With bushfires burning around the country, it’s important for homeowners in fire-prone areas to take steps to ensure they have the right insurance in place.
This article from the Steadfast online magazine Well Covered, discusses risks of underinsurance, how to avoid mistakes and ensure homeowners have the right insurance in place, particularly in fire-prone areas.
All business owners have a lot of challenges, but many fail to contemplate what might happen if their business is suddenly unable to trade. From illness or injury to a fire at your supplier’s warehouse, there are many ways that your profit generation could be suddenly halted. While there are many rewards to being a business owner, the threat of the unexpected should not be overlooked. One of the most effective ways of keeping yourself and your business safe is through Business Income Protection Insurance. While many people have personal income protection, income protection for business owners is a much more focused form of coverage that could keep you much more safeguarded against the unexpected.
Disruption to your workflow can be caused by many uncontrollable events. Business Income Insurance policies are intended to cover your living and working costs while you are unable to trade. Whether you are forced to close your business due to long-term disruption or need to cease trading temporarily, Business Income Protection can make sure that when you are able to reopen the doors you will be in a much more secure position. When work is disrupted, business owners still have bills to pay, staff wages, and supplier costs that need to be maintained. And that can be very challenging if you are not generating any profits.
If there was any damage caused to your business premises, such as a fire or a flood, would your current finances keep you afloat? Any kind of damage, disaster, or business interruption can have a dramatic effect on a business. Without the reliability of ongoing profits, many business owners simply lack the resources needed to stay financially secure during unexpected breaks in trading. Business Income Insurance is intended to keep you financially stable as you tackle disruption, and can be a useful resource when you’re trying to get your business back up and running to pre-disaster levels.
Income Protection Insurance can cover individuals or businesses, but research in 2016 revealed that only 31% of Australians have their income protected.
Research by the Australian Centre for Business Growth suggests that 13% of Australian SMEs fail due to external factors such as natural disasters, changes to regulations, or even shifts in global trends. However, the actual number may be much higher than this.
Income Protection Insurance is not a new type of coverage. In fact, the first recorded policy that was designed to protect income was back in 1880!
Most Business Income Protection policies will vary according to your needs. However, you can expect that your policy will cover:
Generally, Business Income Protection will not cover you if your business is harmed by you intentionally, particularly in cases where damage was caused by intoxication. You will also find that most policies will only cover your costs if your business suffers a loss or inability to trade as a direct result of a specific disruption.
Businesses exist to make a profit. If a business is unable to make money due to any kind of external factors that are out of the owner’s control, having Income Protection can give you the financial safety net that you need to recover and continue trading.
There are countless circumstances that may have a negative effect on your business, many of which are impossible to predict. The good news is that it is possible to prepare for any eventuality, thereby safeguarding your business from potential financial ruin. The best way to do this is with the right business insurance.
However, as a business owner, what specific types of business insurance are you responsible for? What insurance are you required to have by law? Furthermore, which types of insurance are worthwhile considering despite not being mandatory? Let’s find out.
If your business has any employees, then workers’ compensation is a must. Essentially, it is a type of accident insurance paid for by employers which provides coverage should an employee be injured on the job. The insurance will pay for medical-related costs and will provide wage-loss compensation in the event that the employee is unable to work for a period of time following the accident/injury. Workers’ compensation also applies to circumstances when an employee contracts a work-related illness. Workers’ compensation is solely the employer’s responsibility – there are no deductions made from the employees’ salaries in order to pay for it.
Public liability insurance, although mostly optional, is required by law for certain types of businesses in Australia. In essence, it protects your business from financial ruin should you or your employees ever be accused of negligence. It may offer cover in the following situations:
This type of insurance is required by law, but only if you own a motor vehicle or a business vehicle. Many business owners will be pleased to discover that third party personal injury insurance is often included in their vehicle registration fee. Ultimately, it provides cover for any costs relating to injuries that a motorist may cause to others in a motor vehicle crash anywhere in Australia. Most third party personal injury insurance will cover treatment, care and support of the injured parties, pay for claims management expenses, and settle worries regarding both past and future economic loss in relation to the injury.
