Product Recalls Australia – 25 August 2017

Product recalls from this week include:

For more recalls, please visit: https://www.productsafety.gov.au/recalls

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Product Recalls Australia – 14 August 2017

Product safety recalls recently include:

For more recalls please visit: https://www.productsafety.gov.au/recalls

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Increased security when travelling follow up

Following my article yesterday about the increase in security at the airport due to terrorism, I can see that others are thinking the same way as per the article shared with me here.

Airline passengers undergoing a security check

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Should Australia follow the US with Travel Pre-Approval

I caught my first flight following the upgrade of security after the latest terrorism arrests that took place last week.

I was concerned, as when I was called over for explosive testing the official tested two other people I did not know at the same time. Even though I was the first called, he wiped the swab over me last and tested us all with the one swab.

What would have happened if either had traces on them or their baggage and it was then wiped all over mine? It seemed an extremely unprofessional way of doing things which could at worst have severely delayed my travel and worst damaged my reputation if I was caught up at the same time as a terrorist.

It could be that they are just trying to look like they are doing something, but do it properly or do not do it at all.

The airport check in was, of course, a nightmare and I suggest that the government consider introducing a similar system as the United States government with a pre-approval travel system.

For those who travel frequently for business, within Australia and internationally it continues to get harder. We all appreciate the need for security but if you have say an APEC Travel Card which means you have been checked by not only our government but many within Asia, you have no criminal record and are not on any terrorism watch list then allow them to get on with their business and tax paying ability.

The benefits to government and the security system would be:

  • More revenue for government as there would no doubt be a fee to get the pre-approval. I think the APEC Card costs $700 and at present offers absolutely no value within Australia, going in or out at present. The value is in countries that honour the system.
  • It would reduce the congestion currently seen at the airport making it more pleasant for all travelers.
  • It would allow the security officers to focus on those that have not had the stringent security clearance and therefore likely improve detection.

Naturally, I would still suggest a random check of pre-approved travelers and if they were found to be carrying something not permitted they lose their pre-approval status which in itself would be reason to take care of what they take.

While security is the new norm for all our sakes, if the United States, who you would suspect would be one of the highest if not number 1 on the target list, can develop a workable solution, there have been no successful circumventing of the system that has been such to have it disbanded after many years of successful application.

This was the first of 6 flights I am to take between now and Thursday evening. Meanwhile, I am not looking forward to the rest of the week spent in airports. While I do not wish to be difficult, I certainly will not be allowing the explosive test to be conducted with others again. We will see how that goes down.

Oh, and please check your travel insurance to make sure that it has no exclusions for terrorism that may prevent a claim being made for cancellations or heaven forbid something worse.

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Another fire in one of the world’s tallest buildings

Images from social media

I posted an article back in March 2015 on a fire in a residential tower block in Dubai.

Back then, as a precursor to the terrible Grenfell Tower fire, the combustible cladding was blamed for the rapid fire spread.

Firefighters have just brought yet another fire at this tower, ironically called, the Torch, under control.  To read one of the many news articles go here.

This building is the 65th tallest in the world.

With the police in the United Kingdom predicting a charge of corporate manslaughter against council representatives and the building managers following the Grenfell Tower fire, I hope that we see an immediate end to not only the combustible cladding but all non-conforming building materials.

In the meantime, there has to be some brand damage for those who have invested in these huge tower blocks when it comes to occupancy and resale. Particularly if there is a need to replace the cladding or any other non conforming building products.

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Product Safety Recalls – 3 August 2017

This weeks product recalls includes the following:

2 AUG 2017

American Special Vehicles Pty Ltd – RAM 1500, 2500 and 3500 Trucks

Please visit: https://www.productsafety.gov.au/recalls for more product recalls

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Mansfield Awards – the movie

The Mansfield Awards for Claims Excellence hosted on the 13th July 2017 were a great success. InsuranceNEWS and LMI Group as organisers and hosts were delighted with the support received about the concept, from sponsors and from attendees.

Here is a link to a highlights video to remind those that attended what happened on the night or if you did not make it, what you missed out on. Either way, I hope you enjoy it and look forward to seeing you at next year’s event.

Special thank you to the award sponsors, Steadfast and icare. Also to our Master of Ceremonies, Martin McAvenna and Mark Doepel for the Mansfield Oration.

Details of the winners can be found at www.claimscomparison.com

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Blog Question: new exclusion on professional indemnity policies in respect of non-compliant building materials

Engineering Clown Holding Rolled Up Blueprint In A Depiction Of Unstable And Dodgy Building Practices

I recently received this email:

Hi Allan,

Further to your posts regarding issues with shoddy building products, unfortunately insurers are now seeking to exclude this risk in a very heavy handed manner.

In particular, exclusions to professional indemnity insurance for building surveyors, architects etc that removes all cover irrespective of fault.

The below clause for example is extremely onerous & removes all cover even in instances of counterfeit products, where the surveyor has been wronged just as much as anyone else. 

‘We will not cover the insured for loss, defence costs, legal representation costs or other amounts in respect of any claim, investigation or liability arising out of or in any way  connected with a Non compliant or Non conforming Building Product, or the approval, the use or installation of a Building Product in a manner which is Non compliant or Non conforming.’

Surely in these sorts of instances,  it is in the public interest to ensure that building professionals have insurance that responds to claims against them.

I was wondering what your thoughts are on this ?

