A message for the under thirties, from an under thirty.

If you’re like me you’ll be starting to accumulate some really nice things now… you’ve taken that hand me down couch & dining suite that mum and dad gave you to Vinnies, furnished your home with your own pieces – picked and paid for by you, and are feeling a real sense of pride when you step inside your front door.

Buying or Renting it doesn’t matter, you’ve worked hard to get here and you don’t want to have to start from scratch should something disastrous and unexpected happen.  If you were shrewd enough to insure your contents when you were just starting out, kudo’s to you!  Now we need to ask have you reviewed, considered how much more you actually have now, and increased your Sum Insured accordingly?

Remember, this figure needs to be enough to replace everything with brand new items – and let’s face it, you’ve decked out the lounge room, kitchen, family room, bedrooms etc, have new whitegoods, appliances, electricals and all the latest IT gadgets…  the $20,000 odd you had covered a few years ago just won’t be adequate anymore.

So, give yourself a pat on the back for getting this far, consider how much you really don’t want to have to go back to square one, review your contents Sum Insured if you didn’t do so last renewal and let us know if you need to adjust your cover.

Are you sure that this is a genuine redundancy?

We’ve seen a number of cases were a business has “hid” the genuine reason for dismissal under the blanket of a redundancy and this case is a warning to employers to be careful not to attempt to manipulate the redundancy process, when really all they wanted to do was fire someone, but didn’t want to go through the correct process.

Facing a claim for unfair dismissal, the employer told the Federal Court that the reason for dismissing the employee was financial, in that the business was running at a loss and had to make someone redundant to save costs

The Court found that the employee had previously made a complaint of bullying and intimidation against a new boss and argued that the connection between the financial position and the choice of that particular employee was tenuous.

The employer was fined $37,000 and the employee was reinstated to a position where she would not have to report directly to the person, who was the subject of her complaint.

There are specific employment practices insurance policies or management liability policies, which could provide some assistance in these sorts of claims, so make sure you talk to us.

Do you realise you could be signing your life away

A subcontractor won a job to perform work for a builder and as part of the process, was asked to sign a “standard contract”.

What they didn’t realise, was that the contract contained a clause, which required the subcontractor to indemnify the builder for any liability arising in connection with the subcontract.

During the construction an accident occurred and two workers were injured. After claiming under Workers Compensation, WorkCover then sought to recover their costs from the builder, but the builder used the contract to insist that the subcontractor indemnify them.

Although the subcontractor maintained that this was unfair, the Court found that the contract was valid and was ordered to pay $700,000, plus the legal fees. The Liability Policy held by the subcontractor  contained an exclusion (as do almost all policies) which excludes cover which is only assumed by agreement or contract…i.e. if the subcontractor hadn’t signed the indemnity, he would not have been legally liable for the injuries, so his insurer refused to pay.

Unfortunately, not only did the business fail, but the subcontractor lost his house too.

The point to take from this is that although contracts and insurance policies involve the transfer of risk from one party to another, don’t assume that if you accept increased risk, that the Insurer will pick up that increased risk. While some risks can be covered, some are uninsurable, so make sure you talk to us before signing any contract.

Letter of Authority or Letter of Appointment

…which one for what purpose? 

As the dust settles on another financial year it is worth looking at some issues that continue to have an element of confusion for all concerned. One of these is the role of an insurance broker in relation to two widely used industry documents – the letter of appointment and the letter of authority.

The purpose of each is for a consumer to approach another broker to act on their behalf. One form, the letter of authority, is an instruction to make enquiries, while the other, the letter of appointment, is a transfer of business from one brokerage to another. These documents are often confused. Use the wrong one and clients may be under the impression that they are merely seeking an alternative quote, only to find they have transferred their portfolio of business to another broker.