In order to remain compliant, all Australian business owners must make sure that they have invested in the right insurance as per the law. Remember, however, while there are specific types of business insurance that every employer is responsible for, there are many other types that are not mandatory, but that can greatly benefit your establishment in the long run including professional indemnity insurance, cyber liability insurance and stock and asset insurance. It is worthwhile to consider all of these types of insurance if you are in search of total peace of mind that your business is properly protected and ready to face any challenge that may come its way.
Australians are increasingly working from home, with the most recent data from the Australian Bureau of Statistics indicating at least a third of us choose to work from home at least part of the time.
A study by future trends research house McCrindle shows there are lots of different reasons why people work from home. In total, 45 per cent of Australians want the flexibility to juggle other things while working, while 25 per cent of us want a better work/life balance. Additionally, 15 per cent want to work without distractions and 12 per cent want the freedom to also look after children while working.
There are also many different models when it comes to working from home. Some people run their own businesses. Others have negotiated to work from home with an employer part-time. Another group works for an employer full time from their home.
Whichever model someone falls under, there are lots of different insurance implications when people choose to work from home. Here, Michael White, who is Steadfast’s broker technical manager, explains what some of those are.
“Home and contents policies do provide some cover for people who work from home, although it’s usually limited to the assets you’re using to do the work. Usually, a computer is the main asset and this is typically covered by your home policy, with a limit of about $10,000,” he explains.
As a result, it’s important to make sure the cover limit in your insurance policy on the assets you use to conduct work from home is adequate.
Says White: “In contrast to a commercial insurance policy, which may be negotiated, this is not the case with home and contents policies, whose limits cannot be negotiated.”
For instance, if your insurer provides cover for a home computer with a value of up to $10,000, you won’t necessarily be able to negotiate for a higher cover level of, say $20,000, even if you have business assets to this value. This has implications for businesses that operate a business with a higher value of assets from their home.
Let’s says someone is running a hairdressing salon from the basement of their home. The home and contents insurance policy won’t necessarily provide cover for expensive equipment such as chairs and basins above the limits specified in the policy. If this is the case, the business owner may look into buying a business pack insurance policy, which may provide more comprehensive cover.
Also, while they include limited cover for the tools of the trade, home and contents insurance policies won’t cover personal and professional liability.
“So, if people are operating a business from home, they need to take out a separate liability cover for that business,” White explains.
In general, White stresses it’s essential to first ensure if you’re working at home, you do have a home and contents policy that will provide cover for assets such as the computer on which you conduct the business.
In addition to that you need to make sure you’ve got liability cover. This will provide protection in the event that, for instance, a courier delivers a document to your home and trips and has an accident while making the delivery.
Important note – This article is provided by Steadfast.
The information provided here is general advice only and has been prepared without taking in account your objectives, financial situation or needs. Steadfast Group Ltd (ABN 98 073 659 677, AFSL 254928)
Telematics technology has proven benefits when it comes to encouraging more responsible driving, with research indicating better driver behaviour is one of the main advantages in using this innovation.
Black box or telematics technology is a way for businesses to collect data on how their employees are using company vehicles. Using telematics, businesses can collect information such as whether drivers are speeding or driving dangerously, as well as how long they spend on the road. This is important, as research indicates driver fatigue is one of the main causes of road accidents.
According to the most recent Telematics Benchmark report, improved driver behaviour, peace of mind and regulatory benefits are some of main pluses to using telematics. The research found when drivers use telematics devices, businesses achieve peace of mind knowing where their vehicles are on the road and can also plot more efficient routes, leading to reduced costs such as lower fuel bills.
Importantly, data shows businesses that use telematics can improve the safe driving record of their vehicles. Mercurien Insurance specialises in providing insurance to businesses that use tools such as telematics to manage their fleet of vehicles. One of its clients, a not-for-profit organisation with a vehicle fleet, saw speeding events per kilometre drop from 0.14 to 0.07 across two-and-a-half years. Additionally, at fault claims fell from just over 60 to just over 20 a year thanks to telematics.
As this shows, businesses that use telematics may experience a commensurate improvement in driver safety. As a result, some insurers look favourably on businesses that employ telematics in their vehicles.
