Congratulations Ron Tatarka on Elite Broker of the Year Award

RonI would like to join those congratulating Ron Tatarka, the founder and Managing Director of Scott Winton Insurance Brokers, for winning this prestigious award for the second year running.

LMI do a lot with Ron and his team and it is not only nice, but a measure of the quality of Ron, that he mentioned the relationship we have as being one of the reasons for the continued growth in his business.

From our perspective, after trying to be all things to all people for many years, we have changed our own strategy. We will still provide some services to the general market such as this free blog, but the strategy means we are working with a small group of professional brokers in each state in a close partnership and providing additional services and higher service standards for them.

We believe, as do those that we are working with us,  in what we are calling our Platinum Partner Program, whereby what the LMI team bring to the table gives the brokerage a competitive advantage and those brokers attract more of the right sort of clients, who in turn value risk management and want to be fully protected. As brokerages, like Ron’s, who was one of the first to embrace the  LMI Platinum Partner concept, grow, as a result, LMI grows along side them with more mutual clients to serve.

This is not just about making a dollar, or winning awards, it is about the job satisfaction and taking away that feeling of  just being used(up) and not valued, which we have when all we are asked for is free technical advice, or to put the toothpaste back in the tube when something has turned really nasty.

The other part of the strategy centres around succession and developing relationships between the younger members of our team, such as my son Steve and Revell Weightman, head of LMI Forensics, who are developing relationships with the next generation of leaders such as Ron’s son, Avi, and others within the organisation. LMI will be around long after I will be gone and this, again, is not a one way street under the Platinum Partner Program where those next generation leaders in the brokers are taking a long term approach to training and working with a company who they know will be there supporting and working with them long after others have moved on.

Congratulations Ron and thank you Ron. While I  do not want to take anything away from you, I see your win as vindication of the strategy backing up your hard work and drive. The thank you is for agreeing to work with LMI as you do and for your kind words.

To read the published article on the win please visit–elite-broker-2014-186933.aspx

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Update on

ccAs was kindly reported as the lead story in Insurance NEWS this week, the first review of the ratings has been completed by the LMI ClaimsComparison research team.  Several insurers have had a rating change typically no more than 1 star in either direction.

At this stage we are still only rating the personal lines classes but we are in the finishing stages of fine tuning a survey that will increase the claims rating service to 17 product classes.

Both Insured’s and those in the claims process, particularly insurance intermediaries and suppliers can have their say either on a individual claims experience or all claims over the past 3 months.

I will post another article when this feature goes live.

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Removal of Debris Sub-Limits Still far too Low

RODIn all bar a couple of the major claims that I and the LMI team have been involved in around Australia and New Zealand of late, the Sub-Limit for Removal of Debris has proved painfully inadequate.

$100,000 cover for Removal of Debris under any Industrial Special Risks (“ISR”) Policy or its equivalent is really not enough. For any ISR I would like to see a minimum of $250,000 and then upwards from there, depending on the size of the building and other insured assets, the construction (remembering asbestos adds greatly to the cost), difficulty of access, the presence of dangerous substances, the list goes on.

It appears that the Sub-Limit was set many years ago and like many other Sub-Limits, have not been reviewed annually to ensure that they are still adequate in 2014 and beyond.

Please consider this on all your property risks so that you or your client does not find themselves with a significant uninsured loss from the very start of their claim.

I do feel quite frustrated about this as I have been banging on about the importance of this for quite some time, but my message is not getting through to enough brokers and insureds.

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Blog Question: Disruption Caused by Damaged to Landlord’s Property question is a follow up to a earlier posting on the trigger for a Business Interruption claim (refer

Good morning Allan

I read your earlier article on the trigger for a business interruption claim. My query is in respect of a [Australian]  Zurich  business package wording.   

Question is will the Business Interruption policy section respond if the building is damaged (being a tenant they only have the contents insured with business interruption). 

The definition of damage, unlike an ISR or many other business packs does not indicate policy would respond to landlords premises damage.   

I would appreciate your thoughts on this.I am visiting this client tomorrow morning to discuss their  question further.  Perhaps the prevention of access clause may apply but again does not seem to be clear on this.    

Thanks and regards,

 John [surname and email provided]

I start by referring to the policy version that I am looking at to answer the question. The policy is the Zurich Business Insurance policy print code PCUS-008274_V2_0114 12/03/2014 which was only released last month.

I would refer you to the Extensions of Cover on page 32 which states:

2. Landlord’s property and Other non-owned property used by you at the premises

We will pay for loss of income that results from an interruption of your business that is caused by insured damage to your landlord’s and/or other non-owned property used by you at the premises.

