and accountability grows. Financial services is not that dissimilar.

Here’s a tip for professionals whether business owners or employees:

Check your Professional indemnity insurance policy for

1. Investigation costs cover

Sometimes called ‘inquiries’ cover. It may be a separate insuring clause to a civil liability clause or an extension. The key is to check what cover you have. Follow through the definitions to understand the scope and triggers to claim.

Note: Some policies have no cover at all, others cover ‘formal’ investigations, there are various levels of cover that come down to the specific policy language and there is no standard.

Owners and employees should get familiar to both know what you are covered for and what to do if an investigation arises. In-house counsel should have a policy on how staff are to deal with enquiries and notice to ensure matters are not overlooked for consideration and disclosure.

2. Employee coverage under PI policies

If you are an employee of a larger practice ask compliance or inhouse legal as to whether you are covered and a copy of the professional indemnity policy - you likely should be covered as an Employee under the definition of Insured. If you need help reading the policy reach out.

Early legal advice is essential

Whether it’s the VBA, ASIC, or another authority, early legal advice is essential. A regulatory notice is not just a formality, it’s a legal step that can have serious consequences if handled poorly.

Getting the right advice early can help you:

• Understand the scope of the investigation - what is in and out; and
• Respond efficiently and appropriately; and
• Minimise reputational and financial risk.

Don’t put your head in the sand or wait until things escalate.

If you receive a notice, treat it seriously. Your insurance may protect you now or even later but it may require notification to insurers, so get informed early.

This article is a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

Tagged as:

• regulatory compliance