Businesses collect the data and may provide it to some insurers, who then use it to make decisions on the policy and its conditions. Insurers may approve more favourable policies, including more cost-effective premiums, based on data showing better driver safety.
Turning to the public sector, the National Transport Commission is reviewing how telematics is used across the transport industry, especially among vehicles that are required to comply with the Heavy Vehicle National Law, as well as vehicles that are required by law to use telematics, such as taxis and buses.
Michael White, Steadfast’s Broker Technical Manager, explains telematics may be used by businesses to better manage how their fleets are operated and to also provide this information to their insurer.
“In the case of heavy motor vehicles, telematics can provide information on how the vehicle is being driven, speeds, how brakes are used and whether drivers comply with road rules,” he says.
Zurich Motor Fleet Underwriting and Risk Engineering is one insurer that has a telematics-based insurance policy. Zurich Fleet Intelligence (ZFI) uses telematics data gathered from its policyholders vehicles through black box technology. Subsequently, Zurich uses this information when assessing insurance policy applications and claims.
Often, Zurich’s clients already have devices in place in vehicles so they can monitor vehicles for logistics purposes. ZFI can draw on this data to assess how individual drivers behave when they are on the road. The technology also provides information to drivers about their driving performance, online and in real time.
However, another insurer, QBE, has exited the market, closing its Insurance Box product it launched in 2014. This technology provided people with a Drive Score and helped them become better drivers, by providing feedback on driving habits and tips on how to improve driving performance. It was the first product of its kind in Australia but will no longer be offered as a standalone product.
Despite QBE streamlining its telematics offering, this technology is likely to become more popular with insurers, businesses and regulators as it becomes more sophisticated over time.
Important note – This article is provided by Steadfast.
The information provided here is general advice only and has been prepared without taking in account your objectives, financial situation or needs. Steadfast Group Ltd (ABN 98 073 659 677, AFSL 254928)
If you’ve scrimped and saved in the hopes of achieving financial security through an investment property it makes sense to insure such a valuable asset.
It’s no secret that Australians are among the most real-estate obsessed people in the world.
Around two million Australians own an investment property. A disproportionate number of these people have their own business. They are typically hoping to set themselves up financially through what they see as a safe, easy to understand investment (and perhaps reduce their tax through negative gearing).
Buying property might be less complicated than attempting to play the stock market, but all investments have the potential to end in tears. Ian Mabbutt, the Head of Personal Lines at Steadfast Underwriting Agencies, explains why it’s a good idea for investment property owners to make sure they have the right landlord insurance.
What is landlord insurance?
“Landlord insurance is the home and contents insurance you take out on a property you own but rent out rather than live in,” Ian says. “It’s a policy that will cover you for most things – public liability, storm damage, fire, theft and so on. That noted, these policies don’t cover wear and tear. Also, if owners want to be covered for loss of rental income they need to choose – and pay extra for – the rent-cover option. Loss of rental income is the biggest issue owners face but rent cover isn’t standard on landlord insurance policies.”
Read the full Steadfast article here.
Many Australians, especially those who own businesses, discover they don’t have the cover they need in the worst possible circumstances.
Insurance is one of those subjects that many people glaze over. So, just to test how knowledgeable you are about this important but unsexy topic, see how many of the following you can answer.
Answers:
If you failed to get all (or any) of the answers right, you can take solace in being a typical Aussie. Survey after survey has shown that Australians don’t have a good grasp on what insurance policies might be relevant to them. Unsurprisingly, Australia is one of the most underinsured nations in the developed world (underinsurance is when an individual or business has no or inadequate insurance to cover their legal liabilities, or the cost of loss or damage to their assets).
The Insurance Council of Australia’s 2015 report on non-insurance in the SME sector showed a non-insurance rate of 12.8 per cent. Paul Nielsen, director and chair of the Council of Small Business Australia (COSBOA), says many SMEs are in denial. “Business owners tend to think it won’t happen to them. Because of this, some SMEs view insurance as dead money,” he says.
Read the full Steadfast article here.
Small business owners tend to be born optimists with little inclination to think about what could go wrong. That’s why it pays to have an insurance broker in your corner to safeguard what you’ve worked for.
