More books for the library and looking for an article – Can you help

I was delighted to get a wonderful collection of insurance texts on a wide range of topics from Mr Keith Wehl. Thanks Keith, you really made my day when you dropped them in.

The books have all been cataloged and included in our ever growing insurance library. These take our collection to just over 1900 books.

The library is available for use by anyone in the insurance industry. To learn more about the service please click here.

On a slightly different topic I am trying to track down an article which either appeared in The Journal or the Insurance and Banking Record back in the late 1970’2 to mid 1980’s titled: Whither Insurance. 

If you happen to have a copy would you please share a copy with me for as I recall, many of the issues outlined in this article are with us more seriously today and I would like to do a comparison.

Finally, back on the library, remember I will always give a good home to insurance books, policies, and memorabilia / realia from the insurance industry so that it is preserved for current and future generations.

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ANNOUNCING: LMI RiskCoach OnTheGo

LMIGroup are pleased to announce the next evolution in its award-winning system LMIRiskCoach with RiskCoach OnTheGo. RiskCoach OnTheGo brings industry specific risk information from over 7000 industries and puts it in the palm of your hand.

The system allows users to research industry specific risks across 12 classes of insurance, look up significant exposures and explore risk checklists like never before. Go one step further and within seconds you can generate and send a co-branded tailored report with your company logo and business name right from the app.

The best part is that RiskCoach OnTheGo is available to all existing LMIRiskCoach users as part of their subscription.

To get started simply download the RiskCoach OnTheGo App from the Apple App Store or Android Play store! Or to learn more, contact LMIGroup via customerrelations@lmigroup.com

iOS: https://itunes.apple.com/au/app/lmi-riskcoach-onthego/id1184053199?mt=8
Android: https://play.google.com/store/apps/details?id=lmigroup.riskcoachonthego
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Steps To Take Immediately Following A Loss

STEPS TO TAKE IMMEDIATELY FOLLOWING A LOSS

Below is a small section of a Guide which assists you to prepare a business insurance claim. It explains a raft of issues such as GST, under insurance and much more.

If you would like a free copy please email, vic@lmigroup.com

  •  Report the claim to your insurance broker/adviser or if you do not have one, contact your insurance company direct.
  • If you need assistance in mitigating your loss and or preparing your business / business interruption claim by an expert contact LMI Claims. They act for you and their fee is typically covered under your insurance program.
  • Do not admit liability to any party for any damage caused by the cyclone/storm. This may prejudice your insurance claim.
  • Limit access to the premises to those who have a legitimate reason for being on the premises. (Insurance loss adjusters or others acting for neighbours, customers, etc have no right to enter your premises. If in doubt consult your LMI Claims Preparer).
  • Take immediate action to minimise the loss.
  • Protect undamaged property from loss.
  • Appoint one person to represent your company and protect your interests in preparing the insurance claim (your LMI Claims Preparer). Provide the LMI Claims Preparer with a copy of your full Policy wording including the Policy Schedule.
  • Implement a methodology to capture all costs and expenses that the business will incur, e.g. create a separate and specific account number in the company’s financial accounting records.
  • Take photographs and/or video the damage. The more the better.
  • Set up clear lines of communication with the insurance loss adjuster appointed by the Insurer and ensure that all personnel understand the functions of the loss adjuster, your appointed claims preparer, insurance broker/adviser, etc. It is extremely important that nothing is misunderstood or misconstrued as this may well delay the claim or reduce the settlement. For this reason it is important that your LMI Claims Preparer be present during all discussions with the loss adjuster and that no email, letter or other communication go direct from you to the loss adjuster. LMI use a Claims Management Plan which is regularly updated so that you, your insurance broker and the claims preparer know the current position of your claim.
  • Consult contractors for an initial estimate of the scope and cost of repairs.
  • Identify temporary measures needed to resume operations and the associated extraordinary expenses that are incurred.
  • Retain all damaged property if at all possible as proof of ownership and damage to the loss adjuster. I appreciate this is not always possible when it comes to perishable foodstuffs which may create a health hazard but in such cases, photographs and videos mentioned above are important along with weights and or an accurate count.

I originally wrote this to assist people following Cyclone Debbie. Thinking about it a few weeks later and realising that due to the heading it could be pulled up at some future time, I would add that details of any third party that may have caused the incident needs to be kept along with any physical evidence of the cause and damage.

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Dubai launches Dolphin water jetpack system for firefighting from the air

Reports from an article published by the ABC show how Dubai is taking firefighting to new heights, quite literally, with their introduction of a water jet pack system called ‘Dolphin’. You can view a video of the Dolphin in action on the ABC website (link above).

