Professional Standards Scheme
The IPA is pleased to announce that all Australian States and Territories have a Professional Standards Scheme in place.
A Professional Standards Scheme is a legal instrument that limits the civil liability of IPA PPC holders who participate in the Scheme. The Scheme caps the amount of damages a court can award to a client if they succeed in certain claims against an IPA PPC holder. The IPA Scheme cap is $2 million effective from 1 January 2019.
To be permitted to operate under a Professional Standards Scheme is a privilege as it identifies the IPA and IPA PPC holders as recognised professionals. To remain in the Scheme, the IPA must demonstrate to the Professional Standards Councils that the IPA adequately monitors, enforces, regulates and improves the professional standards of IPA PPC holders.
This also places compliance obligations on IPA PPC holders which are as follows:
- Ensure your Professional Indemnity (PI) cover meets the requirements below:
- The insured amount must not be less than $2 million any one claim, being the cap of the current IPA Professional Standards Scheme;
- The policy must be obtained from an Australian Prudential Regulation Authority (APRA) regulated insurer;
- The policy is to insure all services you advertise and provide/invoice to the public;
- The policy is to include a minimum of one reinstatement, preferably unlimited reinstatements;
- The policy excess (deductable) is no more than 2% of the policy limit of indemnity or $200,000, whichever is the lower amount; AND
- The policy should be defence cost exclusive. If not and the policy is defence cost inclusive, the policy sets an additional 25% above the policy limit of indemnity amount to fund defence costs.
- Complete the annual declaration as part of statutory obligations, as a Professional Standards Scheme participant. You will need to declare of compliance and any PI insurance data such as notifications, claims and/or settlements. The IPA will e-mail this to you in February each year;
- Comply with your obligations as an IPA member such as the Continuing Professional Development requirements; AND
- Add the following disclosure statement in a minimum of Times New Roman 8 point font to communication materials such as (but not limited to) letterhead, facsimile transmission covers, newsletters, website and email footers:
Liability limited by a scheme approved under Professional Standards Legislation.
Note: You do not have to include a disclosure statement on advertisements, business cards or social media. Click here for your disclosure requirements.
Click here to read more about a range of statutory obligations as a Professional Standards Scheme participant.