Private Clients – HDL Insurance Brokers https://www.hdlbrokers.com.au Insurance Brokers Tue, 18 Jul 2023 09:06:05 +0000 en-AU hourly 1 What the new director ID rules mean for you and your business https://www.hdlbrokers.com.au/what-the-new-director-id-rules-mean-for-you-and-your-business/ Wed, 22 Feb 2023 07:54:00 +0000 https://www.hdlbrokers.com.au/?p=56316

What the new director ID rules mean for you and your business

What the new director ID rules mean for you and your business

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If you’re the director of a company and you have not registered for a director ID, you could risk a penalty of up to $1.1 million.

So, if you’re among the many directors who have not yet registered for their ID, now’s the time.

The Australian Taxation Office has said penalties won’t affect anyone who applied for their director ID before 14 December 2022.

Now every director is required to apply for a director ID under the Corporations Act 2001 (Cth).

You will need to have a myGovID to apply for the director ID, so if you don’t have a myGovID it’s time to get one now.

A director ID is perennial, even if the person:

  • Changes companies.
  • Stops being a director.
  • Changes their name.
  • Moves interstate or overseas.

The director ID will help prevent the use of false or fraudulent director identities and helps the government to take action against illegal activity.

It’s also important so that shareholders, employees, creditors, consumers and know who are the directors of a company.

The 15-digit ID will make it easier for administrators of failed companies to track directors between companies.

It’s also going to help stop ‘phoenixing’. This is when the directors of a failed company start a new company, a phoenix company, to carry on the activities of the previous company, just without the debt of the previous company.

As a company director, you must apply for your director ID yourself, your tax or BAS agent can’t apply for you.

The easiest way to apply for a director ID is through www.abrs.gov.au. The ABRS is a new service the federal government has launched for managing business information. You can also apply for a director ID by filling in paper forms.

Fines Apply

The maximum criminal penalty for not having a director ID when required, or failure to apply for one when directed by the Registrar, is $13,200, with civil penalties extending up to $1.1 million.

Gavan Duffy, Managing Director HDL Insurance Brokers, says in the event a director receives a civil penalty, liability insurance may cover its cost.

“But insurance won’t cover criminal penalties.”

More information

It’s important to ensure you have the right insurance in place if you are a director of a business.

Contact HDL for further information.

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The information provided in this article is of a general nature only and has been prepared without taking into account your individual objectives, financial situation or needs. If you require advice that is tailored to your specific business or individual circumstances, please contact HDL. 

HDL news, updates and publications may contain links to non-HDL websites that are created and controlled by other organisations. We claim no responsibility for the content of any linked website, or any link contained therein. The inclusion of any link does not imply endorsement by HDL, as we have no responsibility for information referenced in material owned and controlled by other parties. HDL strongly encourages you to review any separate terms of use and privacy policies governing use of these third party websites and resources.

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]]> New privacy law sees tougher penalties https://www.hdlbrokers.com.au/new-privacy-law-sees-tougher-penalties/ Sat, 10 Dec 2022 01:35:48 +0000 https://www.hdlbrokers.com.au/?p=56124

New privacy law sees tougher penalties

New privacy law sees tougher penalties

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New privacy law sees tougher penalties and enforcement powers for serious and repeated privacy breaches.

Recent high-profile and large-scale data breaches involving Optus, Medibank Private, MyDeal and others have resulted in the personal information about millions of Australians being compromised. These data breaches may have direct and long-lasting impacts, including financial harm through identity theft or fraud, psychological harm and reputational harm.

This has highlighted the need for more effective safeguards and privacy controls used by organisations. The Privacy Legislation Amendment (Enforcement and Other Measures) Bill 2022 has been introduced to help address this problem and to push businesses to do better when it comes to their privacy, security, and information handling practices.

The recent Optus data breach has been singled out as the largest data breach in Australia’s history due to the sheer number of affected Australians and the extensive kinds of personal information involved. With nearly 10 million affected Australian customers, Optus has advised that the data breach may have exposed its ‘customers’ names, dates of birth, phone numbers, email addresses, and, for a subset of customers, addresses, ID document numbers such as driver’s licence or passport numbers’, as well as Medicare card numbers for a subset of customers.

Major changes

The most major change is the maximum penalty for serious or repeated interferences with the privacy of an individual, which has dramatically increased to reflect the seriousness of privacy compliance and cybersecurity. The amended penalties are:

  • For a person other than a body corporate, $2.5 million (increased from $444,000)
  • For a body corporate, the greater of $50 million, 3 times the value of benefits obtained or attributable to the breach (if quantifiable in court), or 30% of the corporations adjusted turnover in the relevant period (increased from $2.2 million).

The Amendment Act also grants expanded regulatory powers to the OAIC to allow them to better oversee organisation’s procedures for handling data breaches. The OAIC can now:

  • Issue infringement notices for minor instances of non-compliance without relying on criminal prosecution.
  • Require entities to undertake an independent review of practices that are subject to complaints and review the steps taken.
  • Conduct assessments of an entity’s compliance with the Notifiable Data Breaches Scheme even if a data breach has not occurred.
  • Obtain and share information or documentation regarding a breach with the public or enforcement bodies, if deemed in their interest.

The regulations outlined in the Amendment Act apply to all organisations that trade in Australia, not just those that collect or hold private information. The Amendment Act tightens restrictions for overseas companies, by removing the Australian Link requirement under the Australian Privacy Principles. This has made it difficult for overseas companies to avoid complying with Australian privacy laws, simply by being based overseas.