The Letter of Authority is a document that may be used in the following examples: the consumer is looking to get an alternative quote via another broker; or if they would like a broker to make enquiries on their behalf, a situation that may occur during a difficult claim. Its purpose is that the instruction from the client is clear and transparent with all parties. This is important to protect privacy and avoid misrepresentation. The document must be signed by the business owner or appointed authority to do so. At this early stage of a possible new broker/client relationship, the broker is not allowed to receive commissions or fees for their services.

The Letter of Appointment is a document that has a clear intent for another brokerage to take over existing business. It would include claims maintenance and credit control. This document authorises the broker to accept commissions and fees for service within the standards set by AFSL licensing requirements.

Both documents have clear, separate intentions but can cause a great deal of confusion if not used correctly. Please contact your broker for guidance in selecting the appropriate document to suit your needs.

 

Employers’ Rights

WorkCover claims questioned

Employers are sometimes faced with a situation where they disagree with a decision of WorkCover to accept a claim for statutory benefits made by one of their employees who allege that they have been injured during the course of their employment. The employer may disagree with the acceptance of the claim for a variety of reasons, including a belief that the claim is fraudulent or that the injury did not actually occur at work.

Many employers do not appreciate that they have a right to challenge such a decision. If an employer is unhappy with a decision made by WorkCover on a claim they can seek to have the decision reviewed by the Workers’ Compensation Regulator. Conversely, an employee whose claim is rejected can also seek a review of the decision.

The Workers’ Compensation Regulator is a body independent from WorkCover Queensland and is required to impartially review decisions made by WorkCover.

There is no cost involved in having a decision reviewed by the regulator, other than, of course, if the employer chooses to engage legal representatives to assist them with the review application.

Once WorkCover has made a decision on the claim the employer is entitled to ask for written reasons for the decision within 20 days of being notified of the decision.

WorkCover has five business days to supply the employer with the written reasons for the decision. The employer then has 3 months from the date of that letter to apply for a review with the regulator. The employer is entitled to provide the regulator with additional evidence it wishes to rely on in support of the review application.

The regulator has 25 business days to hand down a review decision unless an extension has been agreed upon. The employer has a “right of appearance” on the regulator during the review process, which can either be done in person or over the phone. It is not necessary to have legal representation during the review process.

If either party is unhappy with the ultimate decision of the regulator they can appeal the decision to the Queensland Industrial Relations Commission. The regulator will normally appoint legal representation to defend their decision in the Industrial Relations Commission. Should the worker appeal the review decision the employer needs to apply to the Commission for the right to be heard on the appeal.

Travel Compensation Fund scrapped

Holiday plans at risk

Nothing spoils a holiday more than being stranded following the financial collapse of a travel operator. Until recently, a traveller’s problems with a travel agent or transport operator going belly-up had some protection offered by the Travel Compensation Fund. This government legislated fund compensated travellers if the operator or agent collapsed and failed to account for money paid by you the traveller.

However, this particular safety net is no more. From 30 June 2014 the Travel Compensation Fund is closed. The fund has been replaced with a series of insurance options for the prospective traveller; one of these is ‘end provider insurance’.

Choosing the right cover is important.  A possible complication is that some insurance provider organisations may suggest that two insurance covers are now required – one to cover the usual travel risks and a second to cover insolvency of the travel agent or transport operator.

Not all insurers cover insolvency; in fact some of Australia’s best known travel insurer agencies do not offer this cover so a wise traveller will select a Comprehensive Travel policy that covers both risks.

Check also that your travel policy wording includes insolvency with a limit of at least $10,000 cover for a single traveller or $20,000 cover for a family for the costs that can be incurred in rebooking or cancelling your journey.

Another tip before selecting your transport operator is to check if their name appears on the Travel Insurer’s website which lists airlines that have a history of financial stress. If you purchase an airfare with one of these stressed airlines you are not covered in the event of the airline entering receivership. These lists areregularly updated to reflect the financial status of an airline, either adding or removing airline companies as situations change.

An example was Air Australia / Strategic Airlines which became insolvent in February 2012 when the airline halted all flights and went into administration.

