Business Insurance Blog

November2019

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.

September2019

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.

July2019

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.

https://www.insurancenews.com.au/local/ex-allianz-manager-wins-1-3-million-bullying-payout 

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.

May2019

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. 

March2019

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. 

November2018

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.  

https://www.msn.com/en-au/news/australia/sydney-grandmother-who-sued-bunnings-has-payout-quashed/ar-AAzyxUo

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.

October2018

Financial Planner charged $1 million for Cybersecurity Weakness.

The Securities and Exchange Commission (SEC) has just announced that a financial advisory firm in the US will pay $1 million to settle charges after weakness in its cybersecurity policies and procedures helped cyber intruders gain access to the personal information of thousands of customers. You can read the full article here.

 

While this charge has been laid against a US firm, in February 2018, similar laws have been introduced in Australia (Notifiable Data Breach Scheme) that can result in significant fines if a company has a data breach.

 

As an industry that provides personal advice, it’s likely that you will be storing sensitive financial and medical information for a number of your clients. This information is valuable to hackers and it’s why we believe there is a very real cyber threat for the financial planning industry.

 

Cyber insurance can help financial planners mitigate against the risk of a breach and potentially a resulting fine since the underwriting process can identify gaps in cyber security plans and operations, in additional to providing financial support and access to specialist privacy lawyers, computer and IT forensic investigators and crisis management teams.

 

No firm is too small or too large to be hacked. The question is, can you afford to be?

 

Cover starts from $900 pa. Call us today to discuss.

October2018

Motor Trades – Can you afford an injury in the workplace?

No matter how hard you’ve tried to create a safe workplace, you still may find yourself facing a workplace injury claim. In a work environment where employees are using tools, operating machinery and moving vehicles, work place injuries are a high risk.

 

As an employer, it’s simply impossible to plan for every possible scenario that could lead to an injury.  However, the onus is on the Employer to create a Safe Workplace. If you fail to do so, you can be investigated and fined by Safe Work Australia.

 

Recently, a business was fined close to $600,000 when two of its employees got into a physical fight.

 

The average Workplace claim can cost your business over $100,000. The legal costs to defend yourself against an investigation can be tens of thousands of dollars.

 

Mistakes can happen, and employees can be injured while at work. Management Liability Insurance is designed to protect you and your business in the event you are investigated or fined due to a workplace injury.

 

Get in touch to find out more about motor trade insurance before it’s too late.

September2018

Common Cyber Scams – Fake Invocies

Have you recently received an email from a supplier requesting payment of an invoice?

It’s good business practice to get in the habit of calling suppliers or known associates to verify BSB and Account number details prior to making a payment. 

Scammers are getting smart and have started using various email scams to convince you to pay a fake or doctored invoice.

Some of these scams include;

  • Posing as an executive staff member and directing you, via email, to make an urgent payment of an attached invoice.
  • Adjusting the payment details on legitimate invoices so the money gets paid into the scammers account instead of your suppliers.

Over the course of this year, the Australian Cybercrime Online Reporting Network have reported that over $22.1m has been transferred from businesses to scammers accounts using some form of  email scam.

Triggers to indicate the email may be a cyber scam

  • BSB and Account details on the invoice are different to what’s in your system.
  • Email address is slightly different to the normal address you have on file. An example may be that the ”.au” is missing from the end of the email.
  • The invoice is not one that you are expecting.

Tips to avoid incurring financial loss to online scammers

  • Always verbally check the BSB and Account number using a trusted phone number. Confirming a change via email is not a secure method of validation.
  • If you don’t know what the invoice is for, call a colleague to verify.

As cyber crime becomes more common, it’s import to consider a cyber insurance policy as an important part of your business insurance program.

August2018

Pitfalls of cash settling an insurance claim!

Before accepting a cash settlement, you should take the time to ask yourself whether this is the right option for you.  While a cash settlement might seem like a good option, there are many risks associated with this decision. Here are some things to consider before cash-settling your insurance claim.

 

Has your insurer offered you a cash settlement for your property insurance claim?  A settlement is a lump sum of money given to you by the insurer to settle whole or part of your claim.

 

Before accepting a cash settlement, you should take the time to ask yourself whether this is the right option for you.  While a cash settlement might seem like a good option, there are many risks in relying on a cash settlement.  Importantly, a cash settlement might cause you to lose certain insurance benefits.  To help you future-proof your entitlement, this article outlines some things you might wish to consider before cash-settling your insurance claim.

 

Price of repair can vary

In a cash settlement, quotes to repair property are fixed to the costs at the time of damage.  If repairs are delayed or take a long time, rising labour and materials costs might significantly raise the actual cost of fixing the property.  Claimants should be aware that their cash settlement entitlement is fixed to the amount of the initial assessment.  If you cash settle the claim, the insurer is not obliged to cover the job at a higher cost.

 

Additional damages

Similarly, the settlement amount will be based on an assessment of the damage caused to the property at the time.  In some circumstances, damages are not always obvious when the damage assessment takes place.  For example, in weather damage claims, an insurer’s assessment might not account for latent mould, or structural damage problems that show up later on.  These issues can cause hundreds of thousands of dollars worth of extra damage.  If you cash settle the claim, the insurer is not obligated to cover these additional costs.

 

Warranties

Once you cash settle an insurance claim, you are no longer covered by the contract of insurance.  Therefore, there is no warranty on any repairs undertaken with the cash settlement sum.  If the repairs are unsatisfactory, or if they have issues in the future, you will need to cover these costs yourself.  There is no option for recourse against the insurer.

 

Temporary accommodation

If you are unable to live in your home while it is being rebuilt or repaired, home insurance policies offer additional cover for temporary accommodation.  A cash settlement will end the claim, so the settlement amount does not include this accommodation cover.  Therefore, if a claim is cash settled, claimants will need to find and pay for their own alternative accommodation arrangements.

 

While a cash settlement might seem like a quick and easy option, it can often disentitle you from claiming for future damage, and leave you out-of-pocket in the long run.  Therefore, you should always make sure to consider your circumstances and weigh up your options before accepting a cash settlement.