Make sure you are not exposed

To ensure your customers do not experience the costs associated with data leaks, all companies need to have up-to-date data and privacy policies and procedures.

This involves reviewing processes involved in the collection, storage, processing, sharing and destruction of information and data. It is also important that you conduct an audit of all data and controls to ensure all associated third-party risks are being managed effectively. Specifically, it is important to consider:

  • Obtaining cyber insurance
  • Your level of exposure for legislative breaches, if not insured.

More information

Privacy Legislation Amendment (Enforcement and Other Measures) Bill 2022

Contact HDL for further information.

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The information provided in this article is of a general nature only and has been prepared without taking into account your individual objectives, financial situation or needs. If you require advice that is tailored to your specific business or individual circumstances, please contact HDL.  

HDL news, updates and publications may contain links to non-HDL websites that are created and controlled by other organisations. We claim no responsibility for the content of any linked website, or any link contained therein. The inclusion of any link does not imply endorsement by HDL, as we have no responsibility for information referenced in material owned and controlled by other parties. HDL strongly encourages you to review any separate terms of use and privacy policies governing use of these third party websites and resources.

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]]> Understanding Contractual Liability and Insurance Clauses https://www.hdlbrokers.com.au/understanding-contractual-liability-and-insurance-clauses/ Fri, 08 Oct 2021 08:16:00 +0000 http://101.0.65.174/~hdlbrokerscom/?p=50756

Understanding Contractual Liability and Insurance Clauses

Understanding Contractual Liability and Insurance Clauses

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Understanding Contractual Liability and Insurance Clauses

Download a copy of “Understanding Contractual Liability and Insurance Clauses”

It is common for commercial contracts to be used by the parties to allocate and transfer risk.

Such contracts frequently include mechanisms of allocating or altering risk, by which one party (e.g. principal) seeks to transfer all or part of their liability to another party (e.g. contractor).

The most common types of clauses include:

  • clauses which impose a higher standard of care or a more onerous measure of damage
  • indemnity clauses which require one party to pay the liabilities, costs, expenses and loss of the other party arising from the performance of the contract
  • releases by which one party agrees to release the other party (invariably the principal) from liability

It is also common for commercial contracts to contain insurance clauses which require one party to arrange a specified type and level of insurance in respect of obligations connected with the contract. Often such clauses will require that the cover extends to certain obligations of the principal, head contractors, subcontractors and others.

It is important to understand these clauses and their interaction with each other when assessing your insurance needs. You should provide copies of all relevant contracts to HDL as your insurance broker to enable us to help ensure that cover is obtained which meets your insurance obligations and, to the extent possible, your contractual liabilities.

To the extent that cover is not available, you should be clear about the risk that you are undertaking by entering into the contract.

Purpose of the following information

The following information is intended to highlight the areas of risk and potential pitfalls that are identifiable before you enter into a commercial contract, and which should be identified to help ensure appropriate insurance cover is obtained.

It is critical that these are clearly identified to:

  • provide you with an opportunity to negotiate changes to the contract
  • enable you to instruct your broker to arrange cover for any contractual exposures which remain after negotiation
  • where cover is not reasonably available (i.e. not available at a price you are prepared to pay), allow you to make a fully informed decision as to the contractual risk which you are taking on.

The following information aims to provide the basic knowledge and tools to assist in understanding contractual liability and insurance clauses, which you will need to navigate through and make commercial decisions to address these issues. It is not intended to be definitive given the broad and complex nature of these types of contracts and area of law.

If you are uncertain about the meaning or effect of the liability or insurance provisions contained in any contract you are considering entering into, or have already entered into, you should seek legal advice. Your HDL broking team can advise you in relation to the ability of your insurance program to satisfy insurance clauses or cover the professional services provided but cannot provide you with legal advice about contractual clauses.

Where required, HDL can provide our clients with access to a complimentary one hour Contractual Liability Contract Review service provided by an outsourced legal firm.

Contractual Obligations to Insure

What is an insurance clause?

An insurance clause is an obligation under a contract where one party agrees to obtain insurance on the terms specified in the contract, which may include a requirement to obtain insurance that provides cover for another party (for example the principal, head contractors and sub-contractors). The scope of cover required to be obtained will depend on the specific wording.

Depending on the type of contract, such clauses may require a number of different types of insurance to be taken out including public liability, product liability, professional indemnity, motor vehicle, plant and equipment, transit insurance etc. It is also common for these clauses to specify requirements for sums insured and duration of cover.

Other stipulations commonly found in insurance clauses include that:

  • the insurance is placed with a ‘substantial’ or ‘reputable’ insurer or an insurer of ‘good standing’
  • the insurer has a specified credit rating
  • certificates of insurance be provided to the other party as proof that the cover is in place
  • notice be given in the event of the insurance not being renewed or being cancelled
  • the party arranging the insurance not do anything which would prejudice, vitiate or render the insurance void or voidable

An example of an insurance clause is:

Insurance

The Contractor must effect insurance policies that provide the following cover:

  1. public liability insurance with an indemnity of at least $20,000,000 in respect of each claim;
  2. product liability insurance with an indemnity of at least $20,000,000 in the aggregate for the period of cover; and
  3. workers’ compensation insurance in accordance with applicable legislation.

The Contractor must maintain the coverage required under this clause during the Contract Period.