Alongside the Dolphin is the Martin Jetpack being looked at as an option to reach those tricky areas safely as it can be both unmanned and controlled remotely, or manned on the system.

As the heat from a fire goes up, I am not quite sure about this one but it is clearly worth a look for areas where it is extremely difficult to get to.

Photo: martinjetpack.com

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Cleaning effervescent

Today’s post is a follow up on a post two days back which centred around a potential product liability claim involving pavers which had been effected by unsightly effervescent powder.

What is effervescence?

Efflorescence is the chalky white look that develops on many bricks and pavers from naturally occurring salts in the raw materials bricks and pavers are made from whether this be clay or concrete.

Typically it is not harmful to the pavers in the short term, however if untreated, overtime it could start to wear away the surface. As long as it is kept under control, the effect of efflorescence should not cause any major problems.

Efflorescence is easily removed with a cleaner specially used for concrete surfaces. My research and experience suggests it is best to monitor the condition of the bricks or pavers and act promptly if there is a noticeable build up of white residue.

The problem may well reappear particularly after rain or the pavers or bricks getting wet but here is a suggested plan of attack to clean Brick and Concrete pavers:

  1. The first step is to ensure that there are no damaged, lose or shifting of the pavers. Then you can start to remove any excess dirt and debris from the surface. You can do this with a broom by sweeping the excess waste into one spot and then you can dispose of it.
  2. If you notice any harsh stains like petrol, oil, grease or tire marks, then you can purchase a water based cleaning solution specially formulated for such stains. Apply this solution to the affected area and leave it for approximately 15-20 minutes.
  3. Then use a high pressured hose to rinse off the solution.
  4. Mix a small amount of a household detergent with warm water and apply it to the pavement with the use of a broom.
  5. Once the area has been covered evenly you can then rinse thoroughly with a hose and leave it to dry.

You may need to do this at least once a month to ensure your prone bricks and pavers are kept healthy, as well as nice and clean.

 

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Did anyone partake in this survey

My post yesterday on two topics the supposed statistics of dodgy claims and the rise of the direct market in business insurance certainly generated a lot of response with heaps of emails on both.

Last night I posted a follow up on the second issue, and this morning following further emails over night I thought I would add further comment on the first issue of the alleged number of dodgy claims.

While I have the highest regard for KPMG and if it were anyone else then British Prime Minister Benjamin Disraeli’s famous line wouuld have come to mind: “There are three kinds of lies: lies, damned lies, and statistics

The key point from brokers, and my the claims team at LMI is that the vast majority of Insureds do not know what they do not know. As a result they often under claim their entitlement under their policy.

Add to this unqualified field claims handlers including some assessors and investigators who are not trained loss adjusters with little or no background in insurance who have not read the policy themselves and think their job is to cut the claim down no matter what and what they may claim is a dodgy item could in fact be a genuine claim.

In the vast majority of claims that are referred back to brokers and or LMI the amount is often put up to where it ought to be with no hint of fraud. It is just that good brokers and claims preparers are trained, have read the policy, often having input into the coverage, and understand the basics of insurance.

Not one person who wrote to me thought that the statistic quoted in this article could be anywhere near the true position. Like me, all felt that, most insureds under claimed seeking a fast resolution to their claim so that they have as little hassle as possible dealing with their insurer.

Yes there is the odd dishonest claimant and it is in everyone in the industry’s role to weed them out as we all pay for it but the last thing any of us need is for every insured to be treated as dodgy until proven innocent with a document request list and proof of ownership requirement that is impossible for the normal person to provide.

At the end of the day both sides need to show utmost good faith to the other for this industry to remain relevant and sustainable. What we cannot afford is the untrained to be embolden by this report and treat the insuring public worse than ever.

As part of my Make Insurance Great Again campaign, the Mansfield Awards will recognise the best claims departments within the insurance industry to recognize and thank them for delivering their organistations promise to be there for their clients at their hour of need and to help drive positive change within the insurance industry.

I will be writing more on this shortly but in the meantime, if you or anyone has great or poor service please ask them to complete the survey at www.claimscomparison.com.

 

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A disturbing response to my post today on buying business insurance direct – Get Ready for a Manning Rant!

In response to my earlier post today I received this email from a distressed broker.

Thanks yet again Allan for your insights.

Yes; it is extremely distressing to note the upsurge in the so-called ‘direct’ market influence.

I’m going to be very blunt now & tell you about an experience I’ve had during the last week.

The son of a very loyal commercial client of 30 years standing spoke to me recently about his need for Liability insurance.

