Business Insurance Blog


How A “Hard Market” Can Affect Your Business Insurance


You may have heard your insurance broker reference the term “hard market” when explaining why your insurance premium has gone up, or why it’s difficult to find cover. Broadly speaking, there are two main factors that are causing insurance premiums to go up:


Falling investment returns:

Historically low interest rates, mean that insurers can no longer rely on investment returns to subsidise under-performing portfolios. Insurers are now focusing on underwriting profitability which means raising premiums, tightening underwriting guidelines and being more selective about risk.


Reduced Capacity:

Due to significant losses in 2018, one of the major market’s insurers access, Lloyds of London, has withdrawn significant capacity from the Australian marketplace. In addition, significant claims across several industries has led to a number of major insurers, Australian and American, retreating completely from hard to place risk while also taking firmer positions on price and capacity.


In a hard market, working with an insurance broker that is experienced and professional is even more paramount. You need a broker who understands the risk appetite and capacity of insurers so that they can negotiate favourable premiums and conditions on your behalf.


At Guard Insurance, we’ve been helping businesses with their insurance needs since 2008. All our insurance brokers are university graduates with years of industry experience. We’ll leverage our product knowledge, market contacts and size to negotiate favourable terms on your behalf.


No matter what you do, or how big or small your business is, talk to us, we’re on your side.


When Can Insurers Reject a Claim

Insurers can reject a claim, if you do not disclose complete and accurate details of your risk.


Recently the Australian Financial Complaints Authority (‘AFCA’) supported an insurers decision to decline a $14k claim because the insured failed to disclose a performance modification to their car.

The cause of the claim was unrelated to the modification and traditionally would be covered under the insurer’s comprehensive policy wording. However, when the insured lodged the claim, the insurer became aware that the car had been fitted with an aftermarket turbo charger which had not been disclosed.

This modification placed the car outside of the insurer’s acceptance criteria and the insurer argued that they would never have accepted the risk had they know about the modification.

On this ground, AFCA found that the insurer was within their right to decline the claim.

Read the full story here


Your Duty of Disclosure

When purchasing or renewing an insurance policy, you have a duty to advise your insurer of anything that you know, or could reasonably be expected to know, that may affect the insurer’s decision to insure you and on what terms.

The key takeaway from the above claim, is that the performance modification had no impact or cause in the accident. The vehicle was stationary at the time of damage. However, due to non-disclosure, the insurer denied the claim.

So, for business owners, when considering your business insurance policy, some of the information you need to disclose accurately and completely include;  

  • All business activities,
  • Annual sales,
  • Industries your business works within,
  • Sites or places that you perform your work,
  • Imports and Exports,
  • Construction of your premises, including any Expanded Polystyrene material.

If you’re a commercial property owner, one of the key disclosures are your tenants. This includes disclosing when the tenancy is vacant as well.

If you’re unsure of what information you need to disclose to your insurer, we highly recommend you discuss the matter in detail with your insurance broker.

For more information, contact us today.


Major Claims Disputes Increasing, Says Law Firm


In an article published today by, law firm Herbert Smith Freehills advised that Disputes over major claims are snowballing as the insurance market continues to harden.

Claims are “more commonly delayed and often disputed” as insurers’ underwriting profit comes under increasing scrutiny as investment returns slow, the law firm says in a review of the last 12 months.

It recommends policyholders give “very careful consideration to their policy wordings at renewal” and arrange the broadest cover available. It also suggests engaging specialist advisers at an early stage.

The report says the market will continue to harden throughout this year as insurers deal with economic slowdown, increased losses from natural disasters such as the recent tragic bushfires, and “shifts in the liability landscape”.

In this hardening insurance market, it’s important to have an insurance broker that’s on your side. One that understands the importance of quality coverage and advice.

The brokers at Guard Insurance are insurance professionals with years of experience managing claims. We work for you and will use our extensive product knowledge and negotiating skills to get you the best possible claim outcome. Contact us today. 


Hail Damage and Insurance Claims


The hailstorms that passed through Canberra, Sydney and Melbourne last week have caused estimated losses of $320 million.

The Insurance Council of Australia (ICA) has declared a catastrophe for the storms, which also brought torrential rain and strong winds in some areas.

Insurers have received more than 29,000 claims so far, with about two-thirds of those for damage to vehicles.