Failure to arrange required insurance

It is common for commercial contracts to require a party (for example, a contractor) to obtain insurance policies which provide cover for the loss or liability of the other party (for example, the principal) and/or others, arising out of the performance or non-performance by the contractor of its contractual obligations.

Where the contractor fails to arrange such insurance, in the event that the principal suffers a loss, or a claim is made against the principal, which would have been covered by such insurance, the contractor will likely face a claim for breach of contract.

The measure of damages recoverable for a breach of the obligation to insure, or adequately insure, will usually be equivalent to the amount of the indemnity which would have been payable under the policy which was required to be obtained.

Interaction of insurance and indemnity clauses, and breach of contract claims

In the event of a dispute as to whether a party has an obligation to obtain insurance for the benefit of another party, or is in breach of contract for failing to obtain certain insurance(s), or has agreed to indemnify another party for its liability arising from the performance of the contract, a court will closely scrutinise the obligation to insure clauses together with any indemnity clauses in the contract, to determine the nature and extent of any agreement between the parties which may transfer liability from one to another, and whether there has been any breach of contract.

Instructing your HDL broking team

You should provide your HDL broking team with copies of all commercial contracts, so that they can review any obligation to insure clauses and ensure that all required insurances have been placed. Where such insurances are not in place, or do not meet any of the other stipulated requirements, then they may be able to assist you to source appropriate cover (by obtaining additional policies or arranging to have policies endorsed). However, your HDL broking team can only do so if they receive accurate instructions about all such contracts. 

Liability Clauses

The nature and effect of each of these common forms of liability clauses are set out in this table:

Clauses which impose a higher standard of care

  • These most often appear in contracts where a party agrees or warrants that the relevant goods or services will meet a particular standard
  • Raise potential problems where the agreed standard exceeds the standard of care which would otherwise be required by law
  • For example, a warranty to perform services to the ‘highest professional standard’

 

Clauses imposing a higher measure of damages

The most common form of such clauses:

  • indemnify the other party for losses which would otherwise be regarded as unforeseeable or too remote to be recoverable by law
  • require the payment of liquidated damages
  • agree to pay legal costs on a solicitor/client or indemnity basis

 

Indemnities

  • A contractual indemnity is an obligation under a contract where one party has agreed to indemnify another party in relation to liability, loss, damage, costs and expenses in connection with the performance of the contract
  • Indemnity clauses can vary from reflecting the common law position, to being extremely broad and taking the form of a ‘hold harmless’ clause where one party agrees to indemnify the other party irrespective of fault, and in the absence with a reasonable connection with the performance of the contract

 

Releases

  • A clause by which one party agrees to release the other party (invariably the principal), and sometimes other nominated persons, from liability which such party(s) would have had to the first party by law in the absence of such contractual release

The above liability clause types create the potential of uninsured risk where they:

  • impose a liability which is greater than would have existed in the absence of those clauses; and
  • prevent you from recovering from a third party (e.g. a principal or head contractor) where those parties would usually be liable to contribute to your liability.

Interaction with insurance policies

The reason insurance obligations and liability clauses are problematic is that:

  • most liability insurance policies will contain contractual liability exclusions which exclude liability incurred by the insured pursuant to a contract to the extent that such liability is greater than would have existed in the absence of the contract;
  • most liability and property policies will exclude cover where the insured has agreed to release or otherwise waive its rights to recover its liability of loss from a third party; and
  • most liability and property policies will exclude the insured’s failure to insure property.

The scope of such contractual liability exclusions varies between different types of policies and different insurers. An example of such an exclusion from a Public and Products Liability policy from a major insurer is:

Contractual Liability

Any liability assumed under a contract that requires You to effect insurance over property or to be liable for Personal Injury or Property Damage regardless of fault, except where:

  1. that liability would otherwise exist at law in the absence of the contract; or
  2. the contract is an Incidental Contract and the liability does not arise by reason of an obligation to insure a leased property or an obligation to indemnify a landlord irrespective of fault.

Liability policies may contain limited exceptions to the operation of the contractual liability exclusion as shown in the above example. Your Steadfast broker can assist you to find a policy suitable for your needs.

Most property and liability policies will also include ‘waiver of liability’ or ‘waiver of subrogation’ exclusions which will operate to exclude liability to the insured where they have either released or limited their rights to recover loss or damage from third parties (thereby interfering with the insurer’s rights of subrogation). For example:

Subrogation – Preventing Our Right to Recovery

If You have agreed not to seek compensation from another person who is liable to compensate You for any Loss, Damage or liability which is Covered under this Policy We may not Cover You under this Policy for that Loss, Damage or liability.

Proportionate Liability

Proportionate liability legislation applies in all states and territories of Australia and provides that, subject to some exceptions (most notably, personal injury claims), defendants are only liable for their portion of liability for the plaintiff’s loss and damage. It operates to prevent a defendant from being required to bear any liability greater than its relative share of responsibility for a plaintiff’s loss having regard to other persons who are also responsible for the same loss (referred to as ‘concurrent wrongdoers’).

The practical effect of the legislation is that a defendant is not required to seek contribution from other concurrent wrongdoers and, where such other concurrent wrongdoers are impecunious, the defendant is not left to bear their share of the loss.

Some states (NSW, WA and Tasmania) allow parties to contract out of proportionate liability legislation. You should carefully consider if your contracts contain any indemnity clauses or other provisions which would have the effect of contracting out of the applicable proportionate liability legislation as this could increase your liability exposure beyond that which would otherwise apply by law and therefore give rise to the application of contractual liability exclusions.