While this policy does not slavishly follow the traditional business interruption wording, the cover, not only on this issue, is just as good if not better than most policies in the market.  This is a generic statement and should not be used as the sole basis for selecting a policy. The Insured’s risk exposures and risk appetite always need to be identified before choosing the policy to recommend.  To identify the coverage features and benefits, as the creator of, I naturally suggest this is the best starting point.

Having said this, on the question raised by the client, cover is clearly in place for the risk that they have identified as important to them.

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Blog Question: Will an ISR Policy Respond to a Business Interruption Claim When the Stock is Insured Elsewhere?

greenThis is a question that has been asked of me three times in the last month. As I explain to Shane today in response to the latest question:

Good afternoon Shane,

This is a common question asked of me, certainly of late.

The trigger for a Business Interruption claim under an ISR Policy contains what is known as the Material Damage Proviso.

This Proviso reads as follows:

 Provided that the Insurer(s) will not be liable for any loss under this section unless the Insured’s property lost, destroyed or damaged is insured against such Damage (loss arising out of destruction or damage by explosion of Boilers and/or Economisers excepted) and the insurer or insurers by which such property is insured shall have paid for, or admitted liability in respect of, such Damage unless no such payment shall have been made or liability shall not have been admitted therefore solely owing to the operation of a provision in such insurance excluding liability for loss below a specific amount.” Emphasis mine 

You will note that the Proviso does not require the property damage that gives rise to the disruption to be insured under the ISR, but any policy will do and this, of course, includes a throughput policy.

What is required is that the stock is insured, that the stock loss is met under the other policy and that the ISR policy does not have an exclusion, such as flood, that would exclude a Business Interruption claim in any event.

To learn more please read pages 148 and 149 of volume 1 of my book, Understanding the ISR Policy – the Mark IV.

I trust this explains the position in any event.



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A Happy Ending

Ruptured water pipe causes water damage and leaves a big excess water bill.

Ruptured water pipe causes water damage and leaves a big excess water bill.

I received this email from a broker following up on a question he had asked me a couple of weeks ago.

Hi Allan,

I spoke with you a couple of weeks ago on this claim scenario relating to a burst water pipe where the client was hit with a $x,000 water bill for the lost water after their pipe burst and damaged their contents/stock. The pipe was burst on their side of the water meter which meant they were subsequently hit with a large water bill.

 I thought you would like to know that I was able to successfully argue the claim and the insurer has settled to the client.

Thanks for your feedback and assistance – it was good to be able to bounce the idea off you before I pursued it. My email to the insurer is below.


Luke [surname and email provided]

 This is a question that pops up regularly, as does loss of electricity through theft or accident damage.

As explained in the broker’s email to me, based on our discussion, he drafted the following email to the insurer who, on reading the explanation, agreed to meet the claim for the excess water charges. Well done to all concerned.

Hi [claims officer’s name],

Firstly, I would like to point out that you are referencing the wrong policy wording here.  I believe the policy wording that applies to this policy according to the schedule is the [insurer’s name, cluster group] Business Pack [policy print code]  (s. I’ve attached this wording for your reference. [not attached to this blog posting for privacy reasons] The policy covers loss or damage to property insured as follows:

 Page [] – ‘Provided the ‘Business property’ cover section is shown in the Policy Schedule as taken, we will cover you up to the sum insured for loss or damage to your property insured at the premises which occurs during the period of insurance.’

Note: The cover section has been taken, the loss occurred at the premises, and it occurred during the period of insurance. You will note the sum insured of $x.x million that applies to the “Contents/Stock” section. Therefore, we need to look at where the “property” is covered.

Page [] (Definition of Stock) – (d) any consumable products or materials used in your business

This will include water, electricity, and any other consumable products or materials used in the business. Note there are no property exclusions for any type of stock is included in this definition.

The water bill and loss of water at the premises is NOT a consequential loss, but rather simply a loss of stock as has been suggested. The single event of the burst pipe caused loss & damage to the client, the loss being the loss of water, and the damage being the damage the water caused.

 To provide you with all the  relevant information, I have reviewed  pages [] & [] and note that there are no event exclusions which would apply to this situation.

I therefore request that you reconsider [insurer’s name]’s position on this matter, and promptly make arrangements to settle this claim in accordance with your basis of settlement provisions noted in the policy.

My suggestion for settlement is as follows:

Water bill being claimed – $x,xxx.xx

Less usual water bill (past 2 water bills $xxx.xx + $xxx.xx divide by 2 = $xxx.xx

Claim payment – $x,xxx.xx less $xxx.xx = $x,xxx.xx (no GST applicable to water)


[surname and email provided]


As with most claims, the way to determine if the loss is covered, as opposed to how it ought or ought not be covered, is to read the words of the contract.  Here the broker sought advice, they went and read the actual wording and presented a factual letter to the insurer setting out his position in a non emotional and professional way.

