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Whether you have a large corporation or small to medium enterprise, business today is tougher and more challenging than ever before.
We will help you protect your business when you need it most and prevent you from further losses
We’ve got your business covered, but what about you and your family?
You’ve worked hard to build a thriving business, but life can be unpredictable. While we have your business risk covered, in a serious event what you value most could also be at risk – you, your family and your livelihood
Benefit from our partnership with Allianz Global Assist and get a 30% discount by placing your business through our website!
We will insure your vehicle, truck, trailer, and a full range of registered / conditionally registered vehicles including earthmoving equipment.
Backed by the largest insurance market in the world, Lloyd’s of London, Dream Wedding Insurance provides comprehensive wedding insurance to Australian’s getting married at home or overseas.
We now have a dedicated Retail Division to help you place and manage your retail insurance such as home and contents, motor vehicles, boats, caravans, motorhomes, motor bikes and domestic farms.
Austbrokers Coast to Coast have partnered with Vero Insurance to be able to provide you with a tailored policy that suits your specific hairdressing and beauty therapist needs.
Whether you live in a duplex or a high rise, we can help you access the best policies on the market.
Home and contents insurance is important cover and should be considered by all consumers. It seeks to cover the insured for damage to their home as well as the contents of the home.
From building damage to loss of rent,
this insurance is vital in making sure that
your investments conintue to grow
We know that a serious accident or illness away from home can cost hundreds of thousands of dollars in medical and air ambulance expenses so we make sure our clients hold the best cover for the occassion
Benefit from our expertise in this complex market. Ask to speak to our Corporate Team for more information
Buying a car is an exciting and often frustrating experience. Aside from the usual questions about fuel efficiency, blue tooth connectivity and whether red really does make it go is faster, we need to worry about how safe the car is. Well here are nine things
1. Anti-lock brakes
Anti-lock brakes (ABS) do more than just stop a wheel from locking. They also control traction control by applying the brakes (and/or adjusting engine speed) when they detect wheel spin.
2. Stability control
This system can prevent drivers from losing control of their car when swerving unexpectedly. It’s also compulsory in all vehicles and is more commonly known as ESP, but also as DSC, DTSC, ESC, ESP+, VDC, VSA and VSC.
3. Electronic brake-force distribution (EBD)
Another bit of technology to help you stop, EBD eases brake force if the grip is different at each wheel, helping to stop the car in a straight line.
4. Lane-keeping technology
Similar to those little bumps on the side of the freeway, this technology vibrates the steering wheel when the car strays across lanes without indicating.
5. Pre-tensioned/load-limited seat belts
Pre-tensioned seat belts take up slack in the belt when they detect if a crash is imminent. Load limiters help stop serious injury by stretching the belt slightly in a crash if too high a load is placed on the occupant.
6. Dual-stage airbags
Inflating less rapidly in lower severity crashes, these airbags significantly lessen the chance of airbag-related injuries.
7. Seat-mounted side airbags
Seat-mounted side airbags protect the pelvis, chest and abdomen in a side-on crash and unlike door-mounted airbags, stay in the correct position when the seat is moved.
8. Side curtain airbags
This type of airbag drops down from the roof lining and protects the heads of passengers in the front and rear of the car.
9. Isofix child seat mounts
One of the most important safety features are these mounting points for child seats which are built into the car seats, rather than the adult seat belt, making installation of the child seat much easier.
A car or a motorbike is often one of the most expensive things that you will own. The freedom of driving on the open road is difficult to match but those open roads are varied in both location and condition.
Whether you own your vehicle outright, are paying off a loan, or someone else owns it and you are driving/riding it, appropriate risk management is pretty important. Not everyone has the same level of experience or care on the road. In many cases, it doesn’t matter how good a driver you are, as your chances of being in a bingle are very high. According to the Australian Bureau of Statistics, there are over 600,000 road accidents in Australia each year, costing the economy an estimated $27 billion annualy.
But it’s not just car crashes that you need to worry about, with statistics showing that 1 in every 9 cars are reported stolen each year.
So as careful as you are with your pride and joy, there’s always a chance that something will, not could, go wrong – making motor vehicle insurance a must.
Compulsory Third Party (CTP) insurance is the most basic level of cover, and as the name suggests, is compulsory by law. It is generally covered by the government or is included in your vehicle registration fees, depending on which state you live in. This type of insurance provides cover for death or injury to those involved in an accident - apart from the driver.
Unfortunately, CTP insurance doesn’t cover anything that happens to your vehicle or any damage caused by it. For that you need some form of motor vehicle insurance.
Motor Vehicle Insurance: Different Levels of Cover
Motor vehicle insurance has different levels of cover and as is the way with most insurance products, the more cover you take, the more it will cost.
This type of insurance covers the cost of damage caused to other people’s property and legal costs but not damage to your vehicle. It includes items such as other cars, buildings, fences, lamp posts and traffic signals.
Much like Third Party Property Damage, this type of insurance covers the cost of damage to other people’s property, but will also cover you for damage caused to your vehicle by fire or theft. It does not cover damage to the owner’s car caused in a road accident.
The name pretty much says it all – as this insurance product covers you comprehensively. It covers the repair or replacement of your vehicle for events including theft, collision, fire, malicious damage and weather-related damage, such as hail or flooding.
Comprehensive insurance will also cover the cost of repairing and replacing any other vehicles that are damaged by your vehicle in an accident, and damage to property.
In many cases, depending on your policy, it may also cover personal property in the car, death benefits, towing, legal costs and even hire cars needed while repairs are being done. These are usually treated as optional extras, so make sure you talk to an insurance broker or your insurer about which type of policy is right for you.
As with many aspects of living, the law has an effect on everybody - insurance is no different. Several legal aspects are discussed below:
Duty of disclosure
An insurance company asks potential policyholders a number of questions so that it can decide whether to provide insurance and at what cost. The policyholder has a legal obligation to disclose all relevant details that may affect the terms of insurance. This includes any modifications made to a vehicle after the insurance policy is acquired, such as body modifications and sound systems. ‘Hotted up’ cars can be insured, depending on a number of factors, but it is important to disclose all information relating to the modifications. Obviously, this may affect the cost. Some insurers will choose not to insure cars that have been modified, while others tend to specialise in this type of insurance.
Some parents insure the car of a young adult in their own name. This leads to a lower cost, assuming the parent has a reasonably sound driving record. This practice is, in fact, fraudulent as it misleads the insurance company on the level of actual risk and therefore the cost. If your children are of driving age and own their own vehicles, they should have their own policy. Ensure you inform your broker or your insurer if you have children that are of driving age and drive your vehicle as not doing so could void any claim you need to make.
Under federal law (Privacy Act 1988), there are strict guidelines related to the type of information that private-sector organisations, such as insurance companies, can ask. The laws govern the purpose for which information can be used and the way that information about policyholders is treated.
The cost of motor vehicle insurance is determined by the level of cover - the more cover taken, the higher the cost will be, and the level of risk. When you buy motor vehicle insurance, the following factors are considered:
How old you are at the time you get your insurance policy will affect the price of your premium. The younger you are the more you pay because statistically drivers under the age of 25 are more likely to have an accident. Once you hit that magical time of life called 25 or over, the cost of your insurance can drop quite a lot. However, it will generally rise again when you’re over 65—because statistically, seniors, like younger drivers, have a higher accident rate.
Sorry to say guys but studies have been done that show men drive more aggressively than women and are prone to have more accidents, and the prices they are charged for insurance premiums reflect this. Overall, women pay 12% less than males with a similar age, location and driving history.
If you have a spotless driving record with not even the slightest scratch of your car you will most likely pay a lower premium than someone who has had a few incidents. Some car insurance companies even reward safer drivers with ‘safe driver discounts’.
Cars that cost more to repair cost more to insure and cars that have been modified or ‘pimped out’ cost more again. Cars with extra safety features will normally cost less to insure because the safety features result in less claims and lower claim amounts. So before buying a car you might want to research the average prices for insurance for that make or model to avoid any unpleasant surprises.
If you live in a neighbourhood that has a statistically high crime rate you will have to pay a higher premium than someone who lives in a safer area with the same age, same driving record etc. People who live in and near cities pay more than people who live in rural areas because there is more traffic with a bigger chance of having an accident.
When it comes to choosing your policy it can be hard to figure out what’s a reasonable price to pay. So make sure you get plenty of quotes from different insurance companies or talk to a broker to find the policy that covers your needs at a price that suits you best. It's also important to remember to read the conditions to see what’s covered and what isn’t.
In terms of how your vehicle is valued, most insurers will offer two choices - market value or agreed value.
Market value— this is what your car would be sold for on the open market at any given point in time.
Agreed value— this is a fixed value agreed to between you and your insurer.
Insurance companies generally provide a lot of options for people to reduce the premiums they pay. You can actively do a lot of things to help keep the costs down. These include:
As always, contact a broker or your insurer to check how these may be taken into account.
As with most types of insurance product, insurers will offer a range of extras that you may wish to consider. Of course, with any extra you choose, there will be an additional cost. These include:
What to do if you have an accident
When people take out motor vehicle insurance, they hope they never have to use it. Makes total sense. But with so many accidents happening every day, there’s a pretty good chance you will need to make a claim at some point.
Luckily though, most accidents only damage the vehicles rather than the occupants. The question is, do you know what to do if you have an accident?
Pleasure craft insurance is designed to protect private boat owners from loss or damage to their vessel and accessories as well as any legal liability arising out of the use of the vessel.
Like private motor vehicle insurance, there is usually a no claims bonus system and this can result in a cheaper cost if no claims are made.
Policies differ slightly among insurers, but the basic tenets are common to most insurers in Australia and New Zealand.
A typical pleasure craft owner’s policy protects the insured and anyone using the pleasure craft with the insured’s permission. The definition of BOAT usually includes:
The craft is insured for market or agreed value, and is usually accompanied by an excess. The excess is payable only when the policy holder is at fault.
Will pay/Full cover
Won't pay /No Cover
Voluntary rescue work
Extra costs- i.e. hiring replacement craft
Towing damaged craft to safety
Reduction in value- because of age or damage
Personal property on craft if lost or damaged
Cost of worn-out parts
Inspection of hull if stranded
Rust or corrosion
Recovering boat, reducing loss costs
Faulty workmanship, structural defects, design
Dismantle, clean craft if submerged
Mechanical or electrical breakdown
Pre-existing damage (prior to insurance)
Damage to tyres of trailer
Skiing or diving equipment,
Fishing equipment not permanently attached to craft,
Unsecured sails, protective covers, outboard motors
Damage to sails, masts, riggings as a result of racing.
For sailing boats, a racing risk extension is available (for races that are less than 50 nautical miles).
When filing a claim, an insured must fulfil various contractual obligations including to:
If you’re taking the opportunity to travel more, or just enjoying your boat, caravan or motor home on the weekends, there are insurance products to help make sure you’re always protected.
Whether you keep it permanently onsite, or take it across the country, caravan insurance policy provides protection against accidental damage to your caravan. You can also cover extras such as your annexe and contents.
There are usually two types of caravan insurance covers, comprehensive (which covers both parked and mobile caravan) and onsite (which cover parked and/or immobile caravans).
A Product Disclosure Statement ( PDS) is a legal document, or sometimes a group of documents, that contains information about your insurance policy. A PDS will typically include any significant benefits and risks, the cost of the policy and the fees and charges that the policy provider may receive. Supplementary PDSs may be issued from time to time and must be read in conjunction with the PDS to which they relate. A PDS will help you understand the insurance policy and give you the the information about the terms and conditions, policy benefits and exclusions that you can use to compare differet policies. You should be aware that a PDS doesn't take into account your individual needs or financial situation.
Reading the PDS will help you compare and make an informed choice about the policy and give you information on you how your insurer will respond if you need to make a claim. And most importantly, if you don’t fully understand the PDS contact your insurance company and ask for more information. It's always better to have more information than less.
When you take out a new policy make sure you have the details of your new product explained to you and confirmed in writing. In most cases, you will also have the benefit of a 30-day cooling off period. This means if you change your mind in the first 30 days after joining, and haven’t made a claim for benefits on the new product you may get a refund of any contributions you’ve paid.
Sometimes, it’s nice to take something and make it your own. Sometimes, that thing you take and make your own is your car.
If you are contemplating 'souping up' your vehicle, regardless of whether the modification you want to make is in the form of a minor safety-minded addition or in the form of a full-on facelift, there are some important things you need to know and consider, both when it comes to the law and your car insurance.
So, if customising your ride is something you feel compelled to do, make sure you do your due diligence. While we can’t help you paint those fun racing stripes on your car, we can help you with the aforementioned due diligence. Let’s dive in and have a look at the modification-related things you need to know.
Important non-insurance considerations prior to making modifications
First and foremost, before you add to or change anything on your car, you need to be certain that what you plan to do is actually legal. All vehicles being driven on the roads need to be what is termed “street-legal” — and there is every chance that your intended modifications may impact your vehicle’s street-legal status.
As a result, always notify your relevant licensing authority before making any modifications to your car.
What happens if my modifications are illegal?
If your modifications aren’t legal, typically a few of the following things will happen, all of which are pretty massive headaches:
How do I know if my modifications are legal?
In Australia, modifications to your car need to be approved by your state or territory’s motor vehicle licensing department and they must comply with the following:
What sorts of modifications are usually allowed by law?
Permissible vehicle modifications include, but are not limited to, the following:
What sorts of modifications are usually illegal?
In general, the following are no-go zones:
Important modification-related insurance considerations
Now that we’ve handled the legal stuff, let’s take a look at what you need to be aware of when it comes to modified vehicles and car insurance.
Do I need to notify my insurer?
Yes, you absolutely need to notify your insurer if you plan to make changes to your car. It’s as simple as that. Failing to notify your insurer of any modifications could lead to the cancellation or voidance of your policy and rejection of any claims you make.
In some circumstances, failure to notify your insurer about modifications may even lead to the warranty on your car being voided.
What kinds of modifications will and won’t be covered?
While policies will vary between individual insurers, when it comes to modifications, insurers deemed “mainstream” will usually cover the following:
The sorts of things that these mainstream insurers usually won’t cover include the following:
Will modifications affect the cost of insurance?
Typically, yes. While some modifications are pretty benign and won’t make a difference to your premium, where other modifications are concerned, whether or not the effect on cost is positive or negative will depend on what kind of modifications you are planning to make.
If you’ve put an alarm system in your car, which lowers the risk of theft, or you’ve added safety features, which lower the risk of an accident, then your insurance premium may actually be lower.
However, changes that impact performance and aesthetics (yes, even those fun racing stripes) usually carry a higher accident risk — and, therefore, a higher premium. Other changes that increase the value of your car — like stereo systems and custom parts —also increase its appeal to thieves, meaning such modifications also attract a higher premium.
How does me being super-young and hot affect my insurance prospects if I modify my car?
It’s pretty simple: If you modify your vehicle (particularly in a manner that is linked to greater engine capacity and speed) and you’re under 25 (and particularly if you are male), you may find yourself uninsurable, regardless of what type of insurer you try to acquire coverage with (e.g. mainstream or specialist insurer).
Who are these specialist insurers you just mentioned?
If the modifications you want to make to your vehicle will have mainstream insurers showing you the door, you may have better luck with a specialist insurer.
Specialist insurers will often provide coverage to modified vehicles in circumstances where mainstream insurers won’t. For example, specialist insurers will usually provide insurance coverage for enhancements or alterations to suspension, engine or chassis (provided such changes are legally compliant).
However, bear in mind that younger drivers with modified vehicles will typically struggle to secure cover with a specialist insurer, and premiums in general with specialist insurers aren’t extremely competitive — the idea is that they will provide you with insurance where other insurers won’t, not that they will provide you with cheap insurance where other insurers won’t provide you with insurance at all.
While the types of modifications that carry higher premiums will vary among specialist insurers just as they do among mainstream insurers, modifications that increase the power of your vehicle will usually attract a relative increase in premium with specialist insurers. For example, if the modification to your car increases its power by 15 per cent, then your insurance premium will also increase 15 per cent.
The overall message
Never make a modification to your car before doing your research about whether it’s legal and how such a modification will impact your insurance. Those racing stripes look way better on a vehicle that is both insured and not impounded.
Read more about decisions that can affect your car insurance here
This is a common type of insurance, involving a person or an organisation taking out insurance to protect against a liability they might face from a third party in connection with a business-related activity. The third party typically has suffered some kind of loss, such as physical and/or property damage, and, as a result of this, might try to argue that someone else should compensate them.
This claim would usually be a negligence claim brought against the other party. (Some claims are also covered by contract law or the federal Trade Practices Act 1974.)
To make a public liability claim, the person suing generally has to show that their injury or loss is the fault of the other person or organisation they are suing.
Darren suffers food poisoning after eating a pie at the football. If he wants compensation from the person who sold him the pie, he will have to argue that his injury was their fault. In other words, that he got the food poisoning from eating the pie, and not from any other source.
If the pie seller above is found by the court to have been negligent in serving a dangerous pie, they might order the seller to pay the injured football fan compensation. This could be a large amount. However, if the seller has public liability insurance, they won’t have to pay the amount themselves; their insurance company will pay. This could save the seller thousands or hundreds of thousands of dollars.
Recently, community concern about rising public liability costs has been raised, with many organisations and individuals complaining about increased costs. This has resulted in the cancellation of some community events because the organisers could not find appropriate public liability insurance at a reasonable price.
As a result, State and Territory governments around Australia have changed the rules relating to claims for negligence. These changes have made it tougher for a person to sue for negligence by:
With public liability insurance there must be a proper balance between compensation for those who have been injured through the negligence of others and the costs to society of asking insurance companies to pay this compensation. Everyone contributes to the costs of insurance. If too many claims for public liability are allowed to succeed, there is a negative effect on society as everyone has to pay more for insurance.
In recent years, there has been a steady increase in the number of public liability claims made on defendants with payouts rising.