Unfair Contract Terms Legislation

Unfair contract terms legislation may be available to provide relief to parties from the operation of unfair contract terms contained in contracts for the supply of goods or services where:

  • the contract is a ‘Standard Form’ contract (being a contract which is: drafted by the other party; not subject to negotiations between the parties; and where the party which did not prepare the contract has no real bargaining power);
  • the contract is entered into by a small business, (who employs less than 20 people); and
  • the ‘upfront price’ of the contract does not exceed $300,000 per annum, or does not exceed $1 million if the contract runs for longer than 1 year.

Where the unfair contract terms legislation applies, a party may apply to a court to have a term declared void where the term in ‘unfair’ in the sense that it:

  • would cause an imbalance in the parties’ rights and obligations under the contract;
  • is not reasonably necessary to protect the legitimate interests of the party benefiting from the term; and
  • would cause detriment to a party if it were to be relied upon

If you fit the above criteria and find that the party with whom you are negotiating a contract is unwilling to negotiate any of the terms in the contract, then you may be protected by the ‘unfair contract terms’ legislation from onerous or one-sided clauses, depending on the nature of the businesses involved and the precise terms of the contract. Recourse to this legislation should, however, be regarded as a ‘last line of defence’.

Contact HDL and discover how we can assist you

If you are uncertain about the meaning or effect of the liability or insurance provisions contained in any contract you are considering entering into, or have already entered into, you should discuss with your HDL broking team who can guide you in understanding contractual liability and insurance clauses

HDL can advise you in relation to the ability of your insurance program to satisfy insurance clauses or cover the professional services provided but cannot provide you with legal advice about contractual clauses.

However where required, HDL can provide our clients with access to a complimentary one hour Contractual Liability Contract Review service provided by an outsourced legal firm.

Contact HDL for further information about Understanding Contractual Liability and Insurance Clauses.

Download a copy of “Understanding Contractual Liability and Insurance Clauses”

This  “Understanding Contractual Liability and Insurance Clauses” information has been created for educational purposes and does not take into account specific individual circumstances. The information does not constitute legal advice. Professional legal advice should be sought before acting or relying upon this information.  A series of videos focusing on issues in contractual liability prepared by Meridian Lawyers can be accessed here.
Understanding Contractual Liability and Insurance Clauses

Download a copy of “Understanding Contractual Liability and Insurance Clauses”

Understanding Contractual Liability and Insurance Clauses


Checklist

Contractual Liabilities

  • Have you accepted additional liability risk under the contract?

  • Consider terms affecting:
    - Standard of Care
    - Indemnities
    - Releases
    - Liquidated damages

Can these be addressed through negotiation or your insurance program?

Insurance Obligations

  • Do you understand contractual insurance obligations?

  • Have you asked your HDL broking team to obtain insurance that complies with those obligations?

Contact us for more information on Understanding Contractual Liability and Insurance Clauses.

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The information provided in this article “Understanding Contractual Liability and Insurance Clauses” is of a general nature only and has been prepared without taking into account your individual objectives, financial situation or needs. If you require advice that is tailored to your specific business or individual circumstances, please contact HDL.

HDL news, updates and publications may contain links to non-HDL websites that are created and controlled by other organisations. We claim no responsibility for the content of any linked website, or any link contained therein. The inclusion of any link does not imply endorsement by HDL, as we have no responsibility for information referenced in material owned and controlled by other parties. HDL strongly encourages you to review any separate terms of use and privacy policies governing use of these third party websites and resources.

Find this article helpful? Click on one of the links below to share the content.

]]> Staying afloat in the event of a flood https://www.hdlbrokers.com.au/staying-afloat-in-the-event-of-a-flood/ Sun, 20 Jun 2021 04:35:31 +0000 https://www.hdlbrokers.com.au/?p=41451

Staying afloat in the event of a flood

Staying afloat in the event of a flood

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Arriving in March, La Nina hit communities in eastern Australia with ferocity.

The weather event was anticipated by forecasters and saw non-stop heavy rain across New South Wales and southeast Queensland. As the situation worsened and intense flooding ensued, thousands were evacuated from their homes.

While recovery efforts were underway, for many households and businesses, the future is uncertain. After being severely impacted, they are eager to get back on their feet, but if they have no flood cover behind them, it’s an uphill battle.

It was the 2011 Brisbane floods that first led insurers to adopt a standard definition of flood, which could be understood by both brokers and consumers. Even so, in the event of a flood, the wider community is often still perplexed about what the term means for risk protection, particularly those in high-risk areas.

Unless the customer chooses to go without, standard home insurance policies now routinely include flood cover. However, commercial policies are different in that the insured must usually opt-in for the inclusion of flood cover.

Most commonly, those that decide against getting flood cover do so to save on costs. This appears harmless, until the day comes when they need to make a claim. The recent flood disaster in Queensland and New South Wales has shown the true risk of going without such protection.

If a business or home floods, the cumulative cost of annual insurance premiums likely wouldn’t come close to that of repairing the damage caused.

At first glance, flood insurance may not stand out as an affordable option. But this premium takes into account the very high costs endured by insurers when funding the restoration of a home or business after flooding.

As defined by the insurance industry, flood is 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.”

There is different cover available for flood damage, storm damage and rainwater damage. Being covered in one area doesn’t necessarily mean you’ll be protected against the fallout that follows severe weather events of this nature.

It’s important to fully understand what is covered under your policy, and what isn’t. Being prepared is the key to keeping your business afloat in the months after a flooding disaster by rectifying any damage.