Your insurance broker is best placed to make sure you have the right travel insurance policy and your best chance of having that happy holiday.

 

Third party manufacturers

Pitfalls for Australian suppliers

Australian Consumer Law (ACL) provides a national framework for consumer protection in the supply of goods and services.  Under the ACL, the definition of a “manufacturer” of goods is broader than just the enterprise that makes the goods – it is defined as including a person (includes a company or partnership) who:

  • extracts, grows, produces, processes or assembles goods
  • holds themselves out to the public as the manufacturer of goods
  • allows their name to be applied to goods
  • allows another person to hold them out to the public as a manufacturer
  • imports goods where the actual manufacturer does not have a place of business in Australia at the time of importation

In summary, a company can be liable for defects in goods even if it had no role in their manufacture.

Consumers who suffer loss or damage (includes injuries to persons and economic loss) because of safety defects in a manufacturer’s products can take the manufacturer to court or make a complaint to a consumer protection agency, which may take action on the consumer’s behalf.  A product has a safety defect if its safety is not what the community is generally entitled to expect – this includes how and for what purposes the product has been marketed, its packaging, instructions or warnings about using the product, etc.

Suppliers who import goods should reduce their exposure to product liability action by using responsible and sensible business practices such as:

  • Know your manufacturer: the identity, location, reputation, etc and whether there have been problems with their product in the past.
  • Conduct regular reviews of product designs and production (this may mean regular visits to the manufacturer’s overseas factory).
  • Implement and review quality assurance procedures regularly.
  • Test products regularly to product specifications, ensuring they are always met, including batch testing.
  • Conduct appropriate marketing and keep control over how the goods are presented.
  • Provide clear and thorough user instructions.
  • Where necessary, conduct a quick voluntary recall of any products that are defective or unsafe.

If you have any questions about product liability exposures, please contact your insurance broker for advice.

Aliens, Meerkats or Brokers?

When buying insurance, which way to go?

Whilst it’s true to say that the TV ads of the Direct Insurance Marketers are very ‘catchy’ and ‘humorous’, prospective buyers of these classes of insurance from these vendors should be aware that the product being promoted is actually ‘protection’: protection of the livelihoods, incomes and assets of individuals and businesses. Not something to be treated lightly.

Generally, the Direct Market will promote their offerings on a ‘price’ model and whilst this is always part of any consideration, claims service and Policy Wordings and Conditions are of equal importance.

If only the quality of the coverage provided by the Direct Insurance Marketers was as comprehensive as their advertising campaigns.

This is where an Insurance Broker adds value to the purchasing proposition. The insurance broker’s role is to ‘canvas’ the ‘market’ with a view to obtaining a recommended ‘product’ that is appropriate to the individuals needs, taking into account any specific requirements. Additionally, many brokers are members of insurance Cluster Groups and these have policy wordings that are far superior, and ultimately of more benefit to the buyer, than that of the Direct Insurers.

Why wait in the long queue of a call centre or attempt to navigate the hurdles of a direct seller’s website when a broker can make the transaction a much easier and safer option?

The main point of difference though is at claim time when the consumer is totally ‘on their own’ in respect of Policy interpretation as well as having to arrange and manage the claim from start to finish. Brokers understand and manage claims. It’s what they do. They add to the process rather than detract from it. The broker will advise clients what information is required and then prepare and forward the claim to the insurer. A broker goes in to bat for you and manages the process from start through to settlement while their client can relax knowing he or she is in good hands.

Another major point that a broker offers over the Direct Marketer is the fact that at Renewal / Anniversary of the Policy time, the premiums are market checked to ensure that a client’s existing insurer is still providing the most competitive and comprehensive terms available. When dealing with a Direct Insurer, each year is just like starting over again.

As a client of a broking firm you are also able to access varied other services of your chosen broker.  They have a range of valuable services and offers, available to you, all under the one roof and accessible by one phone call. Over time, clients of brokerages become trusted business partners and friends, thanks to the professional way their insurance business is transacted. To your broker, you are never merely a number.