From 1997 to 2003 the average size of a settled public liability claim (‘settled’ means paid out by an insurance company before the matter went to court) increased from $11,000 to almost $17, 000.
From 1997 to 2003 the average cost for a public liability insurance policy increased from about $600 to $1,400.
As the panic over dangerous inflammable cladding spreads like a bushfire, one of the country’s top strata insurance companies has come up with a course of action for worried owners.
Check your documents, then put safety measures in place if you have flammable cladding, is the message from one of Australia’s top strata insurers.
Strata Community Insurance says if a review of the original building documents show suspect cladding was installed, owners corporations should get a fire safety professional to inspect and recommend steps to improve safety.
This need not be the horrendously expensive remove and replace programme and could be a simple as a drenching sprinkler system which would at least slow the spread of fire.
In addition, says SCI, committees and strata managers should put a plan in place to recover cost and rectify non-conforming cladding immediately. They should also seek legal advice to recover costs.
Strata Community Insurance says that from early in the 1990’s, aluminium composite panel (ACP) has become a standard material for medium and high-rise buildings across Australia. It revolutionised the building sector by providing a low-cost, aesthetically pleasing skin or layer that was easy to attach to a building’s framework.
Benefits of this cladding included its ability to stop wind and rain entering a building, sound and thermal insulation as well as fire resistance. In addition, it was required to meet minimum standards under the Building Code of Australia.
In the aftermath of the disastrous Grenfell Tower fire in London on 14 June 2017 and the Lacrosse building fire on 25 November 2014 in Melbourne, questions are now being asked regarding the viability of cladding, and potential impact across Australia given the significant growth of multi-dwelling developments.
Types of Cladding
There are several types of cladding that have good fire resistance including brick, planks or weatherboards made from fibre cement, steel, aluminium and reconstituted timber products.
However, the contentious ACP cladding on Grenfell Toweri and the Lacrosse apartment building was ACP cladded with a highly flammable polyethylene (PE) core which allowed the fire to spread quickly and disastrously.
During the panel discussion at the recent Strata Fire Safety Forum in Sydney, it was suggested that for every 10 apartment blocks in Australia with cladding, approximately eight face the risk that they are covered in the highly combustible ACP cladding that caused the Grenfell Tower fire in London. This potential disaster is being compared to the asbestos crisis from the 1980s.
The panel noted that there was a higher propensity for larger buildings (from 20 to 200 apartments) being impacted, which they suggested equated to a significant portion of the housing stock. However; Paul Keating, Managing Director, Strata Community Insurance notes, “while we view the larger buildings as at greater risk because of size and height, we cannot dismiss the impact on lower level strata buildings who also need to take urgent action”.
Who is responsible?
An investigation by the ABC’s Four Corners program, which aired on 4 September 2017, revealed that some international manufacturers and their Australian suppliers were aware of the risks associated with using ACP cladding with a PE core on high-rise buildings. However, they continued to import it because Australia’s lax and ambiguous building standards allowed it.
The situation is made more complex as it is difficult to identify where the responsibility lies for installing the non-compliant material. It could lie with developers, builders, sub-contractors or suppliers. This ambiguity may mean that apartment owners will need to cover the potentially crippling bills for the ACP cladding’s removal and replacement.
Implications for insurance
Where cladding products have passed AS1530.1-1994; the Australian Standard for flammability of external building product, it is reasonable to assume that there should not be an impact on insurance cover.
However, says the insurer, where this standard has not been met, given the nature of highly flammable cladding it may be difficult to access full insurance cover without a remediation plan in place to remove or replace existing ACP cladding.
As with asbestos from the 1980s, insurers will look to limit this additional risk. Today, it is almost impossible to obtain insurance for asbestos-related products and Strata Community Insurance fears that ACP may follow the same path.
Owners of properties contain cladding should contact their executive committees and/or their strata managers to investigate whether there is a copy of the original architectural plans on file showing the composite of material used and whether it passed AS1530.1-1994.
In addition, they should also locate the Certificate of Conformity that was issued at the time of construction and ensure that their insurer is aware of both the existence of the cladding and its conforming (or non-conforming) status. A failure to disclose such information to their insurer may result in there being no cover under their insurance policy.
“As evidenced with the recent Grenfell fire, some ACP (including the PE core version) is highly combustible and needs immediate remediation and/or replacement and, with the recent publicity, the onus is now on lot owners to demand action given the potential for disaster,” notes Mr Keating.
Miles Stratford has a stark warning for insurers, landlords and property managers – get ready, because a methamphetamine-fuelled storm of litigation is heading your way.
It is advice worth heeding. For the past five years the Auckland-based risk manager has been at the forefront of efforts to come to grips with New Zealand’s unfolding crisis with methamphetamine, or ‘ice’ as it is colloquially known. He fears the insurance and property management industries in Australia and internationally are in for a rude and costly awakening.
At the moment, no-one is really worried about it because they don't see it as a problem – it is a hidden issue,” Miles says. “But wind forward 12 months and if real estate agents, property managers, conveyancing solicitors and other intermediaries haven't changed their habits and behaviours, you are most likely going to have a whole bunch of risk and liability that sticks.”
For most landlords and property managers, the closest they have probably come to the world of illicit drug deals and organised crime until now is watching the latest cop show on television. However, a huge escalation in the supply and use of ice in recent years – including a proliferation of meth labs in rented apartments, houses, sheds and other buildings – has drawn many unsuspecting property owners into the web of criminal activity that surrounds the drug. It is becoming increasingly common for landlords to find that their rental house or unit has been turned into a veritable factory. Kilograms of dangerous synthetic drugs could be churned out, impregnating walls, floors, carpets, curtains in the procees. Even plumbing systems with highly toxic and volatile chemicals pose a severe and lingering health threat and could even trigger an explosion.
The damage caused can run into the tens of thousands of dollars. Specialist cleaners using highly specific chemicals and techniques are required, and the process can take weeks. In the American state of Virginia, for instance, Department of Health guidelines on the steps that need to be taken to clean residential properties run to 19 pages and stipulate 13 key actions1. Miles says in New Zealand the cost of such clean-ups typically comes to between NZ$15,000 and NZ$30,000.
Owners keen to offload their property are often also required to disclose if it has been used as a meth lab, potentially hurting its capital value2.
In New Zealand, homebuyers are increasingly insisting on meth tests before completing their purchase, and of almost 13,000 properties tested by Miles’s company MethSolutions since 2012, about 40 per cent have had traces of the drug.
Tip of an iceberg
The illicit nature of the ice trade means that its scale can only be estimated, but official figures on drug seizures and meth lab busts, combined with wastewater monitoring and surveys of drug use, give some clue as to its scope.
From 2009 to 2013, the amount of ice seized globally more than doubled from 32 to 88 tonnes3, while seizures at the Australian border jumped 60-fold from 2010 to 2014.
The rise of ice has been so rapid that it is now widely considered to be the second-most commonly used illicit substance in the world, after cannabis, with some estimates putting the number of users as high as 54 million worldwide5.
Australia has become an especially attractive market for criminal networks because a combination of rapidly rising demand and high relative wealth has meant users are paying high prices. It has been reported that in 2013–14, the street price of ice in Australia was AU$675 a gram, compared with AU$268 in the United States, AU$122 in the United Kingdom, AU$111 in China and just AU$14 in Mexico6.
In the US, almost a third of state and local police agencies reported last year that methamphetamine was the greatest drug threat in their area7, and surveys indicate that the number of new users jumped 71 per cent between 2010 and 2014.
While the international trade in ice is large, the nature of the drug means that criminals are also producing it locally to meet domestic demand.
Because it is a purely synthetic drug that does not involve growing plants (unlike cannabis, cocaine and heroin), it lends itself to being made in basic labs on a small scale, making production highly mobile9. So, as quickly as authorities shut down one meth lab, others spring up.
In Australia in 2013 police detected 608 clandestine meth labs, with a notable trend towards larger operations, with an attendant increase in the contamination they produce and the risk they pose10.
The problem is being amplified by an emerging trend for drug makers to spread their operation across multiple homes, says Aon Risk Solutions Sales Manager – Real Estate, Joanna Boyd.
“Different phases of the production process are occurring in different homes,” she says. “Therefore, more homes are being impacted.”
Claims on the rise
The incidence of chemical contamination caused by meth labs is causing concern for insurers, as well as landlords and property managers.
In New Zealand, insurers are clarifying their liability. IAG, the nation’s largest insurer, says it is receiving up to 80 claims a month, and pays out NZ$14 million a year to cover meth-related damage.
Faced with mounting claims, the insurer (which covers about half of the country’s 450,000 rental properties)11 has sought to ‘manage’ its costs. In March, it announced a NZ$30,000 cap on claims, an increase in standard excess from NZ$400 to NZ$2,500, a lift in landlord insurance premiums of up to NZ$130 a year and clarification that cover does not extend to damage caused to house contents12.
“Insurers have a role in signalling risk and trying to prompt better behaviours through how we construct our policies,” the insurer states. “We need to be very clear about levels of cover, and that includes establishing a higher excess so that landlords are encouraged to vet prospective tenants and monitor their homes rigorously, and that homeowners themselves remain vigilant.”
As a tenant we don’t often think it is necessary to have contents cover but this can be costly assumption to make.
A good contents policy not only covers your contents but also your Australia Wide Liability for property damage or personal injury you may cause including damage you may cause to the property you lease. We have outlined a few scenarios in which you could become legally responsible for damages to help explain this cover further.
▪ A pan catches fire causing smoke damage to the house and fire damage to the kitchen
This claim will range from $50,000 for clean up to the value to replace the entire building.
▪ Your pet damages the carpet and a scratches walls.
This could result in replacement of carpets and repairs to the walls costing $10,000. A Plaster and Paint of one wall is normally approximately $2,500.
▪ You throw a small party which gets out of control.
Uninvited or invited guests cause damage to the property inside and out resulting in repairs of $30,000.
▪ A friend visits and consumes alcohol, as they are leaving they trip and fall down a small flight of stairs.
We all have a duty of care for all persons on our property and this is legally seen as a breach of that
duty. Your friend could pursue you for medical costs and trauma. This type of claim would normally result in a minimum of $80,000 just to determine if you are liable or not. Should the claimant be successful this could increase to over $200,000.
▪ You have hired a scooter in Bali and you have your friend on the back, you have an accident and they injure themselves.
The cost of medical care and fights home will cost a minimum of $30,000. Once back in
Australia your friend may also pursue you for ongoing costs and compensation. This could result in legal costs and payments in excess of $200,000.
People without insurance who are confronted with the above circumstances are often faced with bankruptcy if they are not properly insured.
Contents insurance can be tailored to your requirements and doesn't need to be expensive. We will help you find a product that fits your requirements.
Thunderbolts and lightning are very, very frightening on their own, but add heavy rains tumbling down and golf-ball sized hail stones smashing into things, and there are many ways a storm can wreak havoc to both our property and us. Each year across Australia and New Zealand, storms and hail cause hundreds of millions of dollars’ worth of property damage and injuries to people. Here you will find some information on what to do before a thunderstorm or hailstorm.
Here are some things you can do to protect yourself, your family and your property if you live in a storm prone area.
On one of the television channels special report shows they had an session last week (May 2017) criticizing the insurance industry including a broker over damage to a vehicle that had been insured for only third party property damage.
This form of cover is risky in itself as there is no cover for damage to the vehicle when the driver themselves is at fault and or if it is damaged whilst parked and the person that hit the vehicle does not leave an honest note. Further there is no damage for weather perils or if the car catches fire or is stolen.
Having said this there are fire, theft and third party property damage covers available, but they are still not as good as comprehensive.
I do not know the circumstances of the matter and cannot comment as to why the other vehicles insurer is not coming to the party. There may be an exclusion such as drink driving, unregistered vehicle, or the vehicle may have been un-roadworthy. it is possible that the insurance may have expired. These are all risks you take when you do not have full comprehensive insurance.
In addition to remind people of this issue I also want to again warn that there are a lot of unscrupulous firms preying on unsuspecting people. They typically focus on people in the lower socioeconomic community. This group of course can least afford to be caught up in the scam financially and often do not have the training or experience to know how to fight the fraud.
What we have seen is such a person, end up with a repair bill of say $10,000, plus a hire car bill of over $25,000, kindly provided by the scammer, when the damaged car has a net value after salvage of say $5,000.
This is becoming a major problem in Australia, along with staged accidents, dodgy repairs. It was great to see arrests reported a little while back on fake injury claims and I know the insurance industry is throwing a lot of resources on building the case against many others as well.
The sooner the better as it sickens that any one is caught by scammers but particularly those who are already victims and can least afford it.
Any journalists out there please be careful of the companies you inadvertently promote in your programs and please go back after a few months and ensure that the whole thing has had a good ending for the innocent party.
The great promiseof autonomous vehicles , aside from saving you from the tyranny of commuting, is their ability to save lives by replacing stupid humans with intelligent computers. But these cars, at least in the short-term, could make driving riskier because people don't yet understand the technology or just how it works.
British auto insurance companies call this "autonomous ambiguity," and it is not an abstract issue. Automakers like Audi, Cadillac, Mercedes-Benz, Tesla, and Volvo already or will very soon offer vehicles that do some of the driving for you. In a new white paper, the Association of British Insurers argues that drivers don’t understand the limitations of these semi-autonomous systems, and believe their car is more capable than it really is.
“This risk of autonomous ambiguity could result in a short term increase in crashes,” said Peter Shaw, CEO of Thatcham Research which collaborated on the report.
As magical as it may seem to sit in a luxury sedan as it zips down the highway without any assistance from you, these semi-autonomous systems remain somewhat basic. They combine adaptive cruise control to main a safe following distance and automatic lane keeping to keep the car within its lane. Such systems typically require clearly delineated lane lines, reasonably good weather, and, most crucially, driver attention in case something goes awry.
Dire warning aside, the British insurers “strongly support” vehicle automation, arguing that artificial intelligence will reduce accidents and save lives. Some 40,000 people died on US roads last year, and the figure is rising .
But the technology's early days worry the researchers. Systems differ, as do their capabilities. Automakers have varying ideas on how best to implement the technology, and because there are no standards, drivers can't be sure how a particular system works. And it's not like automakers are in a rush to explain what these semi-autonomous systems can't do—their flashy adverts typically highlight how clever they are.
With that in mind, the Association of British Insurers suggests a simple, two-stage, classification for cars—assisted or automated—and says international regulators should get on board. Under its proposal, an "automated" car is capable of driving itself in virtually all situations, come to a stop safely if it cannot drive itself, avoid every conceivable crash, and continue working even if something in the system fails.
Few people expect the automotive industry to reach that level of autonomy at a large scale for at least another decade. And that means just about every vehicle with any kind of autonomous tech will be labeled "assisted." That may seem like a small distinction, but the idea is to remind drivers that the car is not fully in control.
The Insurance Institute for Highway Safety in the US agrees about the looming problem, but says terminology isn’t going to fix it. The automakers must find ways of ensuring that drivers understand they must be alert and ready to take the wheel. “They need to make sure the technology keeps the drivers engaged,” says IIHS President, Adrian Lund. “Just putting it in the owner’s manual won’t work.”
Automakers are taking heed. After Joshua Brown died when his Model S sliced under a truck that turned across his path in Florida in May 2016, Tesla modified its AutoPilot system with increased visual and auditory cues when drivers take their hands off the wheel for too long. Mercedes-Benz offers a similar trick with its Drive Pilot, although it can be confusing to use .
Cadillac takes things a step further with its Super Cruise , which the automaker calls the first truly hands-off semi-autonomous system. It monitors drivers using a camera behind the steering wheel to ensure they're looking up at the road, not down at their phone. It also engages only on divided highways.
The day is coming when your car is a better driver than you are. But until that day, consumers must remember that semi-autonomous vehicles are not infallible. Anything that automakers–and regulators—can do to remind them of that will only make everyone safer.
Cyber breach could kill your business, Lloyd's warns
At Austbrokers Coast to Coast we are always looking for tools to assist our clients to minimise their risk. A claim is not always the best result and, even though we can put cover in place to protect you against lost stock and machinery breakdown - sometimes prevention is the best measure!
Maxichill Refrigeration and Air Conditioning Specialists have kindly supplied the following information on a device that monitors your cold rooms over 24 hours 7 days a week and prevents you arriving to work the next day to a disaster!
This not only keeps your business running but prevents multiple claims damaging your claims history and pushing your premiums up or, at worst, resulting in uninsurable items.
FRIGBOT Info Guide
Frigbot is designed to work with all major electronic refrigeration controllers such as Carel, Dixell and Eliwell.
How it works –
Your refrigeration is at your command with Frigbot. With immediate access to all the information from anywhere you know exactly what is happening at all times. You even receive alerts so your equipment can call you when it's in trouble. Download the free companion app to have your Frigbot's information in your pocket.
Frigbot is a system of new business methods that connects refrigeration companies to fridge owners creating great value for our valued and future customers
Apple of Android Based APP
With Frigbot there is no software to download, no backups and no configuration issues with your PC or Mac. Why? Because it’s all in the cloud.
We do all the backups and take care of all the other tricky stuff like security and updates. Super easy. Always on. It’s the new way to do business.
Frigbot collects the operational data from your equipment and presents it in an easy to read graph. This can not only tell you the current status of your equipment but the Frigbot report* can tell you what was happening yesterday, or last week, or however long you want to go back. It’s your very own crystal ball that provides compliance documentation and is an essential tool for fault finding and troubleshooting equipment malfunctions. The Frigbot reports can also be used as a tool to predict equipment faults (maybe before they happen).
With Frigbot you can log in and update your configuration anytime you like and from anywhere you have internet access. But the magic doesn’t stop there because Frigbot also has an incredible and unique backup feature that saves all your settings - so when you need to replace a faulty controller you can download and restore your last known working configuration . This is unique to Frigbot and a genuine labour saving efficiency.