When the unexpected happens, HDL is here to help.

If you’ve been impacted by flood damage, it is a stressful time and we are here to help.

Our highly experienced team will be by your side to help make the claims process as smooth as possible. We will work with the insurer on your behalf to ensure you receive your full entitlement without delay.

If you have had a claim, or If you would like to discuss flood cover and what this could mean to you, contact us.

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The information provided in this article is of a general nature only and has been prepared without taking into account your individual objectives, financial situation or needs. If you require advice that is tailored to your specific business or individual circumstances, please contact HDL.

HDL news, updates and publications may contain links to non-HDL websites that are created and controlled by other organisations. We claim no responsibility for the content of any linked website, or any link contained therein. The inclusion of any link does not imply endorsement by HDL, as we have no responsibility for information referenced in material owned and controlled by other parties. HDL strongly encourages you to review any separate terms of use and privacy policies governing use of these third party websites and resources.

Find this article helpful? Click on one of the links below to share the content.

]]> How has the pandemic impacted claims management practices? https://www.hdlbrokers.com.au/how-has-the-pandemic-impacted-claims-management-practices/ Sun, 20 Jun 2021 02:09:44 +0000 https://www.hdlbrokers.com.au/?p=41399

How has the pandemic impacted claims management practices?

How has the pandemic impacted claims management practices?

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The COVID-19 pandemic has triggered some long-lasting changes to the insurance industry as we know it.

Challenges have come from all directions. The industry has been tasked with dealing with one of the most systemic loss-driving events of the past century, while at the same time trying to maintain the long-term sustainability of the industry amid a sustained low interest rate environment and a fast-changing risk landscape, dominated by increasingly intangible risks.

Insurers are challenged with balancing cost efficiencies and meeting evolving customer expectations. They’re having to walk the fine line between automation and expertise in their interaction with customers, in their risk selection and underwriting processes, and in their claims management practices. And at the same time, they’re under pressure to implement corporate social responsibility (CSR) initiatives, and to engage with communities in a more holistic manner.

A lot of these trends were around prior to COVID-19, but many have been exacerbated by the pandemic-driven shift towards a digital economy. In the claims management space, for example, there is now an exponential reliance on technology.

The pandemic has accelerated a shift in consumption patterns in which people expect easier access and more tailored service from their insurance providers, both at the onset of their insurance journey and on the back-end should they experience a claim.

As a result, there has been an acceleration of the adoption of automation in the claims management process, to simplify and improve the customer experience and to reduce costs.

 

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The information provided in this article is of a general nature only and has been prepared without taking into account your individual objectives, financial situation or needs. If you require advice that is tailored to your specific business or individual circumstances, please contact HDL.

HDL news, updates and publications may contain links to non-HDL websites that are created and controlled by other organisations. We claim no responsibility for the content of any linked website, or any link contained therein. The inclusion of any link does not imply endorsement by HDL, as we have no responsibility for information referenced in material owned and controlled by other parties. HDL strongly encourages you to review any separate terms of use and privacy policies governing use of these third party websites and resources.

Find this article helpful? Click on one of the links below to share the content.

]]> Kidnapping and extortion: how does insurance work? https://www.hdlbrokers.com.au/kidnapping-and-extortion-how-does-insurance-work/ Fri, 04 Jun 2021 05:39:00 +0000 http://101.0.65.174/~hdlbrokerscom/?p=44084

Kidnapping and extortion: how does insurance work?

Kidnapping and extortion: how does insurance work?

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While relatively rare in Australia, when someone is kidnapped or detained, it hits the headlines for all the wrong reasons.

For instance, few will forget the so-called ‘Mosman bomb hoax’ in 2011, when an apparent collar bomb and letter demanding money was placed around school girl Madeleine Pulver’s neck. The man responsible carried out the crime to intimidate the victim’s father. The bomb was later found to be fake.

While this is an extreme example, in the past, there have been other instances of Australian executives being extorted or kidnapped in remote parts of the world. One source estimates there are about 15,000 kidnappings every year, with about US$500 million paid out in ransoms.

Many Australian businesses, for instance mining and resources, engineering and consulting firms, have staff either living in high-risk locations overseas or travelling to high-risk locations. It’s important for these firms to have kidnapping and extortion cover in place to help protect staff and so in the event the worst happens, they have resources to secure a positive outcome.

This type of insurance can provide protection against financial losses incurred when someone covered by the policy is kidnapped, extorted or illegally detained, either in Australia or overseas. It gives businesses with staff located in risky places peace of mind their staff will in the best possible hands should they be held against their will or extorted.

Kidnap and ransom insurance is typically an add-on to management liability insurance and whilst they do cover the cost of a ransom, what you are really buying when you take out this insurance is access to people whose expertise is being able to deal with the people who have kidnapped you to try to get you released, which is a highly-specialised skill.

So if you’re taking out kidnapping and ransom insurance, be sure to check how much cover the policy includes for specialised negotiators. It’s also a good idea to do some due diligence on the consultants the insurer employs to negotiate the release of hostages.

Find out about their experience successfully negotiating the release of hostages and also whether they have been able to secure the release of hostages without the need to pay a ransom.

Additionally, some policies will have exclusions for the very countries in which it’s advisable to have kidnapping insurance. These may include hot spots such as Algeria, Colombia, Georgia, India, Indonesia, Iraq, Israel, Malaysia, Pakistan, Peru, the Philippines, Russia, Sri Lanka, Tajikistan, Haiti and Iran.