On balance, when you weigh up the pros and cons of insurance from the Direct Marketer’s call centre or the professional broker alternative, the choice is clear.

Corporate Travel Insurance

…a better way to go

Attention business owners! Did you know that as a director of a registered business entity, a corporate travel policy is valid for both your business and your leisure travel? The cover can also include additional business executives and other employees on the move.

While many entry-level travel insurance policies contain various exclusions that can leave travellers exposed, Corporate Travel products offer comprehensive cover for the business traveller. Depending on the plan and level of cover required, most Corporate Travel Insurance policies will cover you for:

  • Emergency hospital and medical expenses (usually unlimited)
  • Medical repatriation / evacuation
  • Money
  • Replacement of lost travel documents and luggage
  • Accidental death, disability and loss of income
  • Hire car excess
  • Travel disruption, cancellations, loss of deposits
  • Lost, stolen or damaged baggage
  • Kidnap and ransom
  • Personal liability during your travel

A cost effective, single annual policy takes care of all trips by the frequent business traveller, and nominated additional travellers, within the policy period. No longer do you need to think about travel insurance every time you plan a trip. Buy once, then forget it and travel with peace of mind knowing you’re covered for just about any eventuality.

The benefits go well beyond cover offered by a retail or credit card travel policy. As well as the professional service you would expect, there are significant benefits in Corporate Travel cover including coverage for pre-existing conditions and cover for travellers over 65 years of age. Upper age limits vary from underwriter to underwriter

To obtain a quotation or further information on Corporate Travel Insurance, contact your insurance broker account manager.

Broker v Supermarket

Insurance: Why a broker is the best option

There is a significant push on selling insurance products through mainstream retailers. Their foray into insurance is a calculated move that relies heavily on the established reputation of these retailers to provide convenience and savings in commoditised household goods.

It’s a tactic popular with banks as they design products that will try to cater for all financial needs of their customers, and thereby, keep them ‘in house’.

So what’s the difference between insurance brokers and the direct sellers?

Both earn a commission from the placement of cover with the insurer. The product the client receives is only as good as the results when it’s needed at the time of a claim.  The role of the insurance broker is to provide professional, advice-based service that represents the client’s best interests. The broker has a suite of product options available depending on a clients’ circumstances, cover requirements and affordability.

The direct market relies on promoting a cheaper product as the bottom line. This is heavily supported by mass media advertising that keeps the subject matter in their campaigns light on detail and high on entertainment value – think of domesticated aliens, man folding underwear at counter, French girl struggling with Aussie accent, happy customers portrayed by actors etc. The product is deliberately made cheaper by using strict acceptance criteria and restricting policy coverage and benefits.

A recent study by Vero Insurance surveyed business owners as to why they prefer to deal with a broker.  A common theme in the feedback was that a broker would see many claim scenarios and may be able to suggest the most appropriate cover based on previous experiences. This gave business owners more confidence rather than trying to understand the complexities themselves.

An important factor in any insurance buying decision should be how claims are settled.  Brokers often recommend insurers based on their ability to provide excellent claims service.  Insurance contracts and claim settlements can be complex and having professional guidance through the process is invaluable. Policy wordings often have limits, sub limits, conditions and exclusions that can potentially create situations where confusion reigns and the insurance industry is perceived as untrustworthy and deceitful.

The broker has the ability and responsibility to eliminate this confusion and provide the most suitable product for the clients’ needs.

If price is ever the single most important criterion in the insurance buying decision, then there can be benefits in using direct market insurers.  However, always bear in mind that when price is optimised, the quality of cover usually suffers. Cheaper policies have strict acceptance criteria and the retailers’ call centre consultants have scripts to follow.  The highly regimented and efficient transaction process is designed to deal with the large volume of phone calls. Closing the deal is likely to be the number one priority.