When refrigeration equipment breaks it can be a disaster: spoilt food and loss of trade sales (plus the emotional and financial stress of the whole event) and the only person who can solve the problem is usually the very LAST person to get involved. That’s the old way of doing business!
The NEW way alerts MAXICHILL Refrigeration FIRST . This simple alert triggers faster response and quicker repairs that mean less down-time. When there’s a breakdown the focus is all about turning the situation around as fast as possible and keeping any disruptions to a minimum.
Technical Info –
Frigbot has the ability to measure electrical current in real time. This is a more advanced feature but essential if you need the operational status of refrigeration equipment. If you measure electrical current you can remotely determine if a compressor has a potential fault - this is a huge time saver for a busy refrigeration mechanic.
Diagnostic and activation information is presented automatically on the low-power ePaper display.
The Frigbot uses the cellular network to send refrigeration status and configuration information to our cloud servers. No need for any Wi-Fi connectivity, use your Frigbot’s anywhere that a mobile phone works!
MAXICHILL REFRIGERATION & AIR-CONDITIONING
Ph: 0419 102 754
ABN: 85 041 779 812
The Australian and New Zealand Institute of Insurance and Finance ( ANZIIF
) has announced the nominees for its annual awards.
The highly-anticipated tax cut for small businesses will provide much needed relief for mum-and-dad owners, with an Australian Small Business and Family Enterprise Ombudsman (ASBFEO) report highlighting the amount of tax paid by the small business sector overall has increased, while the contribution made by big business has fallen.
The ASBFEO’s Small Business Counts statistics report released today, includes ATO figures showing the small business share of company tax revenue has increased two per cent in recent years, while input from the big business sector has fallen three per cent.
“A healthy small-business sector is a prerequisite for a growing economy; there’s no doubt SMEs are doing their fair share when it comes to paying tax, not to mention creating job opportunities,” ASBFEO Kate Carnell said.
“The Federal Government’s foreshadowed company tax cuts for businesses with a turnover of up to $10 million will give 99 per cent of Australian businesses a tax reduction, and will provide a much needed shot in the arm for the sector’s growth prospects, enhancing the ability of small businesses to employ,” she said.
Compiled over the past 12 months, the ASBFEO statistics report brings together data and analysis from a range of sources including the ATO, ABS and Austrade, and has been released to mark the office’s one year anniversary.
“This report provides a unique insight into the sector; it ultimately reinforces the size and importance of the small businesses to the Australian economy, and outlines its growing diversity,” Carnell said.
Among the report’s findings, Carnell said the number of small businesses currently venturing into offshore markets is on the rise.
“Encouragingly, ABS data shows more and more small businesses are entering export markets, with 44 per cent of goods-exporting firms classified as small business,” Carnell said.
“Many are also entering the global market place at an early stage of their development, giving rise to the ‘born-global’ phenomenon,” she said.
Carnell said while many small businesses are at the cutting edge of innovation, she’d like to see more small businesses go down this path.
“Our report highlights ABS data showing small business accounts for 17 per cent of business expenditure on R&D; while this is encouraging, it’s a figure I think the sector can – and will – build upon, particularly as more small businesses realise the benefits of entering into strategic partnerships with larger companies, especially in industries like defence,” Carnell said.
Carnell said the purpose of the report is to be a resource for governments, public policy makers and researchers that will improve their knowledge and understanding of the Australian small-business sector.
“We’re inviting feedback on the report and welcome comment from small business and others on how we can ensure this document is the go-to publication for small-business stats in Australia,” Carnell said.
The full report can be found on the ASBFEO website: www.asbfeo.gov.au where a feedback form is also available.
The Privacy Amendment (Notifiable Data Breaches) Bill 2017 ( bill) amends the Privacy Act 1988 (Cth) ( Privacy Act) and imposes an obligation on businesses to notify individuals and the Information Commissioner of data breaches. While the introduction of a mandatory data breach notification regime is significant, the threshold for notification is quite high.
When will it take effect?
The notification laws are expected to come into effect within the next 12 months. The bill was passed by both houses of parliament on 13 February 2017 and is currently awaiting Royal Assent.
Who is affected?
All entities that are currently subject to the Australian Privacy Principles ( APP entity) in the Privacy Act, which includes:
Also, if an APP entity has provided personal information to an overseas entity, these notification obligations may still apply as if the APP entity itself held the information.
What are the notification requirements?
An ‘eligible data breach’ is central to this legislation. An eligible data breach happens if:
‘Personal information’ means information or an opinion about an identified individual, or an individual who is reasonably identifiable, whether true or not. Common examples may include individuals’ dates of birth, addresses and credit card details.
‘Serious harm’ imposes a fairly high threshold, and is where a reasonable person would conclude that access to, or disclosure of, personal information would be likely to result in serious harm, taking into account a range of specified matters1 including:
The Office of the Australian Information Commissioner has previously considered ‘serious harm’ to include identify theft and financial fraud.2
There are three categories of obligation surrounding an eligible data breach.
Within 30 days of an APP entity suspecting that there may have been an eligible data breach it is obliged to carry out a reasonable and expeditious assessment of whether there in fact has been such a breach.
If an APP entity has reasonable grounds to believe that an eligible data breach has happened, it must notify:
An APP entity is also required to provide such notification if directed to do so by the Information Commissioner.
If an eligible data breach occurs, and the APP entity takes action before the breach results in serious harm to any of the affected individuals, then the breach is deemed to have not been an ‘eligible data breach’ and no notification steps are required.
The APP entity’s notification to the Information Commissioner and the affected individuals must be provided as soon as practicable after the APP entity becomes aware of the breach, and must contain:
What are the consequences of non-compliance?
If an entity or individual does not comply with the requirements of the legislation, they risk facing civil penalties of up to $1.8 million or $360,000 respectively or compensation orders to individuals who have suffered loss or damage as a result of the non-compliance.
What do I need to do?
If these amendments are likely to impact your organisation, we recommend action be taken now to prepare for the commencement of the bill. Such action may include implementing:
We also recommend a whole-of-business approach towards minimising cyber risks and the associated fall-out from a cyber event should be taken. As part of this, companies should consider how their present insurance coverage responds to cyber events and whether obtaining specialised cyber risk insurance coverage is necessary, particularly in light of the impending commencement of the bill.
Download Publication here
Austbrokers Coast to Coast can offer comprehensive solutions for all risks mentioned. Please contact us on 07 5586 9955
Australians are being warned to ignore a convincing but fake email-borne Origin Energy electricity bill that has been doing the rounds since 10 May.
Tens of thousands of the bogus emails started hitting inboxes at 8.30am on 10 May, according to enterprise email security provider, MailGuard.
The email, which MailGuard describes as “well-cratfed”, features Origin Energy branding, and employs the subject heading, “You Origin Electricity bill”, and is dated 16 May.
The amount due figure varies between individual scam emails, a tactic used to help it evade traditional antivirus software.
Another tactic employed by the cybercriminals behind the scam to further trick recipients into thinking the email is the real deal, is the inclusion of a line addressing privacy concerns that links to the real Origin Energy site.
The malware, which is hosted on a compromised Microsoft SharePoint account, is designed to install malicious files, such as keyloggers and other spyware, on the recipients’ systems.(An example of the fake email - (MailGuard) is below)
“The scam email originates from a fake domain – originenergysolar.net – registered in China just days ago. It was sent from servers located in France,” MailGuard said in a blog post
. “Those behind it have gone to considerable lengths to trick victims.”
The ploy bears some similarities to another email-instigated scam picked up by MailGuard last month.
According to enterprise email security provider, the scam began with a phishing email ostensibly from the Federal Government’s my.Gov.au site, telling the recipient to visit the site to verify their identity.
Recipients who click on a link in the email were taken to a replica of the real myGov site – a “near-perfect” clone of the centralised government services website, according to MailGuard.
Once victims were directed to the fake site, they were prompted to put their credit card details. Once this was done, they were then redirected to the genuine myGov website, in a bid to cover up the deception.
** Austbrokers Coast to Coast can help protect you from this loss through either Cyber Liability or Management Liability cover, please call us for a no obligation discussion in relation to what you may need to implement.
Hair and beauty salons and retail outlets are the focus of a new Fair Work Ombudsman compliance campaign that will target businesses along the east coast of Australia.
Fair Work Inspectors will conduct audits of at least 1600 businesses in randomly selected urban and regional areas of Queensland, New South Wales and Victoria. The campaign will be conducted in two phases, with audits to be conducted in waves.
Acting Fair Work Ombudsman Michael Campbell said the first phase was already underway and the campaign would take approximately 12 months to complete.
“The retail, hair and beauty sectors have been selected for audit because they employ high numbers of workers, particularly young people and workers from migrant backgrounds,” Campbell said. “In addition, previous audits into hair and beauty businesses and the retail industry have found high levels of non-compliance.”
“In 2013, the Fair Work Ombudsman released the results of a national hair and beauty campaign which identified an overall industry non-compliance rate of 55 per cent,” Campbell said. “Victoria recorded the highest rate of non-compliance with almost three quarters of salon operators audited not meeting their obligations under workplace laws,” Campbell said.
The retail industry is Australia’s second largest employer, and Campbell said a previous Fair Work Ombudsman national campaign saw $585 000 returned to 755 workers.
“Our 2012 report revealed that more than 40 per cent of the underpayments identified through the campaign were owed by NSW employers,” Campbell said. “This new hair, beauty and retail campaign will build on our previous work to reinforce the need for all workplace participants to proactively ensure they are meeting their obligations under Australian workplace laws.”
Inside Small Business
It amazes me how many times people have spoken of Act of God being both an insured or excluded peril under an insurance policy.
There was even a famous Billy Connolly with this as its theme. My nephew, Jeffery, one of the guys sending me a joke questioned me on it and I thought it was worth setting the record straight.
Despite having read thousands of policies of insurance and being involved in the drafting of 100's more, I have never seen the words 'Act of God' appear in a policy as an insured, or excluded peril.
What it means in layman's term is:
a completely unforeseeable event where there has been no human intervention
Things such as fire, lightening, earthquake, tornado, hurricane, cyclone, flood, landslip, and the like.
Under policies such as a comprehensive motor vehicle policy, all these perils are in fact, insured. Most property policies, such as your home and contents, business pack or ISR, the vast majority would be insured, although landslip, action by the sea, storm surge and flood may be excluded.
If you are in any doubt as to the cover afforded by the policy which you have in place, I recommend that you speak to your insurance broker.
Having a licence to operate a vehicle is a well known requirement. Some might not be aware of this requirement in respect of pleasure craft in particular jet skis.
The enclosed Carter Newell legal update contains discussion of an interesting case authority in respect of personal injuries litigation arising from jet ski usage and in particular unlicensed drivers.
A brief summary of the judgment: The precedent holds that failure to possess a jet ski licence, despite being a breach of policy terms and conditions, but which does not cause the accident occurring , does not give the Insurer right to deny coverage. This is true of Australian law because of protections in section 54 of the Insurance Contracts Act (ICA).
It is conceivable that in the family dynamic, the dominant driver would be licenced with other family members not being licenced. Without ICA s 54, an Insurer would be able to decline the claim. In other circumstances, where the act of not being licenced, say from lack of instructed practical knowledge does contribute to the occurrence of the claim, the Insurer will almost certainly be entitled to deny indemnity to the policy holder regardless of s 54 of ICA.
We take this opportunity to remind clients that even a family member or other acquaintance that only operates a vehicle for a minimal amount of time, exposes themselves to the prospect of being uninsured because of a technicality.
Given this case involve the unfortunate amputation below the knee of the claimant’s leg, it shows that jet ski injuries can be severe such that the potential for significant uninsured losses is far from trivial.
Below is a link to Carter Newell’s case discussion and judgment itself on AUSTLII should you wish to read more.
Below is an article published in couriermail.com.au. It again highlights the growing need to business of all sizes to hold this insurance. This is just as important as having public liability cover. We will be talking to each of you about this cover when we next review your covers but if you would like to look at this sooner please contact our office.
ONE in five Australian small and medium-sized businesses have been hit with a cyber-attack, polling suggests.
And many have paid the price in the form of cash or intellectual property, according to the survey results.
The latest Norton SMB Cybersecurity Survey indicates that 19 per cent — or about 400,000 — of the 2.1 million Australian small and medium-sized businesses have been attacked at some point by cyber threats.
Phishing scams, where criminals send emails impersonating someone and ask for money or intellectual property, are the main form of attack. The Norton survey also found 11 per cent of small businesses had been hit with ransomware attacks.
In such attacks, criminals take control of computer systems remotely until a ransom is paid.
Among those targeted, 34 per cent paid the ransom at an average cost of $4677.
Cyber security expert Mark Gorrie from Symantec said he had even heard of businesses paying a $50,000 ransom to regain control of their data.
“Two respondents said that had paid more than $50,000 to recover their data…once they are in that situation and realise they can’t survive without that information, they are paying up.
Professional car thieves have colour preferences when choosing their targets, according to a new study by the National Motor Vehicle Theft Reduction Council.
A black 1997-2000 Holden Commodore VT is three times more likely to be stolen for profit than a red one, but black and red Commodores have similar short-term thefts rates.
By type, green small and medium passenger vehicles are the most likely to be stolen.
The 2015/16 theft rate for green cars was 3.58 per 1000 vehicles, followed by black at 2.96.
The next most popular targets by type are large black passenger vehicles, black sports vehicles, green SUVs and black light commercial vehicles.
Black cars became increasingly popular to own in 2015/16, up 29% since 2011/2012, and even more popular to steal, up 56% since 2011/12.
Red 1995-2000 Nissan Pulsars have the highest theft rate by model (29.6 thefts per 1000 registrations) – a 46% higher theft rate than blue ones.
Black 2006-13 Holden Commodores have a 57% higher theft rate than silver ones.
The insurance bill for the hailstorm that pummelled parts of Sydney and the Illawarra on February 18 has passed $350 million, according to latest figures from IAG and Suncorp.
IAG today announced it has received more than 20,000 claims, expected to cost $160 million, and its net exposure could reach $200 million after allowing for reinsurance.
Suncorp has received about 11,000 claims across its insurance brands, at an estimated cost of $150-$170 million.
The Insurance Council of Australia says 48,000 claims have been received for the hailstorm, with 38% for damage to motor vehicles, while roofs and incidental contents claims account for the rest.
IAG is close to its 2016/17 natural perils allowance of $680 million, reaching about $650 million at the end of February. However, a 2016/17-specific natural perils cover of $96 million effectively extends the allowance to $776 million.
Suncorp’s total natural hazard claims stand at $610-$630 million for the eight months to February 28.
Insurance fraud comes in a few different shapes and sizes. Some types of fraud are done on purpose, some types involve small lies that may seem like they won’t matter, and some are committed without the person committing them even realising.
The cost of insurance fraud each year is big — it’s in the billions — and while it may seem easy to ignore these costs because they only affect insurance companies, the reality is that insurance fraud ends up costing you and others, be it in the form of higher premiums, higher excesses or policies with more things an insurer won’t cover — all of which are aimed at cutting down the increasing costs of fraud.
But what exactly is insurance fraud? And how can it be avoided?
What are the types of insurance fraud?
Insurance fraud generally falls into a few categories: non-disclosure, exaggeration and deliberate.
Non-disclosurecan be both deliberate and inadvertent. Fraudulent non-disclosure basically means that you haven’t revealed information to an insurer that might affect their decision to insure you or to pay out a claim. For example, when applying for car insurance, you may neglect to mention a conviction for drink-driving or you may tell your insurer that your car is always parked in a secure garage overnight when, in fact, it’s typically parked on the street. It’s important to note that even unintentional non-disclosure is still fraudulent.
Deliberatefraud is premeditated and calculated in an effort to defraud an insurance company. That is, someone planned to commit fraud to make money. Common types of deliberate fraud include setting fire to property or faking a theft in order to receive an insurance payout.
Exaggerationis pretty straightforward and is mainly limited to when a person makes a claim — it involves exaggerating the amount of damage or the cost of the loss in order to increase the payout of a claim.
As you can see from the various types, insurance fraud isn’t limited to criminals. Even well-behaved people can often be tempted to leave out important information or inflate the value of a claim for their own personal gain, and it can also be the case that a person doesn’t realise they are committing a crime by exaggerating the facts or failing to disclose important information.
How can you avoid committing insurance fraud?
Obviously, if you are deliberately committing insurance fraud, then it’s quite easy to figure out how to avoid doing it. However, in order to avoid accidentally committing insurance fraud, there are a few things you can do:
What is the insurance industry doing about fraud?
Insurance companies are putting a lot of resources and money into combatting insurance fraud, and new technology and software is being used to identify it, along with specialist claims training and engaging with specialist investigators.
Additionally, the Insurance Fraud Bureau of Australia (IFBA) works with insurance companies to notify them of information relating to possible insurance fraud so that those companies can then investigate and act on these suspicions of fraud. The IFBA also works to help develop strategies that can be used across the industry to help stamp out insurance fraud and, as a result, protect honest consumers from having to bear some of the costs of insurance fraud.
The Insurance Council of New Zealand (ICNZ) have an online form along with a toll free number (0505 372 835) where the public are encouraged to call and report information about potential Insurance fraud cases.
ICNZ use the information submitted to make investigations with Insurers who may take further action if necessary.
Directors, CEOs, General Managers, and even HR Managers beware; the Fair Work Ombudsman (FWO) appears to be increasing its activities and is taking legal action against individuals under the Fair Work Act 2009 (Cth) (“the Act”), and there can be serious consequences.
Last year saw an increase in the Fair Work Ombudsman’s (FWO) efforts to pursue directors and managers, including HR and payroll managers, for their involvement in contraventions of the Act.
Section 550 of the Act makes it possible for legal action to be taken against individuals who are personally involved in breaching the provisions of the Act. This is commonly referred to as “accessorial liability”. The FWO is utilising that Section of the Act to prosecute personally those who make decisions which contravene the Act, particularly in respect to underpayment of wages.