If you’re taking out this type of insurance, make sure the countries where staff are located or travelling are covered by the policy.

The Australian federal government’s Smart Traveller website has lots of information about how to keep staff safe while they are working abroad. It recommends taking steps such as researching the destination, having a detailed emergency response plan and putting in place personal security to ensure staff are protected no matter where they are working.

Businesses have a duty of care to ensure their staff are safe at all times. If you have staff located overseas, ensure you have put in place steps to reduce the risks they face and support them to come home safe every day.

Policy coverage available

Kidnap and Ransom Cover

You’re covered whether a person is actually abducted or a ransom was paid in the belief that a person had been taken. In addition to covering the cost of the ransom payment, some insurers also cover the interest costs for a loan taken to pay the ransom or extortion payment.

Extortion Cover

This covers threats to:

  • Do bodily harm to an employee as well as his/her family which is politically motivated
  • Cause damage to any premises or tangible property located on the company’s premises
  • Contaminate the products manufactured or distributed by the company
  • Disseminate, divulge or utilise the company’s proprietary information

Lost Ransom Cover

Covers money or other conveyed property used to pay a ransom or extortion demand.

Expenses

The aim at all times is the safe return of a kidnap victim, coverage extensions should be incorporated for expenses and legal costs incurred to achieve the release of a hostage. These may include independent negotiators’ fees, interest on loans taken out for a ransom payment, salary continuation, consequential personal financial loss and reasonable medical expenses.

Security Consultants

Specialist insurers can provide security consultants from selected security firms, to assist in negotiating an employee’s safe return. While it isn’t mandatory to use a specific firm, early involvement of an experienced security consultant can often mean the quick return of a victim at a reasonable cost.

Legal Liability Cover

This will protect your company in the event it’s deemed to be negligent in hostage retrieval.

How can HDL Help?

With a 100% increase in kidnapping over the last six years, kidnapping has become a fact of life in many parts of the world.

HDL can help protect you with appropriately designed Kidnap, Ransom & Extortion Insurance protection.

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The information provided in this article is of a general nature only and has been prepared without taking into account your individual objectives, financial situation or needs. If you require advice that is tailored to your specific business or individual circumstances, please contact HDL.

HDL news, updates and publications may contain links to non-HDL websites that are created and controlled by other organisations. We claim no responsibility for the content of any linked website, or any link contained therein. The inclusion of any link does not imply endorsement by HDL, as we have no responsibility for information referenced in material owned and controlled by other parties. HDL strongly encourages you to review any separate terms of use and privacy policies governing use of these third party websites and resources.

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]]> For every damaged home, there’s a family or a story behind that https://www.hdlbrokers.com.au/for-every-damaged-home-theres-a-family-or-a-story-behind-that-2/ Wed, 19 May 2021 03:37:00 +0000 http://101.0.65.174/~hdlbrokerscom/?p=42153

For every damaged home, there’s a family or a story behind that

For every damaged home, there’s a family or a story behind that

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Scott Cooper (pictured) is only on his fifth week at insurance repair specialist Construct Services, and already the newly hired catastrophe & events manager has imbibed the company’s ‘we look after people, not just claims’ philosophy.

Speaking with Insurance Business, the Zurich and Suncorp alumnus said of his career shift: “It’s been a really interesting transition from working in a major insurer to coming to this side of the fence and looking at working in a supplier relationship back to those insurers now.”

“I’ve identified the things that I valued most when I worked with [Suncorp], and I’m honing in on those things now and tweaking some of them to just separate out Construct Services a little bit further from the pack,” noted Cooper. “So, really good complementary skill sets in terms of having had that same customer focus that a large insurer has, I find that here at Construct.

“We’re about looking after people, not just about claims. As a consequence of that, that really resonates with my personal value set as well. I do catastrophe work because I find that it gives me the greatest ability to impact the largest number of people and to lift them up after something that’s genuinely pretty harrowing that they’ve been through.”

Hitting the ground running, the catastrophe & events manager was recently on-site in Kalbarri and Geraldton as part of the company’s Cyclone Seroja response. Cooper shared that they’re done with the assessment stage and are now moving into the recovery phase, with Construct Services working with partners to get repairs underway.

“The recovery phase is all about making sure that we know what works are required for each individual property,” explained Cooper, who is “thrilled” to be onboard. “So, there’s a role in project management around getting the various trades in to start doing that work; it’s around working with our client insurers and our client loss adjusters and the brokers to keep everybody in the loop.

“It’s about maintaining connection with individual customers and making sure that they’re aware of the progress of repairs, and I think by and large it becomes a really important communication role. But the second part of my role here is to build out the best catastrophe response team across Australia. That’s the challenge that’s ahead of me at the moment.”

He went on to highlight: “There is a great team of people already here at Construct, and we’re leveraging those guys to do that work with us at this point in time, but my future focus is on being able to have a guaranteed capacity to ensure that we’ve got service levels that our clients can rely upon, being strong on response times.”

One of the things Cooper is thankful for is the national builder’s loyal, strong, and high-calibre trade base, which he said gives Construct Services “great confidence” in delivering a first-class claims outcome. He also drew attention to the longevity of the business, which has been responding to insurers, loss adjusters, brokers, underwriting agencies, and customers and their communities for over 30 years now.

“I think that the trade base that we have at our disposal has meant that we’ve been able to respond to events and catastrophes on both sides of this country,” added Cooper, whose general insurance experience spans more than two decades.