Having received the letter, the underwriter agreed with the logic of the argument and immediately paid the claim, rather than further inconvenience their client.

I am not always advised on the outcome of such matters and it was good of Luke to take the time to write and say thanks.

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Beware another scam

Danger Scam AlertI received an phone call advising that I had won $990 of travel as I was the lucky winner on my last travel day. It was initially an automated call and they did not mention my name or frequent flyer number.

The call then transferred to a person who asked if I had a personal credit card and I could immediately see where this was going and that my initial suspicion was right and broke off the call.

I contacted QANTAS who advised that they were aware of the scam and that all staff had received an email about this earlier today.

I write this as I do not want any of my readers to be caught with the scam.

Have a safe and happy Easter and if you are making a 10 day holiday of it, enjoy.

Read Me View comments Upgrade and Rating Changes

Capture ccompLMI Claims Comparison, which was launched in the third quarter of 2013 generated a great deal of interest.

Since then, we have provided a great deal more information as to how we rate the policies and have updated the ratings based on the latest information released by the Financial Ombudsmen Service.

To view the current ratings, please visit:

During May we will be commencing our formal survey of claims service so that, as requested by so many within the insurance industry and beyond, we can expand to other classes as well.

If you would like to be part of the survey, or would like any further information, please do not hesitate to email me at

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A Quick tip on Spotting Spoof Emails

Cyber GuideSteve Manning and I are currently researching and writing the third eBook in our Mannings Guide to Insurance series on the hot topic of ‘Cyber Security and Insurance’.

One of the tips we will be providing is about spotting spoof emails that claim to be genuine, centering around how the email is addressed. For example, if you receive a genuine email from PayPal it will be addressed to you in person (eg first name then last name). A spoof email typically starts with, “Dear PayPal Customer” or “Dear PayPal user”.

The same goes for many banks and other institutions.

If in doubt of the authenticity of an email, it is best to ring the institution on a number that you know to be real and ask. It is always better to be safe than sorry!

Besides tips to protect business operators, the Guide will also explain the threats, provide a handy check list and the things to consider when looking at Cyber Insurance, such as the extent of both first and third party exposures.

The Guide is not far off and I will let you know when it officially launched. As always, Steve and I enjoy these projects and explaining difficult topics, simply. The book, like its highly successful predecessors, is a sales and risk management tool to inform the public about the risks and to assist the broker or underwriter in providing meaningful advice.




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New Cameras Introduced into Victoria to Catch Mobile Phone Users

mobile phone camerasThis week it has been announced that a number of new cameras have been rolled out across Victoria to catch drivers who are on their mobile phones talking, texting, or being otherwise distracted. This includes putting on make up and not wearing your seat belt etc. The cameras are able to see inside the vehicle from a distance of up to 700 metres.

The evidence is overwhelming that these sorts of distractions do increase the risk of accidents and yet so many of us continue to break the law. The penalties were increased in November 2013, probably deliberately in advance of the roll out of the new detection technology.

The current penalties in Victoria for illegal use of a mobile phone or interacting with other units that have visual displays while driving (eg. DVD players or tablet computers) that are not driver’s aids are:

  • $433 fine 
  • 4 demerit points

Note: learner, P Plate 1 and P Plate 2 drivers are not permitted to use a hand-held or hands-free mobile phone while driving.

While this is the case in Victoria, it should be noted that it is illegal in all Australian states and territories to use a hand-held mobile phone while driving. This includes:

  • talking;
  • texting;
  • playing games;
  • taking photos/video; or
  • using any other function on your phone.

Using a hand-held mobile phone is also illegal when your vehicle is stationary, but not parked e.g. when you’re stopped at traffic lights.

Anything that reduces the road toll and unnecessary accidents has my vote and I look forward to seeing what impact the new cameras have on driver behaviour and more importantly, the accident rate.

With the Easter and ANZAC Day back to back, I thought it a timely reminder to stay safe on the roads at this peak accident period.

I conclude with some safe driving tips found on the VicRoads website while researching the current fines and penalties.

Safe driving tips and the mobile phone

  • Use Road Mode, an android app that prevents you from being distracted by your phone while you drive
  • Use voicemail
  • Pull over safely and park to make or receive a call
  • Plan breaks in your trip for phone calls
  • Tell your family and friends not to call when you know you’ll be driving
  • Tell callers you are driving and may have to end the call. (I believe you should not answer the call in the first place).
  • Don’t make calls in heavy traffic, poor road conditions or bad weather. (Again I believe you should not make calls while driving at all while driving, even stopped in heavy traffic or a red light).
  • Never look up phone numbers
  • Never read or send text messages.

A mobile phone can be important in an emergency. If you need to use your mobile phone to call for help, stop and park safely where you will not endanger other road users.


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