Accessorial liability applies when an individual is “involved in” a contravention of the Act. Section 550 states that an individual will be considered as being “involved in” a contravention if the person:
Where its proven that an employer has committed a contravention and an individual has knowingly and intentionally been “involved in” that contravention, both parties can be held liable for the same offence and may be subject to separate penalties.
HR Manager Held Responsible
In the past 12 months, accessorial liability was dealt with in several notable decisions, including in FWO v Oz Staff Career Services Pty Ltd & Ors  FCCA 105 where it was found that the Company had been falsifying its employment records and unlawfully deducting around $130,000 in wages from dozens of cleaners that it had employed.
It was found that the employer had been unlawfully deducting meal allowances and other fees from employees’ wages. Despite the employer admitting to a contravention of the Act, the HR Manager denied any involvement. However, the Federal Circuit Court found that the HR manager was aware of the deductions and knew that they were unlawful. Therefore, the Court found that the HR manager was “involved in” the contravention and was ordered to pay a penalty of $9,920.
Continual Breaches Treated Seriously
The Courts have clearly indicated that where an individual has previously had contact with the FWO, they will be taken to have knowledge of workplace laws and accordingly, contraventions of the Act that occur after contact with the FWO will be treated more seriously.
This was the case in FWO v AIMG BQ Pty Ltd & Anor  FCCA where a director of one employer was also the director of another associated entity that had had previous dealings with the FWO. In that case the director had given the FWO an undertaking and commitment to properly pay all employees engaged by companies of which he was a director. It was then discovered by the FWO that the associated entity was not paying its employees correctly and had failed to keep proper time and wages records. Consequently, the FWO took legal action against both the company and the director. The Court found that the director’s previous dealings with the FWO and the fact that he had breached undertakings provided to the FWO made his contraventions more serious and the Court ordered the director to personally pay a penalty of $8,160.
Individuals Are Now Able to be Held Jointly and Severally Liable
Most cases involving underpayment of wages have required the Company involved to back pay wages to employees. However, a case from last year demonstrates that an individual can now be held jointly and severally liable for repaying unpaid wages to staff.
In FWO v Step Ahead Security Services Pty Ltd & Anor  FCCA 1482, the Gold Coast security company involved in the contraventions had only operated for a short period of time. The Federal Court decided that it was unlikely that the Company would be able to back pay outstanding wages to former employees, as it would be more than likely wound-up in the near future. Accordingly, the Court ordered that the sole director and the employer Company would be held jointly and severally liable for the amounts underpaid. Therefore, if the Company did not back pay the wages, the Director would be personally liable for paying a total of $22,779.72. In addition to the underpaid wages, the sole director was ordered to pay a record penalty amount of over $51,000 and the employing company was ordered to pay penalties amounting to $257,000.
After the case, the Fair Work Ombudsman stated:
“Unfortunately, there are some rogue business operators who think they can short-change their staff and get away with it by liquidating their companies and hiding behind a corporate veil … so they should think again, as we will seek to hold them to account at every available opportunity” (Courier Mail 20 June, 2016)
On-going Responsibility and Liability
In FWO v Sona Peaks Pty Ltd & Anor  FCCA 6015, it is now clear that the FWO will also pursue individuals for their contraventions of the Act even after their involvement with an employer has ended. This is demonstrated by the decision where the Federal Court made a garnishee order against a former director of an employer who persistently failed to pay the penalty ordered against him.
The individual in question was the sole director and secretary of a restaurant that had underpaid its staff. As result of the underpayment contraventions, the director was ordered to pay a penalty of $23,715, which he didn’t pay. To recover the amount, the Court made a garnishee order which required the director’s new employer to pay regularly until the penalty was paid in full.
What Can Businesses do?
The simple and straight-forward answer is to ensure that due diligence is applied by Managers and Directors and make sure that all staff are being paid in accordance with the law and that proper records keeping practices are in place. These cases demonstrate that the FWO is working harder than ever to ensure that employers comply with Award, Agreement and legislative requirements and it also demonstrates that the Courts are prepared to hold those individuals personally liable for a range of penalties and underpayment amounts.
It is fair to say that much of this increased activity and action by the FWO can be attributed to the 7-Eleven matter, and it now appears that other fast-food chains have been involved in underpayment of wages as well.
By Greg Arnold
Director and Principal Consultant
Effective Workplace Solutions
The 32-year-old is locked in a nightmare dispute with insurer AAMI, which rejected his claim on the basis of what he says is a flawed analysis of photographs he provided as evidence of ownership of the stolen items, costing him close to $187,000.
And experts say a common glitch in time and date stamps on images stored by online cloud services could put other claims at risk, with metadata left exposed to accidental or intentional corruption.
Mr Dowsett has spent the past nine months fruitlessly trying to have a $51,000 claim on his home and contents insurance settled, finally lodging a complaint to the Financial Services Ombudsman.
It all started on April 28, when he and his partner returned to their rented home in the Perth suburb of Rivervale to find it stripped of valuables, with his remaining possessions strewn all over the place and a sliding door damaged after being jimmied open.
“Each room downstairs had been ransacked, the television, sound system and DVDs were missing from the loungeroom and the door of my safe was wide open and emptied of its contents,” he said.
Also among the missing items were a drone, two designer and smartphone watches and cash from a recent motor vehicle sale, the latter not covered by the insurance policy.
When AAMI raised questions about the time stamps on photographs taken from his Google Photos cloud platform, Mr Dowsett explained that they appeared to be showing the dates when he uploaded them, between May 20 and 23.
He said other photos showing these dates had in fact been taken during his March hospital stay, and provided evidence of this to AAMI.
Telstra confirmed the Galaxy Note 5 was not in Mr Dowsett’s possession. Source: Supplied
Crucially, the Samsung Galaxy Note 5 used to take the photographs — a fact confirmed by AAMI’s forensic analysis — was not in his possession at the time AAMI alleges they were taken.
News.com.au has seen a copy of a letter from Telstra confirming that Mr Dowsett had traded in the Samsung Note 5 on March 3, replacing it with a Samsung Galaxy S7 Edge.
After retrieving the original images through a Samsung switch backup restore, Mr Dowsett said, he examined them using a Jeffrey’s Image Exif Viewer, a free online tool for analysing metadata embedded within images such as time, date, camera or device used and location.
The results, he said, showed that the photographs of his Samsung and Gucci watches had been taken on February 24, while that of his Cannon EOS digital camera had been taken on February 28.
But AAMI refused to acknowledge this when he provided them with this evidence, he said.
On October 20, the insurer officially rejected his claim, alleging that it had been made fraudulently, while cancelling his policy.
THE PERILS OF DIGITAL EVIDENCE
According to Matthew Warren, deputy director of Deakin University’s Centre for Cyber Research, digital time stamps are notoriously unreliable.
“The problem is, any data can easily be manipulated,” Mr Warren told news.com.au. “Time stamping is a key aspect of digital forensics, but it can be corrupted and altered. It’s such a grey area, and it’s going to become more of an issue as we move more into digital evidence.”
Metadata on images could be altered both on purpose or by accident, such as when resizing files or forwarding them by email or Facebook.
“It’s actually a problem of using cloud services because you don’t know who has access to your data on the cloud,” he said. “It’s something that insurance companies are very concerned about.”
Unfortunately for people like Mr Dowsett, he said, “there’s not a lot you can do if the insurance company doesn’t trust the evidence”.
“When someone takes a picture and uses it as evidence, a lot of that’s based on trust,” he said.
“If an insurance company thinks that manipulation has occurred, they simply won’t pay the claim.”
But if the master copy was provided with raw, unedited data, that would give a claimant the best possible chance.
‘NO SATISFACTORY EXPLANATION’
AAMI declined to comment on Mr Dowsett’s dispute, citing privacy restrictions.
In its letter rejecting his claim, the insurer claimed that he had failed to attend appointments, which Mr Dowsett disputes.
“Our investigations indicate that you have deliberately provided false and misleading statements regarding the circumstances of the claim,” the letter said.
“You have not been able to supply a satisfactory explanation for why the images supplied were taken after the event, in the absence of evidence to the contrary we conclude that these items were not stolen as claimed.”
Mr Dowsett has taken the dispute to the Ombudsman, seeking a reversal of the insurer’s decision, plus compensation.
If you live in a bushfire prone area you need to develop a Bushfire Survival Plan for you and your pets. Whether you choose to relocate your pets during high risk days or keep them at home with you, it’s important to plan for their safety as well as your family’s. But please remember to always put your own safety before the safety of your pets.
Here are some basic steps you can follow to help keep your pets safe and sound:
Find more information on keeping your pets safe during bushfire season at:
One of Steve Manning's early YouTube vlogs explained why it was important for all of us to have contents insurance. He explained it was not just to cover you for the loss of your household contents but to both his and my mind, it is the public and personal liability coverage that you have with the policy, typically $20 million. To view the video please go here .
Just how important this coverage is was brought home to me in the recent Queensland Court of Appeal decision of Silwood v Chandler  QCA 273.
Here a visitor to the defendant's home slipped on a step which had been washed down that afternoon and not dried. It appears that was no sensor lighting in place and due to the time of night the step and the fact it was wet was not visible to the visitor. The visitor slipped and put their arm through a glass window sustaining a very nasty gash to their arm. The full extent of the injuries I am not sure but they do sound quiet serious.
The home owner argued, without success that some allowance should be made to the award to the fact that the visitor had been drinking. The amount was not disclosed.
The 3 judges involved, Atkinson J, McMurdo P, and Gotterson JA upheld the trial judges decision to award $650,000 to the injured party. Can you image trying to fund that plus the costs of both the first trial and the court of appeal yourself. This is where a few hundred dollars to purchase contents insurance does not sound that bad now does it!
Remember, insurance ain't insurance, to make sure you have the right coverage to protect you, please speak with an insurance broker
Quite simply the introduction of new Privacy legislation in March 2014 changed the landscape for all sized firms to consider privacy protection and subsequently cybercrime to protect their business, regardless of size.
The Privacy Act 1988 (Privacy Act) protects personal information. Personal information is information or an opinion that identifies someone or could identify someone. Some examples are your client's name, address, telephone number, date of birth, medical records and bank account details.
On 12 March 2014, changes to the Privacy Act commenced. These changes include a new set of Australian Privacy Principles which set out how private sector organisations must handle personal information. They also include changes to the way credit information can be collected and used.
Therefore, if you think about how most businesses trade, you start to realise that any business that holds customer details need to understand and comply with the new legislation. Eg retailers who simply use EFTPOS machines or take client's credit card details. Companies like your own brokerage firm that use IT systems to collect information and money from your clients - is their information adequately protected?
Below is a link outlining how the new legislation has changed and how it can affect you and your clients:
What about Cyber Crime? How are small businesses exposed?
Wikipedia defines Cyber Crime as: https://en.wikipedia.org/wiki/Cybercrime
Computer crime or cybercrimeis crime that involves a computer and a network (we all have one of those!)
It goes further to explain that, The computer may have been used in the commission of a crime, or it may be the target. It defines cybercrimes as: "Offences that are committed against individuals or groups of individuals with a criminal motive to intentionally harm the reputation of the victim or cause physical or mental harm, or loss, to the victim directly or indirectly, using modern telecommunication networks such as Internet (Chat rooms, emails, notice boards and groups) and mobile phones (again we all use these tools in our private and professional lives).
Our news feeds are filled with many examples of Corporate Cyber Crime – they sound surreal and the idea of “it won’t happen to me ” is still common with small to medium sized companies - they simply just don’t believe anyone would ever do that to them - but isn’t that what insurance is all about – protecting against the unforeseen?
We are all intrigued by a good Cyber Crime story – in fact we have found a list of the Top 10 Cyber Crimes of 2015 for you – check out the link below:
So how can a small company protect themselves?
There are many options in the market for companies to protect themselves against cyber liabilities but not all companies can afford the premium associated with the level of coverage offered. An alternative could be an endorsement to an existing policy.
An overview of coverage available through our recommended insurer is as per below:
Section a) Third Party cover-
This covers reasonable costs incurred such as:
So if you would like to talk to us or need a quote please contact us on 07 5586 9955
It’s every homeowner’s worst nightmare: losing part or all of your home to the devastating effects of a natural disaster. But the only thing that can make such a difficult experience even more traumatic is finding out the insurance — which you purchased in the belief it would provide financial support if such an event took place — will actually not be adequate at best, and will be completely useless at worst.
Those living in New Zealand can take comfort in the knowledge that the Earthquake Commission (EQC) is in place to provide insurance for damage to residential property sustained in earthquakes, storms, floods, volcanic eruptions, natural landslips, tsunamis and hypothermal activity for those who have home and/or contents insurance. The EQC provides cover for up to $100,000, and natural disaster insurance can be purchased on top of that to cover any damage that exceeds the EQC’s level of cover. Pretty straightforward, right?
But it’s a totally different story in Australia.
Variations between policies
In Australia, the variations in terms of natural disaster coverage in home and contents insurance policies can be quite vast. These variations often result in underinsurance, leaving people who thought insurance would cover the cost of rebuilding or repairs to foot a fairly significant portion of the bill out of their own pocket.
Of particular concern is the damage caused by floods and storms. In the case of the former, not all home and contents insurance policies provide coverage for such an event. In the case of the latter, while home and contents insurance policies do typically cover such an event, the level of coverage differs greatly among insurers.
As such, before you purchase a home and contents insurance policy, it is supremely important that you know exactly what natural disasters you are covered for, as well as how much your insurer will pay in the event of one of those disasters.
How flood insurance works
Following severe floods in New South Wales, Queensland and Victoria during the summer of 2010-11, a Natural Disaster Insurance Review took place. As part of the recommendations of this review, the federal government put in place a standard definition of “flood” for all home building and contents policies in order to limit confusion among consumers about what they are and aren’t covered for when it comes to flood insurance.
This universal definition of flood is as follows:
“The covering of normally dry land by water that has escaped or been released from the normal confines of any lake, or any river, creek or other natural watercourse, whether or not altered or modified; or any reservoir, canal or dam.”
As such, any flooding that does not fit within the parameters of this definition — so anything that has been contributed to by human error, like a broken washing machine, a hole in the wall of your property, etc. — will likely not meet the requirements for coverage under your insurance policy.
The types of disasters to consider when purchasing coverage
In addition to flood (inland flooding accounts for nearly a third of insured losses in Australia), these are the other types of natural disasters you should be considering when selecting a home and contents insurance policy:
The key facts sheet
In addition to the development of a standard definition of the term “flood”, another recommendation of the Natural Disaster Insurance Review was a requirement that insurance companies provide consumers with a “key facts sheet” where home building and contents insurance is concerned. The key facts sheet must be concise and clear in nature. The aim of this requirement is to make it much easier for purchasers of insurance to understand exactly what their insurance policy will and won’t cover.
The institution of such a requirement should make it much easier for those seeking home and contents insurance to determine which of the above-listed natural disasters a potential insurance policy will cover.
What to check before making a policy purchase
As always, before you purchase an insurance policy, it’s important to get a range of quotes from different insurers and analyse the detail and coverage of each potential policy to ensure your ultimate selection is actually going to afford you coverage that matches your needs and situation. When purchasing a home and contents insurance policy, these are the questions you should ask yourself:
Don’t be afraid to ask these questions — as well as any others you may have — of any potential insurer. Their purpose is to provide coverage, and the only way they can do that adequately is if you are insured for all the right things.
When considering home and contents insurance, it’s also important that you have a fairly decent estimate of what your home is worth and what it would cost to rebuild or repair it. If you have the most accurate estimate, then you will be able to secure insurance that will be enough to give you peace of mind, at least, should the worst happen.
We all know the lines, Australia's fastest growing insurer, we understand you, little red quotes, etc etc. The tv advertising claiming lower premiums and great service when you need them. Unfortunately the reality is quite different. The fact is that these companies ply us night after night with advertising because they need new clients to replace the ones that are leaving following the misfortune of bad experiences when they needed these companies most. Below are the annual survey results in relation to some of the well known insurers:
Satisfaction scores for insurers Youi, Coles and Budget Direct are below the industry average and the trio may find it difficult to retain home insurance customers, according to Roy Morgan Research.
The research company’s satisfaction survey for the year to October, based on interviews with more than 30,000 household insurance policyholders, produced an overall satisfaction score of 80.7% – up from 78.5% in 2013 and 74.3% a decade ago.
Youi scored 79.5%, Coles 77.3% and Budget Direct placed bottom in the survey of 18 insurers with 75.7%.
“It is worth noting that three of the major challenger brands… are all below average when it comes to satisfaction and likelihood of renewing,” Roy Morgan Industry Communications Director Norman Morris said.
“Our data shows these insurers are gaining new customers but they may have difficulty in retaining them.
“To be successful, it is crucial for insurance companies to retain customers.”
The Royal Automobile Association of SA tops the rankings with a score of 92.1%.
Suncorp-owned Apia is second with 89.3%, followed by RAC WA (87.5%) and IAG-owned SGIO WA (85.7%).
RACQ Insurance is fifth with 84.5%, followed by RACV (83.4%), IAG-owned NRMA Insurance (83.3%) and CGU (81.7%).
Rounding out the top 10 are Suncorp-owned AAMI (81.4%) and Allianz (80.9%).
Suncorp Insurance is 11th with 80%, followed by sister company GIO on 79.8%.
QBE scored 79.4% to take 14th spot.
Christmas is a time for fun and celebration but amidst the tinsel and festivities, what is known as the “silly season” can pose a number of risks for business owners. Here are our best tips on how you can avoid some of festive season’s risks.
Party time - excellent
According to recent figures by employment law consultancy Employsure , over 80% of businesses will host some form of end-of-year party this month. While this is a great time to celebrate the hard work you and your team have put in over the past 12 months, it can also be a time when things can go very wrong, particularly with alcohol involved. In fact, last year alone, over 70% of bosses disciplined staff due to bad behaviour at a Christmas function.
So what can you do to ensure that your Christmas bash doesn’t turn sour?
