Another ‘Clayton’s’ Endorsement Leaving a Client with Limited Cover

ClaytonsIt is disappointing to me that so many times a client purchases what they think is adequate and proper insurance cover and then find that the policy has an endorsement or, worse still, a section buried on page 54 of a 65 page policy that restricts or excludes the cover they were intending to insure.

In the latest one to hit my desk, a company that described their business as ‘Film & Television Production Services’ on an application with a direct insurer, received their policy with the following endorsement:

flim exclusion

Luckily, the client questioned the endorsement with a broker they knew and correct cover was immediately put in place.

My view is that if the Insurer does not have an appetite for that particular risk, that is fine. Just tell the client there are specialist insurers in the market that cater for their occupation, rather than take a premium under what I regard as false pretenses and not provide the coverage; the lack of which could destroy the business and create huge personal risk for the owners, directors and in some cases, the employees.

Business insurance is not straight forward. This time it ended happily, with the client getting the correct insurance with a quality insurance broker, Webster Hyde Heath, who specialize in this industry.

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Earthquakes hits California but most Losses Appear Uninsured

 

The Napa region is well known for its wines. Here the new trend is "shaken not stirred".

The Napa region is well known for its wines. Here the new trend is “shaken not stirred”.

A 6.1 magnitude earthquake that hit California’s Napa Valley on 24 August is estimated to have an economic impact of over US$4 – 4.2  billion, with insured losses estimated to be around half of this, according to Kinetic Analysis, which predicts that the earthquake could cost insurers and reinsurers US$2.1 billion. This leaves a huge uninsured proportion.

A significant amount of the insured losses is business interruption losses from the regions famous wine making region.

The earthquake in the early hours of Sunday morning was felt from San Francisco to Sacramento and even buildings that had seismic retrofits, as required by Los Angles regulations, are reported to have suffered damage.

The disappointing thing for me is that despite the obvious high known risk of earthquake in that state, the California Earthquake Authority (“CEA”) estimates that only about 10 per cent of home owners have earthquake insurance and in parts of the Napa Valley, the figure may be as low as 6 per cent.

Similarly, businesses often do not have coverage for earthquake and when they do, they underestimate the cost of damage and also the business interruption losses flowing from the damage. Sheri Aguirre of the CEA stated the obvious to me when she said that the benefits certainly outweigh the cost: “While earthquakes are infrequent events, they are capable of producing catastrophic loss. An Earthquake insurance policy provides coverage for the replacement cost of a home, subject to a 10 or 15 per cent deductible.”

While earthquakes are rare events in Australia, they still do occur. Of course, we are all reminded of the damage from the Canterbury / Christchurch earthquakes in New Zealand.

The other reminder to me is the need for every business to have and regularly test their Business Continuity Plan.  Visit ContinuityCoach.com for an inexpensive solution.

Earthquake is just one of the many perils that can can cause damage and which a good insurance program will cover. If in doubt, please speak to your insurance broker.

From the insurers point of view, 2014 has been relatively good so far. Global insured losses from natural catastrophes and man-made disasters totalled US$21 billion in the first half of 2014. This is a whopping US$6 billion less than the 10-year average of US$27 billion, according to figures from Swiss Re released recently.

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Claims Convention 2014 – Sydney

CC14I have been asked to speak at the 2014 Claims Convention being held at the Hotel Sofitel Wentworth, (61-101 Phillip Street, Sydney), tomorrow, 13th August at 4pm on the How, What, Where and Why ( I am throwing in Who and When) of ClaimsComparison.com

If you are attending the convention please come along to the session and learn about the product /service which is about to celebrate its first birthday and be expanded to cover 19 classes of insurance.

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Introducing Murray Rowley and Shirley Shi

Me in the centre welcoming Murray and Shirley to LMI at our Brisbane offices today.

Me in the centre welcoming Murray and Shirley to LMI at our Brisbane offices today.

I am extremely pleased to announce that Murray Rowley and Shirley Shi have joined me at LMI as part of our Claim Services team.

Murray, who is regarded as one of the world’s experts in mining losses, has been handling claims in a wide range of industries since the late 1960’s. He is both a Chartered Accountant and Chartered Loss Adjuster. One of Murray’s great strenghts is his tenacity at mitigating losses and this means attending as quickly as possible. Murray operates his own aircraft and has over 5,000 hours flying experience. Murray joins LMI as National Executive – Mining.

It was Murray, as one of the founding partners of MBS Pumfreys (now part of Cunningham Lindsay), that first employed me as a loss adjuster and it was from him and his fellow partners that I learned so much on the importance of loss mitigation and ensuring the Insured is treated fairly.

Shirley is a qualified accountant and CPA and is an experienced Business Interruption expert in her own right.

While both Murray and Shirley are based in Queensland, like all the experienced LMI claims team, they will attend claims anywhere required.

Source: Channel 7 News

Source: Channel 7 News

The Queensland team are off to a good start with our appointment on the major fire in the shipyard, where HMAS Bundaberg was undergoing repairs/regular servicing, to mitigate the loss and disruption where ever possible and to prepare both the Material Damage and Business Interruption losses.

 

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Podcast on Product Recall Insurance

Dollars with senseIn support of the release of Product Recall comparisons on LMI Policy Comparison.com  I spoke on the television about the need for insurance and the costs associated with a recall.

To view a copy of the segment please click here.

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Roma v Wagga Wagga on Flood

Severe Flood WarningIt was pleasing for the residents of Roma to learn that a major insurer in their town, Suncorp, had reduce premiums by up to 90%, even though the flood mitigation work being undertaken by the Council, with funding from the State and Federal Government, was not yet completed. It does show that the insurance industry does want to work with local authorities in protecting the home and business owners from unforeseen circumstances.

The private insurance industry cannot fund regular certainties, such as flood damage, to properties in known flood areas.

It was, therefore, extremely disappointing to me, those in the insurance industry in Wagga Wagga and to many of the residents of the City, when the Councillors elected not to go through with promised flood mitigation works despite significant funding from the NSW State Government.

Thankfully common sense prevailed and under great pressure this decision has recently been overturned, but now the fight to find the shortfall in funding is underway.

I would remind the local authority of Wagga Wagga of the words of John Locke from over four hundred years ago:

“Government has no other end but the preservation of property”  (1681)

Hopefully, the procrastination of the Wagga Wagga City Council is short lived. If it is not my advice to the residents of the City are to find some better elected officials and have the double benefit of less risk of flood and much more affordable flood insurance.

 

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Podcast on Directors and Officers (D&O) Insurance #insurance

Dollars with senseA series of interviews I had with Dallas Booth on his television program Dollars with Sense has aired recently.

Those interested may like to see the interview by clicking here.

To the brokers, it may be worth sending out the link to clients who need the cover but do not have it in place. That way it is a sales tool as well as protecting your own Professional Indemnity program.

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August 2014 is Special When it Comes to the Adjustments Clause

CalenderAugust 2014 will have 5 Fridays, 5 Saturdays and 5 Sundays. This happens only once every 823 years, but should be a good month for revenue for restaurants and other industries that tend to do more business on Fridays and weekends.

It happens this time in August, the 8th month, which the Chinese find lucky too boot.

Just something I thought interesting and worth sharing and had to quickly come up with an insurance angle. How did I do?

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