He is a refrigeration & air conditioning supplier/installer/maintenance technician.

Long story short; the quotes I prepared were between $2,300 right thru to $13,500. (These are what I expected from experience. Maybe not the $13,500 though!)

Yes; of course there are many nuanced coverage differences that I went to great lengths explaining to him.

End result??? He went with XYZ [insurer name withheld] of all insurers, for $575 total premium!

Yes; you read this correctly.

Is the coverage adequate?? I very much doubt it; but there you go…price wins out.

I pray he has no issues moving forward.

Just wanted to share this with you.

Take care – Gary.


Note I have not named the insurer but it is one that has featured in my blogs several times for questionable behaviour in both Australia and New Zealand and one that has advised buyers that they can purchase their home policy in lieu of a strata policy. Enough said.

Despite my attention naturally being focused on LMI’s Emergency response to Cyclone Debbie and the many major claims we have been entrusted with already, I could not get this situation out of my mind. I am sure it is not an isolated case.

I wonder what the refrigeration & air conditioning supplier/installer/maintenance technician would think of a potential customer who elected to purchase a new or even second hand unit when he the expert new that it was a load of rubbish and would fail when it came to the crunch! Yet this same person does not question why a policy that he is relying on to protect his business, his income stream, his superannuation and perhaps the mortgage over his home can be 25% of the price and still be as good!

Has the client considered the basics such as goods in Care Custody and Control? Obviously not as the policy selected provides NO cover for most items under this heading, according to page 10 of the policy.

This client has NO cover as a tenant for damage caused to the landlords building, NO cover for any temporary site under his care custody or control, NO cover for employees property. With the brokers policy he would have full cover to the limit of liability. For vehicles nearby in his care custody and control, say a client drops of a van with a request to fit a refrigerated unit. NO cover. Under the broker policy, full cover to the limit of the policy.

With regards to customers’ goods he now has $25,000 where as with the broker policy he would have $250,000 as a minimum.

So what happens if this Insured has a claim. With the broker he has the advice of the broker and $25,000 cover for claims preparation costs from an expert. With his current policy he has no cover for claims preparation. He is completely on his own.

Of course: “it will never happen to Me!” is what so many people think. Now let me tell you of a true claim I handled a few years ago. The insured just happened to be a refrigeration mechanic. A fire broke out in his premises and he had a vehicle in for fitting, yes you guessed it a refrigeration unit. The fire started in the truck and the forensic investigator said the refrigeration mechanic was to blame. Trouble was he had a policy just like this with no cover for vehicles or goods in care custody and control. I learned about the case about 9 months after the incident and I proved the refrigeration mechanic was not to blame at all. I took my report into the lawyers acting for the truck insurer and they agreed to withdraw their demand. I thought it was a great result and rushed out to advise the client only to learn that after his marriage broke up due to stress caused by the fire and the demand which threatened to mean they would lose their family home, the Insured had hung himself the night before. This is not made up. It is a true story that upsets me to this day. With a good policy from day one, this really nice man would have had the protection of a meaningful insurance policy, the family would not have had all the stress and the tragedy and guilt of losing their husband and father.

This is why I push so hard for people not to buy insurance on price alone. You are a bloody idiot if you do. I cannot make it plainer.

Back to this “cheap” policy. I have only just got started. Let us take a claim for the costs of Cleaning Up, Nullifying Removing etc pollutants following a sudden accident release. Under the broker policy he has cover for the full limit of the policy, under the one he has selected NO cover.

There is no cover for loading and unloading. Broker policy full cover to the full limit of liability.

The broker policy provides a right to pay out the full limit of liability. The “cheap” policy does not.

If the Insured incurs their own legal defence costs the “cheap” policy has a maximum of half the limit of liability, the broker policy has the full limit.

The same goes for legal costs to represent the insured at a coronial inquest. That is half the limit for the “cheap” policy, full cover for the broker policy.

The broker policy covers the Insured’s wages attending a hearing or trial. The “cheap” policy does not.

I have not even got started yet on the exclusions such as hot works, such an important thing for this occupation. In fact the “cheap” policy has more exclusions than any other liability wording I have ever read.

Another big one that is even wider than the hot works exclusion is one that states:  Policy excludes any failure to comply with any Commonwealth State Territory or Local Government law or any safety requirement obligation or regulation imposed by any other relevant authority. This is a very broad exclusion and if it were not for a failure at some time in safety then you would be unlikely to need a liability policy. If the client takes safety procedures with the same cavalier approach as they do with their insurance, this story is going to have a very bad ending.  When it does it will be Brand Insurance that is painted as the villain.  By the way, this new exclusion only came in from January 1, 2017. I would be interested how much notice the insurer has given to renewing clients of this major change.