In Australia, the festive season also happens to be smack-bang in the middle of storm and bushfire season for large parts of the country. The damage a large-scale thunder storm, cyclone or bushfire can cause is difficult to deal with at the best of times, but during the Christmas period many building, production or distribution services already stretched, making the impact of a natural disaster during this time much more significant. It’s always advisable to ensure your insurance cover is up to date and factors in the cost of your business being disrupted as well as the cost of replacing physical items. Talk to a qualified insurance broker for more information on ensuring you’re adequately covered.
As Christmas approaches, the lead up to the break can be extremely busy, with businesses working overtime to complete orders, finish projects or get ready for those much vaunted Boxing Day sales period.
Research conducted by GIO Workers Compensation has shown that there is a rise in workplace accidents during the Christmas period as many businesses cut corners or don’t take proper safety precautions in a rush to meet deadlines. Whatever your deadline is, the cost of a workplace accident is far greater.
Similarly, the rush to deliver on time coupled with employees taking leave during the Christmas period means many businesses turn to temporary staff to help out. As with any new employee, temporary staff will likely be unfamiliar with your business processes or safety practices, which could lead to mishaps both in terms of worker injury or productivity.
Make sure your temporary staff are performing tasks that match their skills and experience and provide any new employee, temporary or not, with a proper workplace induction.
With the increased demand of products and service, many businesses can fall behind delivery schedules. To prevent angry customers from lashing out or tarnishing your reputation, make sure you keep communicating with them and providing updates on when they’re likely to receive your product or service. Generally, people don’t mind waiting as long as they’re aware of it and will go out of their way to talk about a good customer service experience, which can go a long way in helping you grow your business.
Hail is caused when raindrops are lifted up into the atmosphere during a thunderstorm and then supercooled by temperatures below freezing, turning them into ice balls.
Thunderstorms are extremely volatile weather systems and winds blow in all directions, including strong updrafts and downdrafts.
When the powerful winds inside a thunderstorm carry the water droplets high enough to freeze, they turn into tiny hail stones.
Small hail stones get bigger when downdrafts carry them below the freezing point, where they are coated with a layer of liquid water, before being lifted up again where the new layer of water freezes.
In this process pea-sized hail can become golf ball-sized hail, which can in turn become tennis ball-sized hail in the right conditions.
The blocks of ice fall to earth once they are too big and heavy for winds to keep them in the air.
According to Bureau of Meteorology archives, the biggest reported hail stones in Australia have fallen in south-east Queensland.
On November 11, 1869 there were reports of hail stones with a diameter of 20 centimetres, weighing more than half a kilogram, battering the greater Brisbane area. An observer remarked that "hail caused much damage to crops and cotton."
Twenty-centimetre hail was also reported in the Sunshine Coast community of Holts Hill on December 13, 1943, when a resident described the hail as "considerably bigger than hens' eggs."
Further to my recent post regarding Youi in NZ and following from their conviction on 15 representative charges bought by the Commerce Commission for misleading sales techniques, Youi NZ have now been fined $100,000 by the Insurance Council of New Zealand for breaches of the Fair Insurance Code.
Following a disciplinary process, the ICNZ Board decided on imposing a financial penalty rather than the most severe sanction it could impose, termination of Youi’s membership of ICNZ, but warned Youi that any future misconduct risked their membership being terminated.
My initial thoughts were that Youi got off lightly and should have been expelled, but after considering the comments of the ICNZ President, Chris Black and giving the matter further consideration, I believe that this is the best outcome.
I can certainly understand the logic of the approach taken from ICNZ in that had Youi been expelled, they would no longer be held accountable for the standards set by the ICNZ. Although their actions have brought disrepute onto the insurance industry in New Zealand, they have demonstrated remorse, have made commitments to reviewing and changing its systems, processes and monitoring to prevent a recurrence and are strong supporter of the industry.
The ICNZ made significant changes to strengthen its Fair Insurance Code to raise the standards of service to consumers when it issued the revised Fair Insurance Code early this year. To my knowledge, this is the first time they have imposed a significant penalty on a member for breaches of the code and it is pleasing to see that they are prepared to do this to protect the rights of insureds.
Insurers should brace for an above-average cyclone season due to weakening La Nina conditions in the Pacific Ocean and warmer than average sea temperatures to the north and east, according to the Bureau of Meteorology.
The cyclone season begins next month and ends in April.
The bureau says Australia has a 67% chance of an above-average season, while the west has a 59% chance, the northwest 63%, the north 56% and the east 58%.
In neutral years the first tropical cyclone to make landfall typically occurs in late December, while in La Nina years it usually hits in the first week of December, the bureau says.
Insurance Council of Australia spokesman Campbell Fuller says even an average cyclone season – consisting of 11 events, four of which make landfall – can be devastating.
“An above-average year could bring many more than that, and each one has the potential to cause catastrophic damage if it crosses the coast in a heavily populated area,” he said.
“Only one cyclone made landfall last season, and that was in a sparsely populated part of WA’s Pilbara. There’s no guarantee Australia will be so fortunate this summer.”
Tropical Cyclone Marcia cost insurers $544 million from more than 37,000 claims when it struck Rockhampton in February last year. In 2011 Cyclone Yasi cost insurers $1.4 billion.
Floods are one of the most common hazards in Australia, causing millions of dollars’ worth of property damage each year. Some develop slowly and can be easier to prepare for, while others, such as flash floods, can overwhelm a town in just a few minutes. Floods can be local, impacting only on a neighbourhood or community, or very large, affecting entire river basins and multiple states. The impacts of floods can be devastating for families and businesses alike. Here you will find some information on preparing for floods, what to do during a flood and after the floodwaters recede.
Being prepared for a flood
What would you do if your property was flooded? Are you prepared?
If you live in low-lying areas, near water, in an area prone to wild storms and heavy rain, behind a levee or downstream from a dam, you need to always be prepared for flooding. Even if you live in an area with a low risk of flooding, it’s important to be prepared because anywhere it rains, it can flood.
You can use this flood warning map to see the latest rainfall and river conditions and any flood warnings that have been issued.
Having flood insurance is very important so check your policy or talk to your insurance provider to see if you’re covered.
Other ways to prepare for a flood are:
A global riskDDOS attacks are very common worldwide. Over 15 per cent of UK small businesses were hit by DDOS attacks last year - and they are so easy to launch that even a child can do it.
Mitigating the riskA cyber-policy can protect businesses against the direct costs of cyber-attacks such as lost profits, as well as other costs such as defending claims from third parties.
Lately there has been a spate of house fires around Australia where the tenant has been uninsured. Having been doing claims for over 45 years now, I have witnessed countless times the devastating effect that not being insured has on someone.
When landlords lease out their commercial premises it is standard practice to at least have the tenant hold public liability insurance. This is a basic risk management measure to protect the landlord from becoming the last resort for most public liability matters, as these issues can often fall back to them as an occupier’s liability rather than a building owner’s responsibility.
With these two issues rolling around in my head, I have come up with 5 major reasons why I believe that all landlords of residential properties should insist and seek proof of their tenants having contents insurance.
Contents insurance is inexpensive for most people. Less than $10 a week for approximately $50,000 of contents cover and as I say typically $20 million of that all-important personal and public liability.
Think about it, you could be helping yourself and your tenant!
The winner of the inaugural QBE-sponsored Stephen Ball Memorial Award for Insurance Broker of the Year is Dale Hansen of Austbrokers Coast to Coast.
QBE Executive General Manager Intermediary Distribution, Jason Clarke, said: “This is a special year for QBE and the NIBA Awards. We’re building on our commitment to fostering the emerging talent in the industry through our long-time sponsorship of the student and trainee of the year awards. We’re also incredibly proud to be sponsoring the peak industry accolade for the first time – the newly renamed Stephen Ball Memorial Awards for Broker of the Year. This award reflects so much of Steve – his integrity, commitment to mentoring, education and professional development, which are captured in the components of the prize.”
The Vero-sponsored Warren Tickle Award for Young Broker of the Year was awarded to Noel Kelly of Austbrokers AEI Transport.
Vero has sponsored the Warren Tickle Memorial Award for the over 25 years.
“Vero recognises the vital importance of nurturing, developing and supporting the young talent that enters our industry. We have long been avid supporters of Australia’s young brokers and we look to their opinions on where our industry is heading in the future,” said Sam Sanfilippo, Head of Suncorp’s International Intermediaries business.
NIBA CEO Dallas Booth says: “It’s a great pleasure to be awarding the first Stephen Ball Memorial Award for Insurance Broker of the Year to Dale, who has set very high standards for his broking business, for his commitment to his clients, his community, and his staff. It was a challenge for the judges this year, with all finalists examples of excellence in insurance broking.”
“Noel has established himself as a very fine young insurance broking professional, who strives for the best and seeks to achieve high levels of support for his clients. Noel is a deserving recipient of the Young Broker of the Year award.
“All Broker of the Year and Young Broker of the Year finalists are exceptional brokers, and it is an honour to be able to recognise and celebrate their hard work. They set a benchmark for the rest of the profession.
“We would also like to thank QBE and Vero for their sponsorship of the two awards.”
At the same time, CGU was crowned General Insurer of the Year.
Booth says: “Congratulations to CGU for winning General Insurer of the Year for the second year running. This award is determined as part of the NIBA Broker Market Survey, where over 1,000 brokers gave their feedback on the performance of insurers in the past 12 months. The award recognises the strong efforts CGU have put in to servicing and supporting brokers and their clients in the past year.”
The Lex McKeown award for 2016 went to Robert Kelly, managing director and CEO of Steadfast.
NIBA President Graham Stevens congratulated Robert on receiving the award. “Robert is very widely acknowledged across the industry as one of the true leaders of this profession. He epitomises the commitment to quality advice and service to customers, and has been a major inspiration for the development and success of the cluster group model in Australia.”
Meanwhile, Maria Parry, of Austcover Queensland, was named Student of the Year. And Veronica Harrison, Oxley Insurance Brokers, NSW, was Trainee of the Year.
Many modern cars, particularly European cars have a service key that is kept in the log book or service book kept in the glove or other compartment in the car.
This is well known to thieves and they are breaking into cars and people do not realise that the key is stolen. When the quarter glass or whatever other damage is repaired by the owner, the thieves return and simply drive off with the repaired car.
I understand that Audi have written to all their customers advising them to take the key out of the car and this is the advice that I am giving to everyone who has this system. The problem is that many car owners do not even know about the service key. In my own car the key it is painted black and was in a separate little pocket in the service book cover. I took it out and put it in a key safe and am glad I did.
The move now is to have the service key as being part of the normal key but can be extracted from the larger day to day key. My car keys have this as well so I am not sure why they have the second separate service key.
My advice therefore is to assume nothing, check your (and in the case of insurance brokers have your clients check their) service and log books for a service key and if you find one take it out of the car and keep it in a safe place.
The number of break-ins into cars is increasing. Following a break-in to my wife’s car a week or so back when 2 other cars in the street were likewise broken into, thieves hit at least one of the cars in our street again last night.
Last time, while our CCTV could not identify the thieves, there were three of them, the thief, a driver and a lookout, I was surprised that the thief was in the car for over 2 minutes and went through it extremely carefully. It was only when I discussed the matter with super insurance investigator Peter Hiscock from Peter Hiscock and Partners that I learned that the service key was the likely target.
This time both my wife’s car and my own were off the street as I had instructed the builders doing some renovations that I needed the driveway cleared which they did. This meant the cars were under a sensor light and CCTV.
Little comfort for the neighbour though. I will be taking over some alarm stickers that I have had made up for her to stick on her car and to see if her vehicle has lost the service key.
Australia is probably the second-most litigious country in the world after the US, according to US management liability specialist Kevin LaCroix.
He says class action filings have surged in the US and are on track this year to reach the highest number since 2004.
Mr LaCroix, Executive Vice President at liability group RT Pro Exec – a division of Chicago-based wholesale brokerage RT Specialty – was a keynote speaker a the Australian Professional Indemnity Group’s conference in Sydney last week.
He says a number of differences exist between the US and Australian class action environments.
Litigation funders have a greater role in Australia and procedural issues are more straightforward, but the “loser pays” principle acts as a deterrent.
“The US is still more litigious, but I think in the rest of the world Australia is probably second – Australia and Canada.”
Class actions have played a role in improving corporate disclosure and provide an effective mechanism for handling large cases such as the Volkswagen emissions issue, he says.
“If you didn’t have a way to handle that collectively, it would be a mess for everyone. Everyone bemoans class action litigation, but it can be very efficient.”
In the US, securities lawsuit filings numbered 119 at the end of June, pointing to a full-year total of 238, which would top the level in 2008 during the global financial crisis, according to Mr LaCroix’s figures.
The previous spike was in 2004, driven by an era of corporate scandals including the failure of Enron.
Mr LaCroix says the latest increase comes amid more actions against foreign companies with US listings, lawsuits related to initial public offerings and case law developments in Delaware.
“All these factors together are contributing,” he told insurance NEWS .com.au. “Unlike the earlier years, it is not one single thing.”
This year high-profile cases have been filed against companies such as Volkswagen and Brazilian oil company Petrobras. Australian miner BHP Billiton faces legal action following the collapse of a dam at its joint-venture project in Brazil.
Mr LaCroix says there is also a trend among some plaintiff law firms to pursue smaller companies, rather than take on the bigger burdens of pursuing large corporates.
“To use a US baseball analogy, they are trying to be singles hitters, rather than home-run hitters.”
He says weakness in premiums is a global issue amid heightened capacity and competition in the sector, and which is unlikely to disappear quickly because insurers remain reluctant to lift rates.
“There is a restraining effect on the desire of insurers to raise their rates. In the end, the ability to be the one disciplined player in an undisciplined market is very difficult.”
There is no doubt that the last 5-10 years has seen massive changes in technology and hand-in-hand with that the increased take-up of social media by individuals and by businesses as an effective marketing tool.
I would also suggest that almost everyone that has a Facebook or Twitter account has their own stories of “Posts” and “Tweets” that they would prefer were not in the public domain. In most cases they were put there not of their own making but were the result of others “friends” making comments on their page or account. Many of course have “posted” or “tweeted”; thought about what they have said, and upon reflection have thought they probably shouldn’t have said it – but it’s there for all to see.
This lack of consideration of consequences; naivety; a desire to express individual’s views, and often the need for revenge can have disastrous consequences on businesses and staff. This can often be the case with staff members who for whatever reason decide that they want to make public their views of other staff members and indeed their employers. For some it’s a quick and easy way to “vent” or exact revenge upon a person or an organisation. These comments can damage the reputation of a business, or it can result in bullying and harassment claims.
The Damaging Facebook Campaign
Most notably is the recent case of a Club in Brisbane where staff were not happy about being transferred to a labour hire company as the basis of their employment with the Club. Some of the disgruntled staff, with the assistance of other organisations started up a Facebook campaign page under the guise of a campaign against reduced penalty rates. Regardless of the truth surrounding all of the claims and counterclaims, that Club became the centre of this public campaign.
There were many disparaging posts and comments made by former staff, current staff and people who, in my view had no idea what the real issues were, but were happy to jump on the bandwagon. There is no doubt that the Club suffered considerable damage, if not to its reputation then certainly in the costs to mount a publicity defence against the Facebook campaign. One need only ponder if this sort of campaign would have been likely and as easily orchestrated 10 or 15 years ago when Facebook did not exist as it does now.
There has of course, been many cases in the Fair Work Commission (FWC) and other Tribunals and Courts that have had to deal with the fall-out from social media outcomes. These cases started in about 2011 with the infamous “Linfox” case where the employee pleaded ignorance and naivety in respect Facebook posts about the Company and other managers and colleagues. In this case it was found that the employee had been unfairly dismissed for a number of reasons, including upholding of the plea of ignorance as to how his Facebook page worked, as well as the fact that there was not a Social Media Policy in place at Linfox at the time to provide the employee with guidance as to what was acceptable or otherwise.
There are numerous cases where people have taken unfair dismissal claims resulting from termination because of social media comments, some have been successful and others not, and commentators have clearly indicated the lack of consistency from the FWC in their deliberations about social media matters.
This was demonstrated in the most recent case involving Centrelink when they dismissed a staff member who had publicly posted that Centrelink customers were “spastics” and “whinging junkies” and taking aim at the Government. In this case the dismissal was held to be unfair by Vice-President Hatcher of the FWC because of the employee’s extensive length of service of 20 years; that the conduct was not factually related to his work; and that the conduct caused no harm to the Department.
In spite of a perception of inconsistency arising from the FWC approach to these issues, there are some consistent principles that are critical for a dismissal of this kind to be upheld by the FWC. They are:
1. That it is important for the employer to have a clear policy on employees’ use of social media, covering what is and is not acceptable use (including examples) and setting out the consequences for misuse;
2. That the social media content must clearly identify the employer;
3. That the content must have the capacity to damage the employer’s reputation and business;
4. As knowledge and use of social media continue to expand rapidly, the ability of employees to argue they were unaware of how to control the use of it will diminish.
Need for Social Media Policy
It is absolutely critical to have a Social Media Policy in place before an employer can attempt to defend a dismissal based on inappropriate use of social media. The Policy needs to be a quality document that has application to your workplace. Here are some tips:
(a)It must be robust and is clear to the staff as to what is expected and what will not be tolerated in respect to social media, including the reference to the “Like” button;
(b)It must be a policy that is clearly understood;
(c)It must be properly communicated to all staff as part of an induction and refresher process;
(d)Ideally it should be referenced to your Bullying and Harassment and Anti-discrimination policies so that there is a clear link “cyber-bulling”
The bottom-line for businesses is, if you don’t have a social media policy in place, then you risk not being able to defend any disciplinary action that you take against staff who may have potentially damaged your business.
If you would like some help in drafting and implementing an effective Social Media Policy in your organisation, please don’t hesitate to call us at Effective Workplace Solutions
Travel insurers do not usually cover losses caused by army coups, the Insurance Council of Australia (ICA) says.