“At various different times where communities have been in lockdown or travelling between states has been difficult, being able to have a workforce in every state and being able to have a team of various tradespeople to work with, has enabled us to keep on with the ability of repairing homes even in difficult circumstances.”

As for the timeline of Seroja repairs, he stressed that just as the damage to properties varies, repair times will vary as well. Naturally, properties that were more catastrophically impacted will take longer to repair, and Cooper said the work has already started on those.

“The opportunity is being able to get people back into their homes, get repairs finished, and get repairs to businesses completed so that they are back up and running,” noted the sector stalwart.

“When I was first starting to talk to Construct Services, I was quite taken with their culture and their values, and I could see myself working here. I’ve got some good ideas around where I think we can differentiate ourselves in the market, and I’m thrilled to bring those to life.”

Cooper added that, amid climate change, we’re not about to see fewer catastrophic events but instead are going to witness not only a higher frequency but also an increased severity when it comes to catastrophes.

“In the last, say, five years I have really drilled into and decided that my future is in catastrophe management,” he declared. “So, I really pursued this as where I’m taking my career – and this is where I intend to specialise, to help communities get back on their feet. I really am passionate about this, and I’m fortunate that I’ve been able to work with some really strong people in the industry.

“And the fact that my values align so well to the values that Construct Services was sharing with me – this entire view of looking after people, not just claims – is so important. We can repair homes, but it’s the way in which we take care and make sure that we do as much as we can to eliminate the stress from the customer on behalf of insurers and loss adjusters, that’s what I’m most proud of.”

Cooper, who spent years in event response in his previous capacity, went on to tell Insurance Business: “For every damaged home, there’s a family or a story behind that, and we have to honour that. These customers didn’t ask for this to happen to their community. And I find this work to be so valuable and fulfilling for me because it gives me that ability to uplift not just that individual customer but the community that they live and work in as well.”

Provided by Insurance Business Australia

The above article was written by Insurance Business Australia.

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The information provided in this article is of a general nature only and has been prepared without taking into account your individual objectives, financial situation or needs. If you require advice that is tailored to your specific business or individual circumstances, please contact HDL.

HDL news, updates and publications may contain links to non-HDL websites that are created and controlled by other organisations. We claim no responsibility for the content of any linked website, or any link contained therein. The inclusion of any link does not imply endorsement by HDL, as we have no responsibility for information referenced in material owned and controlled by other parties. HDL strongly encourages you to review any separate terms of use and privacy policies governing use of these third party websites and resources.

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]]> Budget backs reinsurance pool https://www.hdlbrokers.com.au/budget-backs-reinsurance-pool/ Tue, 18 May 2021 06:04:00 +0000 http://101.0.65.174/~hdlbrokerscom/?p=42219

Budget backs reinsurance pool

Budget backs reinsurance pool

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The Federal Budget has allocated funding to support development of a reinsurance pool for Northern Australia as part of measures to improve cover affordability in the region and has included increased mitigation spending to boost natural disaster resilience.

The budget allocates $2.4 million for Treasury to establish a taskforce to consult on the design and implementation of the reinsurance pool for cyclone and related flood damage, which will be backed by a $10 billion Government guarantee.

The reinsurance scheme due to come into effect in July next year would cover home building and contents, residential strata, residential mixed-use and certain small business property insurance policies in cyclone-prone areas, the Government says.

“The estimated value and range of calls on the guarantee is unquantifiable at this stage of policy development,” Budget papers say. “Further modelling on the potential costs of the guarantee will be undertaken before July 1 2022.”

The budget provides $615.5 million over six years for the previously announced Preparing Australia mitigation program and includes $280 million over three years for projects in bushfire affected areas.

A new Australian Climate Service to improve the ability to anticipate and prepare for more extreme weather events due to a changing climate, and to inform risk reduction and resilience investments has been allocated $209.7 million.

The National Recovery and Resilience Agency, which will oversee the mitigation program and catastrophe responses, will receive $61.1 million over four years and $22.9 million a year ongoing.

A pilot program to fund cyclone risk mitigation works for strata title properties in north Queensland, being implemented with the state government, receives $40.3 million over three years.

The Insurance Council of Australia (ICA) welcomed the spending and called on state and territory governments to match the federal funding in their jurisdictions.

“The Productivity Commission’s estimate that 97 per cent of all disaster funding in Australia is spent after an event, with just three per cent spent on mitigation measures ahead of a disaster, shows that the Federal Government’s commitments are an historic first step towards redressing that imbalance,” ICA CEO Andrew Hall said

The National Insurance Brokers Association says the budget also includes measures such as tax cuts for small businesses, investment incentives, support for regional areas and targeted industry packages that will help insurance clients as well as broking businesses.

When the unexpected happens, HDL is here to help.

If you’ve been impacted by cyclone or flood damage, it is a stressful time and we are here to help.

Our highly experienced team will be by your side to help make the claims process as smooth as possible. We will work with the insurer on your behalf to ensure you receive your full entitlement without delay.

If you would like to discuss what this could mean to you, contact us.

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The information provided in this article is of a general nature only and has been prepared without taking into account your individual objectives, financial situation or needs. If you require advice that is tailored to your specific business or individual circumstances, please contact HDL.