I do not want to bore the reader but I am sure you get the picture.

But before I go, I would add a couple more points. I am not sure what the limit of coverage is for the “cheap” policy. My guess it is half or even a third of the broker policy.

Nearly there readers! I question the role of the regulator and government in all of this. Why do we allow the public to purchase a policy that really offers scant protection. What of the customers of this business person who think that he has liability cover if something does go wrong. They too are going to be in for just as big a surprise and again Brand Insurance will suffer.

All this is why I have started a campaign to Make Insurance Great Again. This “cheap” policy is certainly NOT great. I would not recommend it to anyone.

I wonder if this new client of the “cheap” insurer would understand what I have just written here?. More importantly, I bet the call centre person who sold the policy wouldn’t.

Brokers out there, please note this “cheap” insurer is on LMI PolicyComparison.com and if you are confronted with this sort of situation, you can print off a comparison of the features and benefits in seconds showing the vast differences between the policy you recommend and theirs. This may help explain the huge difference in price that some new entrants offer to win new business.

I end with my often heard plea to the business owners and managers out there. Insurance is NOT about price. It is about getting the right ADVICE to provide good PROTECTION to your business and to you and your family. At the end of the day so much comes back to you as a personal risk that you are accepting when you get the wrong insurance.

There endeth tonight’s rant.

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2 Articles caught my eye today

There were two articles that I looked at today with mixed feelings.

The first suggested that 50% of claimants were ‘dodgy’ and inflated their claim. Having handled claims for over 45 years, yes there are some people that do exaggerate claims but 50%. I really do not think so.

It is my experience that people go in conservatively so that the claim goes through quickly and with as little fuss as possible. This goes for men, women, professional or blue collar.

The trouble is with so many insurers now is that everyone is dodgy until proven innocent which could in fact be exasberating the whole issue.

On the otherside of the coin, 25% of the people surveyed when I did my doctoral thesis, stated that they believed that insurers and their loss adjusters slowed down the claim payment so that they could offer a lower settlement.

In an industry that is supposed to be based on Utmost Good Faith all of this is really quite distressing.

The second aritcle confirmed my worst fear and that is that more and more small business owners are going direct.

Insurance is so complex despite the commodiasation of insurance products but this constant focus on price over protection is going to really hurt brokers and the industry as a whole, not to mention Insureds, communities and our ecnonomy.

All of us in the insurance industry need to provide genuine advice to the customer on risk management and proper insurance protection.

I feel like a bit of broken record on this one but perhaps suveys showing the move away from brokers may prompt more to focus on the advice model.

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Section 54 of the Insurance Contracts Act and its relevance to new US and UK ban

“New provisions from the UK government means that those travelling to the UK on a flight originating from any country on the banned list will not be permitted to bring personal electronic devices (PEDs) larger than 16cm in length, 9.3cm in width and 1.5cm in depth (or thickness) into the cabin, needing to place these items in their checked luggage instead. The US does not give specifications for the PEDs banned from flights but requires any device larger than a cell phone or smartphone to be placed in checked baggage.”

It is not uncommon for a Travel Insurance Policy to exclude damage to “Luggage and Personal Effects” that are checked into cargo hold. However, with recent bans being put in place by the US and UK whereby flights to certain Middle Eastern countries have banned any PED’s in any carry on luggage, forcing travelers to check in these devices to the cargo hold.

One such exclusion is worded as follows:

your valuables or their accessories are checked in to be transported in the cargo hold of any aircraft, ship, train, tram or bus (including any loss from the point of check in until collection by you from the baggage carousel or collection area at the end of your flight, voyage or trip);

What does this mean for the Policy holder, forced to check in their items?

Section 54 of the Insurance Contracts Act states that the insurer may not refuse to pay claims in certain circumstances, including where:

  • The act was necessary to protect the safety of a person or to preserve property.
  • It was not reasonably possible for the insured or other person not to do the act.

If the airline gives you no alternative other than placing the device in checked luggage, then Section 54 of the Insurance Contracts Act should prevent the travel insurer from rejecting your claim on those grounds.

A list of countries affected by the ban for both the US and UK can be found here: https://www.finder.com.au/us-and-uk-in-cabin-laptop-ban

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Blog question – Embargos

Over the past 24 hours, I have had a number of questions regarding Embargo’s on insurance policies.

My son, Steven, recently posted a YouTube video explaining Embargos and I would refer those interested to this. Which can be viewed here: https://www.youtube.com/watch?v=HL5G6ICAnfw

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