Series claims · segregation of duties · portfolio transfer
Professional indemnity insurance (BAV) for a guardianship and administration firm
At a firm with hundreds of files the most dangerous mistake is not the isolated slip, but the working method that goes wrong the same way in every file.
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Deze pagina in het Nederlands: Beroepsaansprakelijkheidsverzekering voor een bewindvoeringskantoor.
The calculator and the quote form below are in Dutch. Prefer to do this in English? Email info@finassverzekert. nl or call 072 - 509 24 56 and we will take it from there.
Work out for yourself what it would cost.
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- We compare the offerings of several insurers
- An adviser checks whether the cover suits your activities
- We arrange the switch, including cancellation
A premium indication, not personal advice. Prefer to talk it through? Call 072 - 509 24 56.
In brief
An administration firm carries the same statutory risk as the individual administrator, but on a different scale. Article 1:444 of the Dutch Civil Code makes you liable for loss caused by a failure in the care of a proper administrator, and Article 6:170 of the Dutch Civil Code also makes you liable for mistakes by your staff. If something in your working instruction is wrong, for example in calculating living allowances, in applying for a periodic benefit or in monitoring rent payments, that affects not one file but the whole portfolio. The general framework is set out on the hub page on the BAV.
That is why the series claims arrangement is the most important article in the policy conditions for a firm. Claims arising from the same cause or the same course of conduct are usually treated as one claim, allocated to the year of the first notification. That works both ways: you pay one excess, but there is also only one maximum for all the files involved together. So when setting the sum insured, do not look at the average file, but at the scenario in which a systematic mistake is put right over several years.
The second firm-specific point is handling money flows. You manage estate accounts, make payments and have access to clients' banking environments. If a member of staff takes money, that is not a professional error but a property offence. The BAV does not pay for it. Insurers ask about segregation of duties, authorisation matrices and the annual accounting to the subdistrict court. For the risk of money being taken there is separate fraud or money insurance.
This page deals with one situation. The full overview is on Compare professional indemnity insurance (BAV).
What to look out for
Four points that are different on a firm policy from a one-person practice.
The group of insured persons
Insure not only the company, but also the directors, the employed administrators, trainees, hired-in workers and any locum. If an individual member of staff is held personally liable under Article 6:162 of the Dutch Civil Code, he must fall under the same policy. If someone leaves, that cover must continue for the work done during the employment; check that this is stated in the policy conditions.
Taking over files
If you take over a portfolio from a firm that has closed, claims about the old period come into play as soon as you become the point of contact. Ask for retroactive cover with a retroactive date that includes the acquired files, and have the transferring firm arrange its own run-off cover. Also review the files on their merits: a mistake you take over and allow to continue becomes your mistake.
Supervision and accountability
The subdistrict court judge reviews your rendering account under Article 1:445 of the Dutch Civil Code, and the Besluit kwaliteitseisen curatoren, beschermingsbewindvoerders en mentoren (the Dutch decree on quality requirements for guardians, administrators and mentors) sets requirements for business operations, training and insurance. A measure or dismissal as administrator is not an insured loss, but the file behind it often does lead to a civil claim.
Exclusions that affect a firm
There is no cover for: fraud, misappropriation and intent (Article 7:952 of the Dutch Civil Code), even where a member of staff is the culprit; fines and penalty payments, including sanctions imposed by regulators; and your own remedial work, such as rebuilding a set of records and the hours your team spends on it. Liability for third parties you engage is not automatically included either.
What does your premium depend on?
- Number of current administrations: the main measure of the size of the risk
- Number of staff and distribution of files: the number of files per administrator says something about the workload
- Internal controls and segregation of duties: who posts, who pays and who checks
- Sum insured per claim and per year: partly determined by the series claim scenario
- Portfolios taken over: determine how far back the prior-acts cover must run
- Claims history and complaints: earlier notifications and current proceedings count in underwriting
Insurers weigh these details differently. That is where your saving is.
What is covered
| Situation | AVB | BAV |
|---|---|---|
| A standard letter with the wrong account number causes payments for a hundred people to go astray | No | Yes |
| A member of staff forgets the annual application for special assistance in dozens of files | No | Yes |
| After a ransomware attack all payments stop for two weeks and arrears build up | No | Provided that |
| A person under administration falls in your waiting area over a raised floor strip | Yes | No |
| A member of staff is injured when an archive rack falls over | Provided that | No |
| A member of staff knocks over a parked scooter with the company car | No | No |
A mistake in the working instruction hits the whole portfolio at once. So look at the amount per claim, not per file.
Frequently asked questions
This is what people ask us most.
A hundred files, the same calculation error. Is that a hundred excesses?
Usually not. Claims arising from the same cause or course of conduct count as one claim under the series claim provision. You then pay one excess, but there is also one maximum for all the files together. Read the exact wording, because insurers differ in how broadly they interpret 'the same cause'. With a systemic error that difference determines whether you stay within the limit.
A member of staff has taken money from an estate account. Does the BAV pay?
No. Professional indemnity insurance covers mistakes in professional practice, not theft or misappropriation. For that risk there is fraud insurance, also known as money and fidelity insurance. In the meantime you still have to make good the loss to the person under administration, and the subdistrict court judge will ask what measures you are taking to prevent a recurrence.
Are our directors covered by the BAV?
Only for mistakes in professional practice. Allegations about running the company itself, such as improper performance of duties under Article 2:9 of the Dutch Civil Code or liability on insolvency, belong on directors' and officers' liability insurance. Firms with a foundation or private limited company as administrator need both policies.
What other cover do we need?
For injury or damage to property during home visits and at the office you need public and employers' liability insurance. Your files contain sensitive personal data, which makes cyber insurance a practical choice. If your services stop because your systems fail, business interruption insurance is worth discussing. The BAV does not pay for your own downtime.
Read more
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