HDL news, updates and publications may contain links to non-HDL websites that are created and controlled by other organisations. We claim no responsibility for the content of any linked website, or any link contained therein. The inclusion of any link does not imply endorsement by HDL, as we have no responsibility for information referenced in material owned and controlled by other parties. HDL strongly encourages you to review any separate terms of use and privacy policies governing use of these third party websites and resources.

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]]> CHU launches first “build to rent” property insurance https://www.hdlbrokers.com.au/chu-launches-first-build-to-rent-property-insurance-2/ Tue, 18 May 2021 05:27:00 +0000 http://101.0.65.174/~hdlbrokerscom/?p=42203

CHU launches first “build to rent” property insurance

CHU launches first “build to rent” property insurance

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CHU has launched the first specifically tailored insurance product to capitalise on the development of specifically designed for “build to rent” properties.

A property trend, which is popular overseas, has reached Australia and gaining momentum. One of Australia’s leading strata insurance specialists CHU has launched the first insurance product specifically designed for “build to rent” properties.

Individual builders and property developers are retaining 100% ownership of the unit/apartment block development, rather than selling some or all of the units on completion or registering it for strata title. “Build to rent,” as it is known overseas, is popular in major cities in the UK, US, Japan and parts of Europe because they offer a more secure and better rental experience.

It is beginning to grow in Australia. CHU is also seeing a trend towards 100% ownership by an individual or a company that negates the need for registration as a strata scheme under the state-based strata title legislation.

CHU has launched a new product, Build to Rent – Residential Insurance, to provide cover for these properties.

“There is a gap in the insurance market for these non-registered strata style units, “said CHU CEO Kimberley Jonsson. “The risks seem to fall between the cracks for insurance, as they are neither a registered strata plan nor a residential home building”.

“CHU’s new product will give the owners of these properties peace of mind,” she said.

CHU’s Build to Rent insures the property, provides liability insurance, machinery breakdown cover and catastrophe insurance.

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If you would like to discuss Build to Rent insurance contact us.

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The information provided in this article is of a general nature only and has been prepared without taking into account your individual objectives, financial situation or needs. If you require advice that is tailored to your specific business or individual circumstances, please contact HDL.

HDL news, updates and publications may contain links to non-HDL websites that are created and controlled by other organisations. We claim no responsibility for the content of any linked website, or any link contained therein. The inclusion of any link does not imply endorsement by HDL, as we have no responsibility for information referenced in material owned and controlled by other parties. HDL strongly encourages you to review any separate terms of use and privacy policies governing use of these third party websites and resources.

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]]> NIBA defends broker commissions in submission to ASBFEO https://www.hdlbrokers.com.au/niba-defends-broker-commissions-in-submission-to-asbfeo/ Mon, 17 May 2021 07:01:00 +0000 http://101.0.65.174/~hdlbrokerscom/?p=42302

NIBA defends broker commissions in submission to ASBFEO

NIBA defends broker commissions in submission to ASBFEO

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The National Insurance Brokers Association (NIBA) has responded to the Australian Small Business and Family Enterprise Ombudsman’s report into small business insurance issues.

The report identified “widespread market failure in regards to the availability and affordability of essential small business insurance products.” While NIBA welcomes the final report and the renewed focus on small business insurance issues it rebuked a number of recommendations, most importantly the recommendation that the ban on commissions be extended to general insurance brokers.

The NIBA submission strongly rejected the proposition that commissions are inherently conflicted, “Insurance brokers have an obligation to act in the best interest of their clients at all times. This obligation is more than aspirational, it is the legal foundation on which Australian insurance law is built. While the Royal Commission into Misconduct in Banking and Financial Services found evidence of commission payments leading to poor consumer outcomes in other areas of financial services, no such evidence was found in the intermediated general insurance industry. In fact, the Royal Commission found no evidence of misconduct by general insurance brokers despite brokers being well within the commission’s terms of reference.”

The submission also stated that further evidence of broker’s commitment to their clients best interest can be seen in the extremely low number of AFCA complaints against insurance brokers. For example of the 607 complaints received by AFCA in relation to small business insurance less than eight percent were complaints against an insurance brokers.

“Rather than providing incentives for conduct which leads to widespread client detriment (for which there is no evidence at all), general insurance commissions provide a number of benefits small business clients, especially when a client’s business risks are difficult to place in the insurance market, and when a client has a challenging claim that needs to be negotiated with the insurance company. In both of these cases, the insurance broker acts without charging for the time and effort involved.”

NIBA also noted Royal Commission recommendation 2.6 in relation to the proposed 2022 review of remuneration arrangements for general insurance products, and that the Association looks forward to making a substantive submission to that review. The submission stated, “It would be premature for the Federal Government to take action in relation to general insurance remuneration arrangements prior to that review being undertaken.”

NIBA’s response highlighted that this recommendation was made without any evidence of client detriment and under the incorrect assumption that removing commissions would reduce costs to small business owners.

The submission stressed that in a hardening market, insurance brokers play an even more critical role in helping small businesses navigate the insurance landscape and ensuring their cover remains appropriate to their level of risk.

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The information provided in this article is of a general nature only and has been prepared without taking into account your individual objectives, financial situation or needs. If you require advice that is tailored to your specific business or individual circumstances, please contact HDL.

HDL news, updates and publications may contain links to non-HDL websites that are created and controlled by other organisations. We claim no responsibility for the content of any linked website, or any link contained therein. The inclusion of any link does not imply endorsement by HDL, as we have no responsibility for information referenced in material owned and controlled by other parties. HDL strongly encourages you to review any separate terms of use and privacy policies governing use of these third party websites and resources.

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