It has urged Australian tourists affected by the failed military uprising in Turkey to check their policies.
“Each travel insurer has different terms and conditions,” CEO Rob Whelan said.
“Travellers should review their policy document to check its inclusions and exclusions, and contact their insurer if they have questions.
“The attempted coup doesn’t void travel insurance policies, and policyholders in Turkey will still be able to lodge claims for a wide range of losses that are unrelated to the uprising.”
Travel policies usually contain exclusions on claims arising from riots, wars, rebellions, civil unrest or military insurrections.
Turkey has been rocked by political instability as President Tayyip Erdogan orders a crackdown on suspected supporters of Friday’s failed coup.
As reported in the latest edition of Risk Management magazine, many of us now use our smartphone to provide a single point of access to personal information such as financial data, medical records, photos and videos, as well as work-related email, calendars, documents and other business information. Unfortunately, hackers know this and far too many people have inadequate security on their phone. Hackers naturally see the phone as a way in.
The image at the end of this post is a screen shot of a message a professional photographer who I know received, which turned out to be completely bogus. I am glad he contacted me before doing anything.
To learn more about this real threat and mitigation strategies, I would refer you to the full article which can be found here . I have taken something away from this article which I will now ensure is actioned at LMI Group.
Never just assume that everything you own is covered under your policy. We take a look at what you should look out for!
On behalf of the team here at Austbrokers Coast to Coast I would like to thank you for your continued support of our business.
At a Gala Awards Ceremony in Sydney last Wednesday 31/8/16, Austbrokers Coast to Coast were announced winners of the Australian and New Zealand Institute of Insurance and Finance (ANZIIF) Insurance Brokerage of the Year for 2016.
Without the loyalty and continued support of our clients we would not have been able to win this prestigious award.
Whether you are a longstanding client or have only recently become a client, I would personally like to thank you for placing your trust in the team at Coast to Coast to manage your insurance needs.
With sincere thanks,Dale Hansen
Youi will plead guilty to misconduct charges, including making false sales pitches, filed by the New Zealand Commerce Commission.
The commission, New Zealand’s competition watchdog, filed 15 charges against the insurer in the Auckland District Court last week following a year-long investigation into allegations of unscrupulous sales tactics.
The South African-owned insurer is alleged to have committed the acts between July 2014 and February this year.
“Youi has co-operated with the commission’s investigation and has indicated it intends to plead guilty to the charges,” the commission says in a statement. “As this matter is before the court, the commission cannot comment further at this time.”
A spokesman for the commission told insuranceNEWS.com.au a date for the court hearing will be known in coming weeks.
Youi allegedly failed to inform customers they are not obliged to pay for unsolicited insurance invoices and gave false or misleading information during sales phone calls.
People requesting policy quotes were told they needed to provide credit card and bank account details, and unauthorised direct debits were then made from the accounts.
“From the point the issues were brought to our attention we co-operated fully with the commission and speedily implemented changes to our business practices that had fallen short of customer expectations, service standards and legal requirements,” Youi CEO Danie Matthee said. “We unreservedly apologised to all affected customers.”
Youi has notified the Insurance Council of New Zealand about actions taken to improve procedures.
While there are many very reputable firms in motor trade there is a criminal element operating in Victoria in particular.
One of the many scams is staged accidents, often involving an innocent woman who is driving alone. The third party then offers to have the car fixed by a friend who turns out to be a crooked panel beater who charges way over the top, the third party disappears and the innocent motorist is left with a huge bill.
In one case, the innocent people were beaten when they said they were going to the police.
Other cases involve a lawyer who writes with supporting documentation from the same dodgy panel beater again claiming way over the true value.
The whole thing is well known in the panel beating industry. One of my team had someone run up the back of his Ford tray utility vehicle in their BMW. There appeared to be no damage but to be sure, took it to a panel beater and asked that he put it up on the hoist to see if there was any damage. The panel beater came back and said that there was none but if he wanted to have some he should take his car to “X” panels.
If you are or know anyone involved in an accident, my recommendation is that you do not take your car anywhere other than an authorised panel beater of your insurer, or if there is an insurer for a responsible third party to their authorised repairer.
Do not just rely on the third party sending you to a “mate”.
The whole situation is taking the sheen off the panel beating industry and tarnishing the reputation of the many good folk that own and work in it. It certainly needs to be addressed by the insurance industry and the police as soon as possible.
The panel beater that I personally trust and find does exceptionally good work is Mr Gloss at Moorabbin who is an authorised repairer for many insurers.
This September marks the 350th anniversary of the Great Fire of London which led to both modern property insurance and fire brigades as we know them. I intend on writing an extended piece for this blog and am currently working on a coffee table book with my son, which will come out closer to the September anniversary.
Just as important, in my opinion, is the fact it is the 250th anniversary of the court case that led to the enshrining of the principle of Utmost Good Faith into insurance. The case we owe this to is Carter v. Boehm (1766), 3 Burr. 1905
In the course of his judgement, the famous. Lord Mansfield stated:
“Insurance is a contract upon speculation. The special facts, upon which the contingent chance is to be computed, lie most commonly in the knowledge of the insured only: the underwriters trusts to his representation, and proceeds upon confidence that he does not keep back any circumstance in his knowledge, to mislead the underwriter into a belief that the circumstance does not exist, and to induce him to estimate the risk, as if it did not exist.
“The keeping back such circumstance is a fraud, and therefore the policy is void. Although the suppression should happen through mistake, without any fraudulent intention, yet still the underwriter is deceived, and the policy is void, because the risk run is really different from the risk understood and intended to be run, at the time of the agreement.
“The policy would be equally void, against the underwriter if he concealed; as, if he insured a ship on her voyage, which he privately knew to be arrived; and an action would lie to recover the premium.
“The governing principle is applicable to all contracts and dealings. Good faith forbids either party, by concealing what he privately knows, to draw the other into a bargain, from his ignorance of the fact and his believing and the contrary.
“But either party may be innocently silent, as to grounds open to both, to exercise their judgement upon… There are many matters as to which the insured may be innocently silent. He need not mention what the underwriter knows… An underwriter cannot insist that the policy is void because the insured did not tell him what he actually knew; what way soever he came to the knowledge. The insured need not mention what the underwriter ought to know; what he takes upon himself the knowledge of; or what he waives being informed of. The underwriter needs not to be told what lessens the risk agreed and understood to be run by the express terms of the policy. He needs not to be told general topics of speculation…”
In this first case it was found that the insurer had not acted in good faith and the client was entitled to have their claim paid.
While the Insurance Contracts Act,  (Cth of Australia) reaffirmed that this principle is the cornerstone of the insurance industry, I question when I see extremely low ball offers of settlement made to an insured, decisions to delay payments to force an insured into accepting a lower settlement, the events leading up to the portrayal of our industry around some investigators and the handling of life insurance claims, ignoring conflicts of interest, and if we are honest with ourselves what are in effect hidden commissions, if Utmost Good Faith is being given anything but lip service on the one hand but being held as something that the insured must exhibit at every turn on the other.
To examine these issues and others surrounding them to me is a vitally important underlying principle of insurance, barrister Greg Pynt from Perth and I are underwriting a one off special conference in Bengkulu, Sumatra (Indonesia) on 1 & 2 October. This location was chosen as it is very near the location of the loss which gave rise to the Carter v Boehm case. [A visit to the restored structure ( a fort) will be part of the event.]
A range of excellent speakers including Prof Robin Pearson from Hull University is being put together. Greg is up in Bengkulu this week to make sure all the logistics are in place for a smooth running of the event. While Greg and I are behind the conference and underwriting it from a cost perspective, the conference is being organised by Conference Images a company well known to many readers.
The cost of the conference which includes registration, tour speakers, lunches and dinners is a very reasonable $850 plus GST. To learn more please down load the Bengkulu Flyer or go to www.CartervBoehm.com
. Finally Greg or I are happy to take your enquiries.
The concept behind this website is that it will remain active in perpetuity with papers from the conference, photos and videos of the presentations available for use into the future and hopefully reviewed at the 300th and other milestone anniversaries of this seminal case. Obviously other papers and items of interest on the topic will be added to the proposed knowledge data base.
The final point I would make is that Greg and I are not doing this for any financial gain. It is purely for educational and research purposes for the benefit of attendees, the wider insurance community and for future generations of insurance professionals. If the conference runs at a loss we will bear the cost equally between the two of us. If it runs at a profit, all profit will be donated to an education facility in or near Bengkulu to benefit the youth of that community.
Please come along. It will be a most interesting and informative event.
Here is a video interview from the Director of a company that was destroyed by cyber attack, please take the time to watch this, it could be your business!
The following article was published in the Gold Coast Bulletin following our ANZIIF nomination for broker of the year. We are very proud that we are a finalist for the prestigious award:
BURLEIGH BASED insurance broker Austbrokers Coast to Coast is in the running for a national award.
The company, headed by Nigel King and Dale Hansen, is a finalist in the 2016 Australian Insurance Industry Awards in the Small Broking Company of the Year category.
It is the only Gold Coast and Queensland finalist in the national awards.
The small broking category is highly competitive and offered to brokerages that have demonstrated strong performance and outstanding service for their customers.
"The brokers that reach the finalist stage must be truly exceptional," CEO of the Australian and New Zealand Institute of Insurance and Finance, Prue Willsford, said.
"Austbrokers Coast to Coast is a brokerage that strives for excellence."
The winners will be announced in Sydney of August 31.
El Nino is officially over, with the Bureau of Meteorology confirming tropical Pacific Ocean temperatures and trade winds have returned to a neutral state.
The weather phenomenon usually brings high temperatures and low rainfall to large areas of Australia, and the latest event was one of the strongest on record.
The bureau says there is little chance of a comeback for this El Nino, and six out of eight international climate models suggest the opposite phenomenon, La Nina, is likely to form between now and August.
La Nina is associated with above-average winter/spring rainfall over northern, central and eastern Australia, and tends to have a greater impact on insurers due to the prevalence of flooding.
Climate models also suggest a negative Indian Ocean Dipole event is likely this winter, which typically brings increased rainfall to southern Australia.
The El Nino had dramatic effects in Australia and across the world, including an early start to the fire season, which led to devastating blazes in Victoria, SA, WA and Tasmania.
Large areas of the Tasmanian Wilderness World Heritage Area, which had not seen fire for centuries, were severely damaged.
In Queensland, fewer clouds and less tropical rain helped create conditions for the most severe Great Barrier Reef coral-bleaching event on record.
However, El Nino also contributed to a record low number of tropical cyclones during the northern wet season.
Just three were recorded, with the previous record being five in 1987/88 and 2006/07 – both El Nino years.
It's nearly that time of the year again when the Fair Work Commission will hand down the increase the Minimum Wage (FMW). This will mean that all Award rates of pay will increase by the increase that is pronounced. As is always the case, the announcement is expected in early to mid-June with an operative date of the first pay period on or after 1 July 2016.
How much will the increase be?
As is always the case, the peak Employer bodies and the Unions are "poles-apart" on their submissions for the increase. Employers are arguing for a modest 1.2% increase, while the ACTU submits that the increase should be a flat $30.00 per week I have long given up on trying to accurately predict the increase, however the trend since I can recall has been that the increase is about .5% -1% higher than the current CPI figure. In the last 5 years or so, the increase has been between 2.5% and just under 3%. CPI is currently running at about 1.3 - 1.5%. The recent interest rate cut by the RBA may also have an impact on the outcome.
So I'm going to hazard a guess and suggest that the increase will be between 2.3% and 2.5% - the lowest for a long time. But don’t be surprised if the increase is a flat dollar amount because we have had 5 years of percentage increases which results in an expansion in the range of wages, and the FWC may want to curb that expansion this year.
Do I have to pay the increase?
The question I'm often asked at this time is "Do I have to pass on the increase to my staff?" The short answer is yes; if you pay your staff under the Award.
However, if you pay your staff wages or salaries over the Award, then it may well be that you can absorb any increase into that over-Award payment. But much will depend upon the employment contract or letter of appointment that you have with the staff member and how the over-Award payment is expressed in those documents.
If you would like further information in relation to this issue, and whether the FMW increase can be absorbed into above Award payments, please do not hesitate to contact us.
"Since the writing of the article, the Fair Work Commission have announced a 2.4% increase in Award wages operative from 1 July 2016. If you would like information as to the application of this increase, and whether or not it can be absorbed into over-Award payments, please contact Effective Workplace Solutions"
One thing is becoming clear about cyber risks: the problem is much bigger than any organization’s information technology department.
My background as an IT leader and information security professional before I joined XL Catlin gives me a good vantage point on how businesses can make the mistake of thinking that cyber risk begins – and ends – with their technology operations. Regardless of a company’s size and resources, IT operations play a critically important role in cybersecurity. But the total cost of cyber risk affects the entire enterprise, and a cyber incident frequently causes problems that no IT professional, however talented, can solve.
Business continuity, third-party liability, reputational damage and regulatory compliance – those are beyond the purview of IT. A well-run IT department can minimize downtime and get systems back up, which is critical. The value of data and the cost of a disruption, however, are ultimately determined by the data owners in the business operations. While a system shutdown can be catastrophic for some organizations, business interruption and data recovery insurance are available to mitigate that risk. Regulations regarding cyber security are evolving, and insurance is available to manage that uncertainty too.
"The complexity of responding to a cyber incident and communicating with stakeholders are strong reasons to have a team, such as an executive control group."
But the business itself must communicate with its employees, customers, investors and perhaps regulators, after an incident. If a data breach has occurred, a forensic investigation and notification of affected parties are likely required. A strong, unified message is critical to convey, and that is best delivered with the help of senior executives and crisis communication professionals. One of the valuable benefits of cyber insurance is access to expert resources, from PR to forensics to IT specialists, who can quickly come in to assist.
The complexity of responding to a cyber incident and communicating with stakeholders are strong reasons to have a team, such as an executive control group. The composition of such a team depends on the size of the entity and the nature of its business. In larger organizations, it likely will include enterprise risk management staff as well as C-level leaders, such as the chief technology or chief information officer. For smaller and midsize organizations, the team might include the general counsel, chief operating officer and the head of IT, for example. Regardless of the specific titles, the functions that need to come together to discuss cyber risk include risk management, operations, IT, legal, marketing and communications. Ideally, a cyber risk steering committee or group is convened to ensure that all relevant areas of the organization are represented and kept informed. The job of managing cyber risk shouldn’t fall to one person, however; a cyber risk team can ensure that the entire organization understands the risk and adjusts procedures accordingly.
It’s important to think about cyber insurance as similar to property or commercial general liability – as a form of protection that your organization needs to continue operating.
Midsize companies have particular challenges when it comes to cyber risk. Often they have fewer IT resources, which makes them attractive targets for cyber attacks. Statistics on cyber attacks bear this out. The 2015 Cyber Claims Study from risk assessment firm NetDiligence found that 71% of cyber claims came from organizations with less than $2 billion in revenue, and 56% came from those firms with less than $300 million.
Many midsize companies also have contractual requirements with bigger organizations that increase their need for high cyber insurance limits. Based on their own perceived exposure, a midsize organization might not think it needs to purchase a lot of cyber insurance coverage, but that situation can change if a business relationship requires it. The lesson here is to look closely at your business and all risks relating to your systems and networks. How long could your firm afford to remain offline, if a cyber incident disrupted your IT operations? Could your company lose revenue or customers if that happened? Would you be able to meet your obligations to business partners?
There is a lot to understanding and managing cyber risk. A team approach is a good way to cover the bases, as well as working with expert resources and strong insurance partners to help protect your business.
About the Author
Sean M. Donahue is assistant vice president and underwriter, Cyber and Technology Insurance, at XL Catlin. Before joining XL Catlin in 2014, he was an information technology professional and holds the designations of Certified Information Systems Security Professional and Certified Ethical Hacker.
It is indisputable that the provision of free information and free services online is continuing its meteoric rise and the provision of legal services is no different.
Generally speaking, these free online legal services seem to fall roughly within 3 categories:
1. Giving of legal advice over the internet through Q&A style forum
Of perhaps most concern are those forums where answers are not even provided by a lawyer but by members themselves. The members are then ranked or given points by whether the recipient (who is in no real position to know if the answer is accurate or not) found the answer helpful. Obtaining legal advice from a person without proper legal training and experience (no matter how well intentioned that person is and how confident that person sounds in their answer) is a recipe for disaster.
Even for those forums where “lawyers” are giving the answers (and what checks are carried out to ensure they are current lawyers entitled to practise), there is such limited scope for that lawyer to obtain proper details about the issues, that the risks of the advice not being appropriate or insufficient are still quite high.
Of the sites that were reviewed for the preparation of this article, it became quite apparent that many answers are either so vague as to be unhelpful or just plain wrong.
In fact, the United Kingdom’s Guardian has previously published an article about “Law on the Web” (self-proclaimed “UK’s biggest source of Information”) which article is located at
Referring to one piece of advice given by that website, the Guardian article stated “ This is just wrong in ways that may well leave a landlord relying on it in something of a mess ” and “ Again, with a heavy sigh, this is just wrong. ”
Then “ So, even from this sample, it is clear that the 'legal advice' provided is sometimes vague and imprecise to the point of being useless. At worst it is downright inaccurate in ways that may cause substantial problems for anyone, landlord or tenant, who relied upon it.“
So if you are given legal advice on one of these forums and the advice is wrong, then you would be entitled to seek any damage you suffer from the lawyer who gave that advice, however practically speaking how do you do that? There are simply insufficient details to allow you to properly identify the lawyer (to allow you to take the action), so you are left in the hope that the website provider will provide these details (and we don’t like your chances….).
2. Provision of Legal Documents
Whilst on a brief review, some of the documents provided on these websites do at least provide a basic level of detail – any proficient lawyer knows the real devil is in the detail.
Looking at a partnership agreement for example, whilst some online partnership agreements appear to provide at least a basic level of competent detail, they simply do not go far enough in encapsulating the expectations and assumptions the partners may have in the partnership (such as the agreed roles and time commitments of the partners and any authority stipulations, whether each partner’s time is to be valued equally etc – all rich sources of potential future disputes for the partners).