ICA Head of Risk and Operations Karl Sullivan says thousands of additional claims will probably be lodged this week as property owners inspect damage and contact their insurers.

The storms mark the second hailstorm catastrophe to be declared in recent months. Losses from a south-east Queensland event on November 17 had reached $166 million by December 20, with 22,000 claims lodged.

If you live in a suburb that experienced hailstorms, we suggest you engage a contractor to inspect your roof for damage. Tiny hail dents on a metal roof can lead to more significant damage overtime, so it’s advisable to engage your insurer early.

With significant weather events occurring more frequently, it’s worth reviewing your insurance to make sure you have adequate protection for your assets. At Guard Insurance Brokers, we’re happy to review your current insurance policy to make sure you have the right cover in place for your business, commercial property or home. Contact Us today.


Extreme weather risks on the rise! How this may impact insurance premiums


A severe weather report released by IAG and the US National Centre for Atmospheric Research suggests that global warming will result in more extreme weather events in Australia.

Modelling suggests Sydney and Melbourne will most likely be exposed to more intense hailstorms, tropical cyclones will track further south and bushfire risks will increase in most of Australia as the climate warms.

The full report can be found here.

There is also a great article in the Sydney Morning Herald that summaries the findings of this report. You can read the full article here.


So how does this impact your insurance premium?


As an insurance broker, we’re seeing commercial property and business insurance premiums increasing. Over the last year, about a 10% premium increase would be the average.

The insurance companies and underwriting agencies we work with have advised us that higher frequency and larger claims have been one of the driving factors of increasing premiums.

This doesn’t mean you have to simply accept a large premium increase. It’s always worth approaching multiple insurance companies and underwriting agencies to see if there is a better deal out there.

As an insurance broker, we can do this for you. We specialise in business insurance for SME’s and commercial property insurance.

We would love to try and help you reduce your insurance premium. Call us today to discuss.


Cyber Security Tips for SMEs.

Ensure that all antivirus and other security software is up-to-date


Anti-virus software is in a constant battle against evolving malware and cyber threats. As such, they can frequently release software updates.

It’s important to ensure that all computers connecting to your network has the latest version of the software installed to protect against new threats.

An easy way to ensure your anti-virus software is up to date, is to adjust the setting to auto update.


Develop a strong password policy

One of the easiest ways for cyber criminals to access your network is by walking through the virtual “front door” that your employees leave open when using weak passwords.

It’s a good idea to develop and enforce a strong password policy. A strong password will generally contain a mix of letters, numbers and symbols.


Train your team on cyber security

Provide your team with regular training on how to identify fraudulent or suspicious emails. Not clicking links or opening attachments can prevent a potential cyber breach. 

Some simple tips are:


  • If you don’t know who the email has come from, do not clink on any links or open any attachments.
  • If you receive a strange email from someone you do know, call them first to verify the email before clicking on links or opening attachments.
  • Always be careful when downloading anything from the internet. Make sure it’s from a reliable platform.


Update your IT equipment and software

Outdated operating systems and computers can be a risk because they are vulnerable to more sophisticated hacking techniques and newer forms of malware.

It may be a good idea to conduct an IT audit on your hardware and software, so you have a snapshot of your network. You then then create a plan to stay on top of outdated equipment and software.


Create a Cyber Incident Response Plan

Work with your IT contractor to create a response plan to a cyber-attack. Important questions to address in this response plan are;


  • Where is our data backed up to?
  • How frequently is our data backed up?
  • How frequently are we testing to make sure this data is being backed up properly?
  • How do we get our back up data into a new operational environment?
  • How long until the business is back up and operational?
  • What resources maybe required to implement our Response Plan.


Purchase Cyber Insurance

No matter how good your network security is, your business is susceptible to a cyber-attack.

Cyber insurance transfers the financial risk of a cyber attack from your business to the insurer. Generally, cyber insurance policies will pay for;


  • Costs associated with data recovery and decontamination,
  • Incident response and investigation expenses,
  • Loss of business income due to the cyber event,
  • Additional necessary expenses incurred to keep the business up and running,
  • Liability arising from failure to maintain confidential data and / or unauthorized use of your network.
  • Cyber extortion costs, including ransom payments.