Paul Harrison’s family-owned shoe shop in Sydney’s Neutral Bay has operated out of various locations for more than half a century. It’s used insurance brokers for the past 35 years.
“When I came on board, we already had insurance but not at the level we needed,” says Harrison. “Most of the insurance we had was good, but it took time. If we made a claim, an assessor would come along; then he’d send you forms to fill out before repairs could begin. All that time you’re not trading.”
Anyone who has compared car, home or health insurance policies to try to find the best deal knows how time consuming it can be. Choosing a business insurance package is even more complex because of the range of risks requiring cover.
A business insurance broker will not only save you time sourcing the right policy, they can also save time and money if you need to make a claim.
That was Harrison’s recent experience with his long standing Steadfast insurance broker.
“We had a leakage from the residential unit above our premises that ruined our ceiling, stock and floor. With rent and wages to pay, you can’t afford to be out of business for two months. Our business insurance broker was onto it straight away. We were able to replace our flooring within two days and probably missed five days’ trading in all”.
Small business owners are great at what they do, whether it’s running a café or a consultancy. But they are rarely insurance experts. “What they may not understand is the broad range of risks they face,” says Dallas Booth, chief executive of the National Insurance Brokers Association(NIBA).
A business insurance broker will help identify the risks your business faces, then get the insurance package that matches those risks. “There’s no point buying a business package off the shelf if it only covers some of your risks,” says Booth.
“I don’t think you can do that on your own. You may think you know what can go wrong but you never realise how much [an adverse event] impacts on your business going forward,” says Harrison.
Read the full Steadfast article here.
It can take just moments for fire, flood or thieves to wipe out years of hard work, asset accumulation and stock. But it can be months before you realise the full extent of the damage – and even longer to recover – if you don’t have a detailed and up-to-date inventory list encompassing business asset including equipment, as well as stock.
It’s fairly easy to name your business’s key assets – you’ll probably think of the premises, and the tools and technology that you handle every day.
But what about those items that aren’t necessarily right in your face and that you accumulate over time? Signage, cleaning equipment and office supplies such as staplers and labelers can add up to a significant investment if they all need to be replaced at once.
Because they are not handled or used every day, it can take time to realise they were stolen or destroyed. But this doesn’t make them any less significant to the running of your business.
Not having these items can hamper your efforts to get back up and running quickly. And this – minimising the interruption to your business – is where a detailed and up-to-date office inventory list is important.
To view the full article, please visit Steadfast Well Covered here.
The UK’s Grenfell Tower disaster has had widespread implications for professionals in Australia’s construction industry. Here’s how to help protect yourself if you’re a contractor who’s worked on any Australian building project.
The UK Grenfell Tower disaster claimed the lives of 72 people on 14 June 2017.
The tragedy unfolded on television and computer screens around the globe, serving as a sharp and tragic wake-up call to governments and regulators around the world that cheap, non-compliant cladding materials could create devastating fire hazards for high rise buildings.
In Australia, the threat combustible cladding poses remains very real. As evidenced by a recent fire at an inner city high-rise in Melbourne that forced the evacuation of hundreds of residents and required more than 60 fire fighters to bring it under control.
Authorities and insurance companies have been quick to put new procedures and policies in place, including the Victorian Cladding Taskforce and NSW’s Fire Safety and External Wall Cladding Taskforce
In NSW, new laws require owners of existing buildings with combustible cladding that fall within specified categories to register their building with the NSW Cladding Registration portal by 22 February 2019.
As non-compliant buildings are identified around the nation, owners may be ordered to remove the cladding from their buildings.
This has been seen already at the Lacrosse tower building in Docklands, Melbourne, which caught fire in 2014. In turn, the apartment owners are now suing the builder and other consultants to cover the costs.
“They’ve initiated legal action against the builder and a lot of the consultants who worked on the project,” explains Steadfast’s Broker Technical Manager, Michael White.
“Because one thing about all these kinds of situations is that anybody who had anything to do with the project, no matter how remote, can get sued.”
To view the full article, please visit Steadfast Well Covered here.