Then there is the lack of advice and warning about the terms. For example, some online partnership agreements contain provisions that “time is of the essence” with absolutely no warning about what that means. Put briefly, it means that if one partner fails to comply with an obligation on that partner under the agreement by the time stated in the agreement the other partner(s) has/have a right to terminate the partnership agreement (and seek damages for any loss those non-defaulting partners suffer as a consequence of the termination) without allowing the defaulting partner the chance to remedy their default. That might be useful for the partners to know, before they sign that agreement!!
So coupling the lack of detail in the documents with the lack of advice about the terms and effect of the documents, is in our view a disaster waiting to happen.
3. Online Referral
Finally, there is the online lawyer referral service. Sometimes these services have managed to locate the “best” solicitor in your area and sometimes that lawyers has agreed to provide their services at a fixed price.
Sometimes the websites promise that the lawyers have in fact been “handpicked” and that the lawyers are the best in the legal industry. When did such flagrant advertising in the legal industry become acceptable? Yes, there might have been an interview process and yes, not all applicants might have been accepted, but how can it possibly be asserted that the lawyers they picked are the best in the legal industry?
We are often approached by such organisations asking us to join them and they will list our services (and of course there is a fee). We decline to participate, however if we had joined does that mean we are entitled to be held out to the public at large as the best in the industry?
Whilst some of the Law Firms on these websites are in fact very reputable firms with very competent lawyers, would they themselves represent to people that they are the best in the industry?? We would think not. Those claims are certainly not made on the websites of those participating firms that we checked. If you are in fact the best in the industry, wouldn’t you want people visiting your website to know that?
When it comes to the fixed price service, it then appears that some of these “best lawyers” can offer the service at a fixed price some 25% of the other “best lawyers”. Assuming for the sake of the argument that they are all the best lawyers in the industry and that each will give you a level of care expected from the best lawyers in the legal industry (so the products will all be comparable you would assume), why are some of the lawyers charging 4 times as much as others??
In truth, these websites are nothing more than a flagrant advertising service for those lawyers, making claims those lawyers themselves are not prepared to make on their own websites. Whilst the notion of fixed cost services is no doubt attractive to some people, most lawyers will be prepared to negotiate a fixed price for the types of services these websites offer (ie the production of a draft pro forma agreement).
Do not get caught up in the hype of these websites. Recognise these sites for what they are. If you cannot trust their fundamental promise that the lawyers they have located are the best in the legal industry, how can you have any faith in the site at all and those people involved.
We recommend that you always seek a referral for law firms by word of mouth, from someone that you know and trust. Otherwise, contact the Law Society for your state.
Trade credit risk for Australian businesses has never been higher, according to specialist trade credit insurance broker NCI.
NCI’s latest Trade Credit Risk Index Score for the first quarter of 2016 was characterised by some large insolvency activity, including My Baby Warehouse, Dick Smith and mining and steel manufacturer Arrium Ltd.
The Index also reveals an 80% increase in claims lodged in the first quarter of 2016 when compared to the same period a year ago, while advertising, building and hardware businesses had the highest value of claims received.
Further insolvencies are being predicted by NCI, given the high level of overdue reporting.
"The slowdown in the economic environment, especially in mining services and retail sales has had an impact on many of our customer's clients," Kirk Cheeseman, Managing Director of NCI, told Broker Buzz . "The January-to-end-of-March period is seasonally a peak period for insolvency, but the first quarter of 2016 has definitely been an increase on prior years."
Outlining why the advertising, building and hardware sectors have been particularly hard hit, Cheesman added: "Any large insolvency, such as Dick Smith, or retail brands, normally have a media or advertising credit insurance loss attached to it.
"The building and hardware industries link to building contractors, home builders, electricians, plumbers and other mining services companies whom all have struggled over the past six months. Hence the level of insolvencies at the lower end of the contracting or building food chain where margins are extremely fine have been hit."
Looking ahead to the rest of the year, Cheesman suggests the outlook is "murky rather than gloomy".
"Our statistics are showing a high level of defaults in overdue payments and collection activity. Where there is an increase in these actions, typically it will result in a higher level of insolvency activity in to the next six to 12 months," he said.
"However it is a good time for businesses to review their customers and the credit levels they are granting to ensure their customers have the facilities and capability to cope with tough economic conditions and have a good level of capital support to get them through the harder times."
The 12 year old plaintiff was an outstanding young swimmer. Just prior to the incident, she was age champion at her school and in the District, was a multiple medalist at Regional and State levels, had appeared in the top 10 age rankings at National level in four events, and was expected to compete in at least four events in the Australian Age Nationals later that year.
On 7 January 2008, the plaintiff was undertaking a training program at Lithgow Memorial Swimming Pool which was managed by Lithgow City Council ( council ). The plaintiff was training with two friends, Tom and Jordan Brodie, under the supervision of their father ( Mr Brodie ). The training program was written by her coach ( Mr Critoph ) who was the swimming coach of Kinross Wolaroi School ( school ), however, as he was away at the time he gave the program to Mr Brodie to implement with his two sons and the plaintiff.
The training program involved each swimmer diving 10 times from the deep end and 10 times from the shallow end. When commencing her second dive, but first dive from the shallow end, the plaintiff's foot slipped in what may have been a puddle of water and she collided with the bottom of the pool, rendering her tetraplegic. The plaintiff had dived from the concourse (not a diving block), and was standing near, or on, a ' no diving' sign.
The plaintiff was undertaking a track-start' dive, taught by Mr Critoph, which involved placing one foot on the edge of the concourse/block with toes gripping its edge, and placing the second foot some 50-60cm to the rear. Swimmers then lean down, placing hands at the edge of the concourse/block, and then propel themselves into the water using both hands and feet. At the time of the incident, the plaintiff would have performed track-dives on hundreds, but more probably thousands, of occasions.
The plaintiff subsequently claimed damages in negligence against the school, having a non-delegable duty of care for its servant/agent (Mr Brodie while supplementing Mr Critoph’s role), on the basis that it failed to conduct an inspection or risk assessment of the pool 'in respect of its suitability to be used for swimming training exercises involving dive entry into the shallow end' when there were non-coping tiles, for failing to warn the plaintiff of the risk of injury in performing 'track-start' dives, and failing to teach the plaintiff how to abort the dive to avoid injury. None of the allegations referred to any provisions of the Civil Liability Act 2003 (Qld) ( CLA ).
The plaintiff also claimed damages against the council for failing to prohibit dives from the shallow end of the pool (under the supervision of Mr Brodie or otherwise), and failing to have a sign that read 'Warning: Dive Entries Permitted by Trained Swimmer Under Coach’s Supervision Only' in accordance with SU22, the supervisory guideline issued by Royal Life Saving Society Australia ( RLSSA ).
The trial judge gave a verdict in favour of the plaintiff against the school on the basis that it was unreasonable that the school encouraged the plaintiff to use the ' track-start' dive at the shallow end of the pool, especially when gripping coping tiles were lacking.
The plaintiff, however, failed against the council as it would not have been reasonable for the council to be aware of the increased risk associated with ' track-start' dives, the difference between 'track-start' or other dives, or of the importance of gripping coping tiles.
The plaintiff appealed the decision against the council. The school also appealed.
The following issues were considered:
Appeal against the council
The Court of Appeal considered the RLSSA guidelines, expert evidence, and academic literature from the Department of Education and Training and Department of Local Government regarding the plaintiff's allegation that the council ought to have been aware of an increased risk of executing 'track-start' dives and the importance of the coping tiles.
The Court of Appeal found that the plaintiff failed to establish that the council was, or ought reasonably to have been, aware of the literature, and that there was nothing in the literature that would have alerted the council to the increased risk of the track-start dive or coping tiles in any event.
The Court of Appeal also found that pursuant to SU22 of the RLSSA, the absence of any warning sign had no relevance to the plaintiff as a trained competitive swimmer.
The plaintiff’s appeal against the council was dismissed.
The Court of Appeal was critical that the plaintiff made no allegations pursuant to the CLA, such as whether the risk of harm was reasonably foreseeable to the school for the purposes of s 5B of the CLA. The importance of pleadings and submissions was emphasised.
The Court of Appeal found:
Lessons to be learned
This decision demonstrates that even in the event that the plaintiff’s foot was found to have slipped on the tiles whilst attempting to execute a ' track-start' dive, it did not automatically follow that the tiles were defective or unsuitable or that a risk assessment would have identified any risk which could have prevented the incident from occurring. There was also no evidence to suggest that the plaintiff could have been trained to abort a dive gone wrong, or that she would have done so on the day of the incident. Further, just because literature is available that provides commentary and recommendations regarding diving, it does not automatically follow that being aware of the literature could have prevented the incident from occurring.
Public liability insurers ought to consider whether the availability of guidelines and expert opinion, lack of site inspections and risk assessments, and any failure to train is likely to impact whether the incident would have occurred in any event.
Please join us in congratulating Dale Hansen for achieving this prestigious award. Insurance Business Magazine will go to print this month with their top 10 insurance brokers across Australia of which Dale has been included, recognising his commitment to the industry and his business.
The Insurance Business Elite Brokers ranking system is an objective means of ranking the best-performing insurance brokers in the country – not just those with the biggest portfolios or the largest clients.
Of particular interest was a discernible correlation between the level of satisfaction and the depth of the service provided by surveyed clients’ brokers. The Index reports that, generally, the brokers with highly satisfied clients provided service extending beyond the basics. More specifically, it found that brokers with highly satisfied clients were far more likely to provide an in-depth analysis of all of the options available to those clients, and to provide information on changes to insurance and/or regulatory requirements.
The following article reminds us of the importance of making sure we are correctly insured for all aspects of storm damage including flood. Please contact us if you have any concerns about your cover.
The Bureau of Meteorology says there is a 50% chance a La Nina weather system will develop later this year, bringing with it above-average rainfall and the prospect of floods.
The current El Nino continues to weaken, with Pacific Ocean temperatures falling fast, and the likelihood is increasing of it moving straight into the opposite La Nina effect.
While El Nino generally brings drier, warmer conditions to Australia, La Nina is associated with much higher catastrophe losses for insurers.
Five out of eight surveyed models suggest a La Nina is likely, with three neutral, while continuing record Indian Ocean warmth is expected to provide extra moisture for rain systems crossing Australia in the autumn.
However, the bureau warns forecasts at this time of year can be inaccurate, with a clearer picture likely to emerge in coming months.
For Australian consumers who bought Patties brand Nanna’s and Creative Gourmet mixed frozen berries early last year, the risk of hepatitis A also allegedly came with the purchase. The berries were linked with 31 cases of this serious illness and the resulting product recall in February 2015 wiped more than AU$14 million from the annual profits of Patties Foods.
The Patties Foods berry scandal was a warning to all companies to pay closer attention to supply chain quality control. But it also highlighted the serious financial risks associated with product recalls and was a red flag for many companies to consider purchasing product recall insurance.
RECALLS ON THE RISE
The complexities of an increasingly global supply chain, coupled with a tightening of product safety regulations around the world are leading to a rise in product recalls.
In 2014, there were more than 500 product recalls in Australia and this year is already proving to be a busy one. In the first two weeks of 2016 hoverboards, dining chairs and motorcycles were being removed from sale due to dangerous potential faults.
In the US, the National Highway Traffic Safety Administration reported 803 separate vehicle recalls in 2014. In New Zealand, there were 27 food recalls in 2014 compared with 13 the year before. Companies in China carried out 72 consumer product recalls; however, its product recall system covers limited categories and is currently under review in order to enhance customer safety, China Daily says.
It’s not just the lesser-known brands that are suffering recall issues. Leading electrical goods company Samsung is tracking down 144,451 washing machines (with 45,047 currently unaccounted for) that have been responsible for 252 fires and other incidents in Australia since 2013. Supermarkets in New Zealand removed packets of Beehive Shaved Champagne Ham from their shelves in December 2015 over fears they could contain listeria. In the US and Canada, popular label Lululemon recalled 318,000 women’s tops in June 2015 as their elastic drawstrings were deemed at risk of causing harm to wearers. Meanwhile, Volkswagen’s recent and highly publicised recall and refit of 11 million cars worldwide will be among the biggest product recalls in history.
HOW PRODUCT RECALLS WORK
In most cases it is the supplier that initiates a recall (under Australian consumer law ‘suppliers’ include manufacturers, importers, distributors and retailers). They are required to notify in writing the Commonwealth Minister responsible for consumer affairs within two days of initiating the recall. They must cease production and distribution and remove unsafe products from the marketplace. They are also required to notify the public through avenues such as advertising or social media announcements and to inform those within their domestic supply chainn some instances, product recalls are initiated by the Australian Competition and Consumer Commission (ACCC).
“The ACCC can either guide or attempt to convince a supplier that a recall would be desirable,” explains Kieran O’Brien, Partner with law firm DLA Piper. “Of course, there can be situations where the regulator says they are going to institute a direct mandatory recall. That’s rare, but it has the power to do so, and so it should because there can always be an organisation that just doesn’t listen.
“A manufacturer or supplier that allows matters to get to that stage clearly leaves itself open to sanctions down the track."
INSURANCE IN A RECALL CRISIS
For companies not large enough to self-insure, product recall insurance is increasingly viewed as a strategic purchase and a key feature of an overall risk management policy. While public liability insurance covers third-party losses arising from bodily injury or property damage, product recall insurance predominately covers a company’s own losses, including business interruption caused by reputational damage or the loss of gross profits, usually for a period of 12 months.
Product recall insurance also covers the cost of recalling products and may cover rehabilitation expenses, such as the advertising costs associated with restoring consumer confidence and the cost of promotional offers. In most instances, it also includes the cost of crisis consultants and public relations advisers to help mitigate reputational damage associated with product recalls.
Michael Lincoln, Underwriting Manager, Crisis Management Solutions at Liberty International Underwriters, says some product liability insurance products provide product recall extensions. However, he describes them as the “poor cousin” of market-leading Product Recall Insurance. “It may provide either first- or third-party recall costs, but does not cover what is commonly the most expensive parts of a recall, such as replacement costs and business interruption,” he says.
Tony Parington, Director and Underwriter at Sterling Insurance, says coverage largely depends on the circumstances surrounding a product recall. “You have to look at the trigger,” he says. “Imagine if you were to produce bottled water and it’s perfectly safe but the colour of the water was not the prettiest. You want to distribute it all over town but you realise that no one is going to buy it because of the colour. In that scenario, if that water cannot harm anyone and it’s just an aesthetic thing, there’s no claim. That’s a commercial loss to your business.”
ANALYSING THE RISK
Product recall is a risk faced by any company that manufactures, imports or distributes consumable or non-consumable goods. Jae Ramsbotham, Senior Underwriter Crisis Management at AIG, says analysing this risk is a significant task for underwriters. “We need to thoroughly analyse the company’s operations and processes and the exposures pertinent to the industry,” she says.
In assessing the risk, an underwriter generally seeks evidence of a company’s quality assurance programs, including food and site security measures. They will also request documents such as food safety audit reports, recall and business continuity plans and supplier or manufacturer contractual agreements.
“We would then work with the client’s insurance broker to establisha tailored policy that meets the needs of the clients based on the information provided,” says Jae. “An underwriter is charged with finding the very tight balance between client satisfaction, coverage, premium cost and commercially viable terms for all.”
Some product lines are considered high risk. Tony says dairy products often present red flags. “Cheese and dairy products often have a lot of claims and that’s just the nature of the beast,” he says. “You can always argue that there’s never going to be enough premium pool to pay for those claims.”
In some instances, products are simply too difficult to insure for recall. “We get people coming to us [for recall insurance] for building products,” says Tony. “It could be a bolt or a screw that’s used in trucks. The problem in that scenario is how do you recall it? You can only trace it to a certain point.”Tony adds that individual and cites the pigment used to colour red lipsticks, which is often made from crushed cochineal bugs. “If you have that as an ingredient and it was somehow contaminated, how do you recall all of those products?”
TIMING IS EVERYTHING
Insurers stress that clients should inform them as soon as possible in the event of a product recall. “The adverse media coverage that may follow even a single product recall incident poses a significant threat to consumer confidence, hard-won retail space, important contracts, market share and brand credibility,” says Jae.
“Zero risk does not exist,” she adds. “Even the best risk management programs may reduce the likelihood of an incident but do not completely eliminate risk. Accidents do happen and when they occur a company has to be able to manage the consequences.”
SHOULD PRODUCT RECALL INSURANCE BE MANDATORY?
Between 2010 and 2013, up to 40,000 homes across Australia were wired with 4,000km of substandard electrical cables sourced from Infinity Cable Company. With insufficient plastic insulation, the cables are expected to become prematurely brittle, leading to fire and electrocution hazards.
In August 2014, the Infinity cables were recalled by 18 electrical retailers and wholesalers due to safety concerns.
Suresh Manickam, CEO of the National Electrical and Communications Association, says he would like to see an industry push for recall insurance to be a mandatory requirement for wholesalers and distributors in order to protect both contractors and consumers.
“It’s pertinent in our industry because faulty products have the propensity to kill,” he says. “While mandatory recall insurance would certainly address the symptoms, we also need to tackle the root of the problem, which is that products are coming into the country that are not up to Australian standards.
”The owner of Infinity Cable Company currently faces a criminal charge and the company is in liquidation. Meanwhile, the recall is estimated to have cost AU$80 million.
In the last decade and a half, there has been a significant increase in the casualisation of workforces. This has resulted in a blurring of the lines between workers who are truly employees and those who are contractors. Often, these arrangements are not properly documented which can make it difficult to determine whether someone is an employee or a contractor.
This has ramifications for commercial organisations of all sizes and especially their liability insurers as it brings into focus the issue of whether an injury giving rise to a claim should be covered under a liability policy or a statutory workers' compensation policy.