Cyber insurance is becoming more affordable, with pricing starting from around $800 pa for a $250,000 limit of indemnity. Please contact us if you would like more information.


Workplace Bullying Can Have Significant Consequences For Your Business.

An ex-Allianz manager has recently won a $1.39m bullying payout from his employer.

Full details of the story can be found in the link below. 

Most SME business owners often overlook the exposure and financial risks associated with failing to provide a safe and fare workplace for their staff. As a business owner, you can’t always monitor management and staff interaction, and as the above article shows, this can leave you exposed to significant legal costs and financial penalties.

Management liability insurance provides a safety net for your business in the event an employee brings a claim again you or a manager for wrongful dismal, workplace bullying, sexual harassment or discrimination. Generally, management liability insurance covers damages, judgments, settlements and defence costs for a range of employment practice violations.


2018 Major Fire Claims by Industry


The graph below is a summary of the 2018 Commercial Property Fire Database compiled by Vero. It only includes losses greater than $50,000 and specifically excludes natural hazard events.


Which industries experience the highest level of fire claims?


Industries that experienced the most claims in 2018 are now going through greater underwriting scrutiny. Insurers are asking a lot more questions around fire safety and for some industries, recycling and waste management, withdrawing from the market all together. 

Insurance premiums for businesses operating in the high fire hazard sectors are also going up considerably.


Graph of Major Fire Claims 2018

How to lower your business insurance premiums?

If you’re concerned about rising insurance premiums or want to make sure you have the right insurance coverage for your business, please give us a call. We specialise in business insurance. We’ll leverage our industry knowledge and market contacts to source a competitive insurance solution for your business. 


Why Are Insurance Premiums Increasing?

There’s no doubt that this year has seen significant increases in insurance premiums. Unfortunately, we expect this trend to continue over the coming 12 months, particularly for home and commercial property owners and business owners.

So why are insurance premiums increasing by so much?


We’ve posed this question to many of the insurance companies we work with and the universal answer is ………

increasing claim costs.


The increased frequency and severity of significant weather events has resulted in increasing claim payouts for insurers. If you reflect on the last 4 months, we’ve had floods in Townville, a cyclone in North Queensland, Bushfires in Eastern Victoria and a huge hail storm that passed through Sydney. According to the Sydney Morning Herald, the insurance bill from this storm alone is nearing $675m. 


Today, independent data released by the Actuaries Institute revealed that the frequency of extreme weather in the country’s worst affected regions has double compared to the long-term average.


You can read the full report here, however, in summary; the evidence suggests we are getting more extreme maximum temperatures, fewer extreme minimum temperatures and more extreme sea level rises. The expectation now is that this pattern will result in more severe weather events. 

Insurers are starting to factor in this ‘new normal’ into their rating models, and this is flowing through to higher insurance premiums.


So, what can you do to reduce your insurance premium?


Shop around. Give us a call and we will gladly review the market to see if we can source you a more competitive insurance solution.

As an insurance broker, we have access to leading Australian insurers and international marketplaces. We will leverage our experience and relationships to negotiate the best outcome for you. 


Why do property owners need public liability insurance?

As a commercial property owner you can be held liability for personal injury to tenants, customers and visitors whilst they are on your property.

Claims can result from:

  • Slips, trips and falls (cracks in pathways, loose carpet, uneven floors, faulty stair rails etc);
  • Poorly maintained or faulty rental appliances and building plant and machinery;
  • Poorly laid out or controlled car parking facilities;
  • Fires and electrical faults caused by poor maintenance or construction,
  • Inadequate cleaning or housekeeping in common areas or wet floors during cleaning operations;
  • Highly polished surfaces;
  • Unmarked plate glass panels (which should be marked with opaque materials or etchings to alert people who might walk into them);
  • Inadequate lighting;
  • Inadequate security arrangements;
  • Inadequate signage and fire protection;
  • Faults in lifts, elevators or escalators;

Below is a link to a real example of a personal injury liability claim occurring at a commercial property. The injured third party was originally awarded a $180,000 settlement, however this was overturned due to good property management practices.

You can manage your liability exposure by outsourcing the management of your property to a licensed property manager or real estate agent. It’s also important to conduct periodic inspections and respond to any maintenance issues or complaints immediately.

If you would like to discuss insurance for your commercial property, please contact us today to speak to one of our specialist property brokers.