This article examines how it is determined whether someone is an employee or a contractor and which claims are likely to be caught under the workers' compensation policy in Queensland.
Workers' Compensation and Rehabilitation Act
The amendments to the Workers' Compensation and Rehabilitation Act 2003 (Qld) ( WCRA ) in 2013 were most notable for the introduction of the 5% degree of permanent impairment ( DPI ) threshold for access to common law damages. Despite that threshold having recently been repealed, some of the 2013 amendments remain in place. This includes the definition of ' worker', which was essentially restricted so as to no longer include contractors, except in limited circumstances.
Determining whether a claimant is a contractor or an employee is usually uncontroversial. If a claimant is an employee, then the statutory workers' compensation policy will most likely respond. If, on the other hand, the claimant is a contractor, then the public liability policy of the hirer will most likely respond.
There are times, however, when it is unclear whether a claimant is an employee or a contractor. There are also times when a claimant is treated as a contractor when, in fact, he or she is an employee, at least from the perspective of the Australian Tax Office ( ATO ). This has obvious implications for policy response.
Definition of ' worker' Pursuant to s 11 of the WCRA:
(1) A worker is a person who-
(a) works under a contract; and
(b) in relation to the work, is an employee for the purpose of assessment for PAYG withholding under the Taxation Administration Act 1953 (Cth), schedule 1, part 2-5.
(2) Also, schedule 2, part 1 sets out who is a worker in particular circumstances.
(3) However, schedule 2, part 2 sets out who is not a worker in particular circumstances.’
Therefore, subject to schedule 2, there are two limbs that must be satisfied in order for a person to be classified as a ‘worker’ for the purposes of the WCRA:
'Works under a contract'
There is no qualification as to the type of contract that must be performed. Having regard to the ordinary principles of contract law, all that is probably required is that the work be performed in exchange for some form of consideration. There is no requirement that the contract be in writing.
The term ' employee' is not defined in the TAA.
The ATO has released a tax ruling 1 to provide guidance as to who is an employee for the purposes of the TAA. The tax ruling essentially provides that the term ' employee' has its ordinary meaning as defined by the common law.
Consistent with the common law, the tax ruling recognises that parties are free to choose the nature of the contract which they make between themselves. However, their own characterisation of that contract will not be conclusive.
As stated in the tax ruling:
'If the underlying reality of the relationship is one of employment the parties cannot alter that fact by merely having the contract state (or have the worker acknowledge) that the worker's status is that of an independent contractor.' 2
Key indicia of whether a person is an employee or an independent contractor include:
This indicator, which has been referred to as the ' classic test' 3 for determining whether a worker is an employee or an independent contractor, relates to the degree of control exercised over the worker in respect of the work performed.
If, for example, a worker is told what work to perform, how and where to perform the work, and when to perform the work, then this degree of control is indicative of an employer/employee relationship.
While the degree of control probably remains the most significant criterion for determining the nature of the relationship, other factors still need to be taken into account.
Basis of payment
In simple terms, this relates to whether a worker is paid for the time spent performing the work or paid for the results. If a worker is paid on an hourly basis, then this is indicative of an employer/employee relationship. If, on the other hand, a worker is paid for a particular result (for example, the quantity of fruit picked or trees cut) then this is indicative of a principal/contractor relationship.
There can be instances, however, when a worker is paid for achieving specific results but is still an employee. In Hollis v Vabu 4 the High Court considered that payment to the bicycle couriers per delivery, rather than per time period engaged, was a natural means to remunerate employees whose sole purpose is to perform deliveries. 5 This was in the context of other factors which, as a whole, tended to suggest that the workers were employees.
This relates to whether or not the worker has power or authority to delegate the work and pay someone else to perform the work. If a worker has an unlimited power of delegation, then this is indicative of a principal/contractor relationship. 6 If, on the other hand, the worker is required to perform the work personally, then this may be more consistent with an employer/employee relationship.
This relates to who bears the commercial risk arising out of an injury or defect in carrying out the work. In an employer/employee relationship, the employer bears the risk. If, on the other hand, the relationship is such that the worker bears the risk, then this is indicative of a principal/contractor relationship. A contractor will typically take out their own liability insurance in such circumstances.
Provision of tools and equipment
If a worker provides his or her own tools and equipment, then this can be indicative of a principal/contractor relationship. If the business provides the tools and equipment, or, alternatively, pays the worker to provide his or her own tools and equipment, then this is consistent with an employer/employee relationship.
This, however, is not determinative. For example, in Hollis , the workers, whom the High Court determined were employees, supplied their own bicycles and many of their own accessories.
This highlights the fact that it is the 'totality of the relationship' that must be taken into account when determining whether a worker is an employee or a contractor for the purposes of the TAA.
Dispelling the myths
There are several misconceptions relating to the identification of independent contractors. The first is that, if a worker issues invoices for the work he or she is undertaking, then the worker is a contractor. This is not necessarily correct. As discussed, whether or not the worker is a contractor will depend on the characteristics and key indicia of the arrangement.
Another misconception is that, if a contract of engagement specifies that the worker is a contactor, then that is determinative of the nature of the relationship. Again, while relevant, this is not correct for the reasons mentioned.
Finally, if a worker has an ABN, then he or she must be a contractor. Again, this is not necessarily correct.
Employee/contractor decision tool
The ATO website provides useful guidance for assessing whether a worker is an employee or a contractor. This includes an ' employee/contractor decision tool' 7 which allows the user to enter information into an online questionnaire and, based on the responses, will indicate whether the worker is an employee or contactor. While this is not determinative, it is a useful starting point for assessing the relevant relationship.
To illustrate the point, the following is an example of what can happen.
Joe is engaged by Clean Me Pty Ltd to carry out cleaning work in a commercial building. There is no contract of engagement. Joe considers himself to be an independent contractor and issues tax invoices to Clean Me for the work he performs. Clean Me pays the full invoice amount and does not withhold any tax.
Joe is told by Clean Me that he must clean the building between 5am and 7am, Monday to Friday. He is paid on an hourly basis and is provided with the cleaning equipment by Clean Me. Joe is not authorised to delegate the work to anyone else.
Joe suffers an injury during the course of his work and sues Clean Me.
While Joe, on the face of it, appears to be a contractor, on balance he is likely to be an employee for the purposes of the TAA.
Accordingly, Joe is probably a ' worker' for the purposes of the WCRA and the statutory policy will probably respond to the claim.
While ' employee' exclusions in public liability policies differ from policy to policy, the intention generally is that the exclusion will be engaged in circumstances where the workers' compensation policy responds. On that basis, Clean Me’s public liability policy will probably not respond to the claim and dual insurance will not apply.
The key point to remember here is that a 'c ontractor' is not always a contractor, a ' contractor' can sometimes be an employee.
It is important to not take an arrangement between a claimant worker and his or her ' employer' at face value. It is the characteristics of the relationship, not any labels placed on it, or the way in which the parties treat the relationship, that will determine the nature or the relationship.
The starting point for assessing the relationship will often be the contract of engagement.
A failure to properly assess a work relationship may result in a liability policy responding to a claim when, in fact, it ought not to.
TR 2005/16 –
"Income tax: Pay As You Go - withholding from payments to employees."
2 TR 2005/16, para. 18 – referring to Commissioner of State Taxation v The Roy Morgan Research Centre Pty Ltd  SASC 288; 2004 ATC 4933; (2004) 57 ATR 147.
3 See Hollis v Vabu (2001) 207 CLR 21, Stevens v Brodribb Sawmilling Company Pty Ltd (1986) 63 ALR 513 at 525.
4 (2001) 207 CLR 21.
5 Ibid at 44.
6 Stevens v Brodribb Sawmilling Company Pty Ltd (1986) 63 ALR 513 at 517 and 519.
7 https://www.ato.gov.au/Calculators-and-tools/Host/?anchor=ECDTSGET&anchor=ECDTSGET/questions/ECD... .
A new report from the Financial Rights Legal Centre shows claimants routinely find insurance fraud investigations to be lengthy and intimidating and that their guilt is being prejudged.
The Bushfire Building Council of Australia (BBCA) says it is too soon to tell whether homes constructed to “bushfire-proof” standards were among those destroyed in the Christmas Day blaze along Victoria’s Great Ocean Road.
CSIRO is completing a report on the fire that destroyed 116 homes around Wye River and Separation Creek. It will cover the performance of properties built to standards recommended by the 2009 Victorian Bushfires Royal Commission.
While declining to pre-empt the report’s findings, BBCA CEO Kate Cotter admits building a home to approved codes will not always save it.
“Even the best building code will struggle to make a big enough difference at the local level, [depending on conditions],” Ms Cotter told insuranceNEWS.com.au.
“You’ll never be able to design your way out of [a fire like Wye River blaze], but there’s certainly more we can do to make homes safer.”
The CSIRO report will consider whether homes were lost due to a failure of the building codes or non-compliance.
The BBCA has revealed to insuranceNEWS.com.au it expects to release a national ratings system that assesses fire risk at a township level, to ensure local characteristics are factored into fire mitigation for homes and land use.
“If you don’t address bushfire risk on a township-wide basis, it doesn’t matter how much money you throw at building new fire-proof buildings,” Ms Cotter said.
“We know from experience that local issues are not adequately addressed [in planning for bushfires]. In Wye River, for example, new houses built to the latest standards were next door to old houses.”
Ms Cotter believes the BBCA’s rating system will provide communities and local governments with the information needed to adopt localised bushfire risk management strategies.
“A star rating system for townships will give governments the tools to address risk. It will be up to shire councils to decide whether they want to have a go at enforcing standards based on our assessment of local conditions and particular problems associated with each township.”
To compliment the top 5 most common claims, below are some tips on how your small business clients could minimise these incidents occurring to them.
Preventing the top 5 most common claims
There are several simple steps small businesses can take to prevent the top 5 most common claims from happening to them. Below are some tips on how your clients could minimise some of the most common claims.
1. Theft & Burglary
2. Storm Damage
3. Property Damage (Accidental & Malicious)
4. Machinery & Equipment breakdown
5. Liability (Property Damage)
Insurance do’s and don’ts: Check your policy to see you have the cover you need.
You are overseas on a three-month trip of a lifetime and a freak storm wreaks havoc on your home. You didn’t tell your insurer of your travel plans and now you may not be covered for the damage.
You’ve left your work tablet in the back of a cab and the boss says it’s your responsibility to replace it. Will your insurance pay up?
These are just some of the potential scenarios that could cost you thousands or even hundreds of thousands of dollars because you didn’t read the fine print on your general insurance policy.
Failing to understand what you are covered for can have catastrophic consequences for your hip pocket, says Abigail Koch, spokeswoman for comparethemarket.com.au.
"Insurance is not cheap so you really do need to know what you are paying for," she says.
Reading your policy Product Disclosure Statement will take hours of your life you’ll never get back, but it could spare you financial disaster.
If you are away for more than 60 days and you have a break-in or fall foul of a natural disaster, you could run into trouble with your insurer, says Koch.
"You could face a hefty 'unoccupancy excess' when you go to make a claim or find you’re no longer covered," she says.
"For long absences you must let your provider know and make special arrangements to maintain your insurance."
Australian Bureau of Statistics (ABS) figures show 228,900 homes (2.6% of all households) were broken into in 2013/14 with most burglaries happening on a Friday, between 12 and 5pm, according to the NRMA.
GIO spokesman, Stephen Bell, also warns against sharing your holiday plans online as opportunistic thieves often use social media to target victims.
When you are away, you should always recruit a friend or neighbour to keep an eye on your place and collect the mail, cut the lawn and keep up general maintenance so the house doesn’t look unoccupied and to minimise any fire or storm damage risk.
Putting off odd jobs
"In the event of a fire you could have a claim questioned if you have let the maintenance of your home go for a while," says Koch.
Most people know to keep gutters and roofs clear but general upkeep is important.
"Some policies may require you to keep the home/unit and contents well maintained and in good condition. If you don’t meet your responsibilities, they may reduce or refuse to pay your claim or cancel your policy."
Damage from renovation projects can be costly.
Totalling tools of the trade
"If you have a work laptop or phone that you take home, make sure you know what you’re up for if it is stolen or damaged while in your hands," she says.
"You need to check your contents insurance policy and your employment contract whether your employer’s insurance will cover those work items."
Otherwise you could be forking out thousands of your own hard-earned dollars.
If you are renovating then a call to your insurer should be on your checklist.
Some insurance policies specify renovations costing more than $50,000 could affect your legal liability cover — the cover you have in case someone claims compensation against you for injury on your property.
Renovating? Check your liability.
"Claims can run into the hundreds of thousands if someone is injured, or worse, on your property," she says.
"Tell your insurer about a renovation project and increase the value of your home so you are not left in serious debt."
If you decide to splash out on a pool or spa then check your existing policy document. These items may not be included and need separate insurance.
Doing business at home
Most standard homeowner insurance policies do not provide cover for home-based businesses, says Koch.
"Double check if your existing home and contents insurance covers your business activities or employees, suppliers or customers in the event of accident or illness."
Aussies love the outdoors and a boat or caravan on the block is common but be aware of the potential hazards.
'If they’re timber, these items cannot only add to your fire risk but each of them could need separate insurance because they’re often expensive items not covered by a general policy."
Garden furniture, statues and even your gnome collection can be covered for fire damage or theft under most home policies but plants are another matter.
"If your prized Japanese maple or stunning rose garden are pilfered or destroyed by fire they will not be covered by the majority of insurers," says Koch.
"Some premium policies will offer cover but typically only up to a maximum of $2000 — not much when you consider how expensive plants can be."
If you sell products which you store at home, you need to protect your stock or inventory for damage or loss.
"Make sure your insurer can arrange alternative accommodation in the event of fire ... if you’re running a business from home, this could save you money in the long run," she says.
Don’t let the bugs bite
Termites cause around $1.3 billion in repair costs to Aussie homes each year but insurance companies will not cover against pest infestations — handy to know if you just bought your first house.
"Pests cause more damage to homes than natural disaster, theft and burglaries combined and insurance companies do not cover pests," says Koch.
"Prevention treatment is the only way to deal with them."
With the data breach count ticking higher than ever in Australia, it’s clear that cybersecurity is one of the biggest challenges facing businesses today. And with each breach impacting an average of over 20,000 individual records, consumers can no longer turn a blind eye.
Cybercrime does not discriminate. It impacts businesses of all shapes and sizes. But we can identify trends and high-risk sectors that are more likely to attract their attention and efforts.
Here are 4 targets likely to be on the top of hackers’ lists in 2016.
Identity fraud is nothing new, but recent reports suggest that as new technology makes it more difficult to create fake identities, cybercriminals are opting to steal real ones with more tenacity.
The Veda 2015 Cybercrime and Fraud Report found a nearly 60 per cent increase in fraudulent credit applications involving identity takeovers in Australia in the past two years and a 17 per cent increase in the past year. And with each data breach of consumer data, identify theft becomes that much easier.
Your medical records
It may seem unusual for cybercriminals to be interested in what happened during your last doctor’s visit, but healthcare and medical organisations offer a treasure trove of information-rich data. That data, if used in the right way by the wrong people, can be devastating for consumers and businesses. Rumours around the health of the late Steve Jobs caused a sharp fall in Apple stocks and, just recently, it was revealed that Charlie Sheen’s HIV diagnosis was first uncovered in the Sony hack.
But you don’t have to be a celebrity or high-profile target to be a victim of hackers using your highly personal information for their own gain. Just ask any of Ashley Madison’s customers.
Your small business data
Small businesses are particularly vulnerable to cyberattacks. Cyberstorms that many large organisations can weather can easily sink smaller ones. Unfortunately, small businesses looking to optimise their budgets often view robust security solutions as a grudge purchase.
But the most dangerous thing for small business owners to think is: “We’re not big enough for cyber attackers.” Research has found that ransomware attacks are now targeting SMBs due to their more lax security measures and capacity to pay.
Your convenient, cloud-based platforms
Platforms like MyGov offer consumers a convenient way to access government services and information. Using just one login and password, the platform enables you to do everything from filing income taxes or applying for child support to managing your ABN. But this simple, consolidated, solution also creates a honey pot for hackers.
Organisations tasked with safeguarding these types of platforms have to ensure the strictest levels of security, especially in the wake of the recent breach of payroll systems and tax file numbers.
Consumers take a risk every time they trust their personal data to ill-equipped and underprepared businesses, and they’re starting to notice. A recent study found that, when considering new innovations, privacy is now the biggest concern for more than two-thirds of consumers globally.
It’s time for businesses to take action to protect their IP and customer information. Encrypting what you deem most important to your business is a good place to start but even better are solutions that use multilayer encryption with private keys that are owned and managed by the user. It’s all about finding solutions that strike the right balance of security and productivity.
Eric Schwantler is the General Manager of Dekko Secure, which provides complete security and privacy for email, chat and document storage.
The year 2016 marks a forceful departure from past findings, as the risks The Global Risks Report 2016 has highlighted over the past decade are now starting to manifest themselves in new, sometimes unexpected ways with impact to people, institutions and economies.
Now in its 11th edition, The Global Risks Report 2016 draws attention to ways that global risks could evolve and interact in the next decade. The year 2016 marks a forceful departure from past findings, as the risks about which the Report has been warning over the past decade are starting to manifest themselves in new, sometimes unexpected ways and harm people, institutions and economies. Warming climate is likely to raise this year’s temperature to 1° Celsius above the pre-industrial era, 60 million people, equivalent to the world’s 24th largest country and largest number in history, are forcibly displaced, and crimes in cyberspace costs the global economy an estimated US$445 billion, higher than many economies’ national incomes. In this context, the Report calls for action to build resilience – the “resilience imperative” – and identifies practical examples of how it could be done.
It's widely regarded as crucial to the survival of almost any business that suffers a substantial loss but up two-thirds of businesses could be operating without business interruption insurance .
In order to help broker clients appreciate how business interruption cover works and its importance, NIBATV has prepared a short animated video covering the basics.