Thanks, John [surname and email provided]

————————————————————————————————————————

Hi John

This is a very real and complex problem. One which I can see both sides and have sympathy for both positions.

On the one hand, it looks like an insurer who sees a bush fire or cyclone on the horizon then writes to their customers cancelling the risk. This is not good for the insurance industry but we have done it before with issues such as terrorism, Y2K and pandemics. This, of course, does not mean it is necessarily right.

The difference between property insurance and professional indemnity is that the property policy covers damage during the period of insurance and if the risk materialises and results in loss or damage during the period of insurance then the insurer bears the loss. A Professional Indemnity policy is a ‘claims made and notified policy’ and as such this allows insurers to change their risk appetite each renewal and limit risks that are emerging but have not yet fully materialised.

The Grenfell fire certainly has brought this issue to front of mind, and along with the fires in Australia and the Middle East helped identify the number of buildings globally with the problem of combustible cladding.

With professional indemnity, it is my experience the limits are often way too low when compared to say public or products liability and the risks professionals take on.

Therefore, I would have thought that this genuine risk could have been addressed by either a sub-limit and or higher premium for those involved in this industry rather than making the policy a Clayton’s policy, that is a policy you have when you do not have a policy.

Having said that, I do not think the insurance industry should be picking up the tab for professionals or builders who have knowingly used or allowed such products to be used, to the determent of the consumer and or to feather their own nest.

All professionals need to do their job properly. Lord Atkin rightfully set the position that we still use today in Australia when he said:

At present I content myself with pointing out that in English law there must be, and is, some general conception of relations giving rise to a duty of care, of which the particular cases found in the books are but instances. The liability for negligence, whether you style it such or treat it as in other systems as a species of “culpa,” is no doubt based upon a general public sentiment of moral wrongdoing for which the offender must pay. But acts or omissions which any moral code would censure cannot, in a practical world, be treated so as to give a right to every person injured by them to demand relief. In this way rules of law arise which limit the range of complainants and the extent of their remedy. The rule that you are to love your neighbour becomes in law, you must not injure your neighbour; and the lawyer’s question, Who is my neighbour? receives a restricted reply. You must take reasonable care to avoid acts or omissions which you can reasonably foresee would be likely to injure your neighbour. Who, then, in law, is my neighbour? The answer seems to be – persons who are so closely and directly affected by my act that I ought reasonably to have them in contemplation as being so affected when I am directing my mind to the acts or omissions which are called in question

Donoghue v Stevenson, 1932 SC (HL) 31 (26 May 1932).

What the exclusion is effectively doing is saying to these professionals that there is a very real personal risk to you if you allow non-compliant building materials.

This very real risk is one that I would not like to take on myself either as a professional or as an underwriter. As an underwriter I would need some comfort from the Insured that they have not knowingly allowed the products to be used. If there were allowed knowingly then this I would suggest would be a known circumstance that would need to be declared at next renewal in any event.

At the same time, building owners, whether they be commercial, industrial or domestic, may be left holding the bag if their own insurer does not cover the replacement which is in itself not covered and nor does the builder’s nor the professionals involved.

There are so many areas in the claims we are handling at LMI Group where we are finding non-compliant building materials. These include:

  • Electrical wiring and cabling,
  • Electrical switches,
  • Rain heads and some other plumbing fittings,
  • Products containing asbestos, and of course,
  • Combustible cladding and or insulation.

At this stage I do not believe the exclusion is universal and each insurer will be making their own decision on it.

I hope this helps.

Regards

Allan

 

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NSW Government continue to bend the facts to hide their ineptitude.

Like all rate payers in New South Wales, I received this (image) flyer from the New South Wales Government on the emergency services levy.

I cannot accept that deferring the levy is going to help those that are currently bearing the cost of funding the fire and emergency services.

Fact 1: everyone in New South Wales benefits from having an efficient, well funded, well trained and equipped fire and emergency services.

Fact 2: the men and women that do this work deserve our full support for doing some of the most dangerous and stressful work in our society to protect all of us and our property.

Fact 3: it is completely unfair that only a percentage of the community bear the bulk of the cost and not everyone.

Fact 4: by deferring the changes, it means that those that insure go back to bearing the brunt of funding the fire and emergency services.

Fact 5: this, in turn, means that to avoid paying the levy people do not insure or do not insure fully. Putting an even greater burden on the prudent and risk averse who insure fully.

Fact 6: Currently, the Fire and Emergency Services means that many insurance policies are 40% higher in New South Wales than say Victoria. If you add the triple taxation of Goods and Services Tax being imposed on the Fire and Emergency Services and then the State Government Stamp Duty on insurance premiums, Fire and Emergency Services Fees, and the GST component any fool can see the inequity of having the levy on any product or service.

Fact 7: Every single study on Fire and Emergency Services shows that the fairest way for the community to fund the service is to have as broad a tax base as possible. This is property rates where everyone pays, whether you are a tenant or an owner occupier.

Fact 8: In 2012, the New South Wales Government issued a White Paper and called for input from the community on moving the levy away from insurance, rightly pointing out that it was inequitable in the current form. This means the NSW government have had 5 years to get this right as well as the benefit of consulting with all the other mainland states who successfully made the transition from insurance to property rates.

Armed with these facts, I am sure that you will agree with me that this is a monumental and inexcusable balls up by the New South Wales government.

I am pleased to see the issue is getting some time in the Sydney Morning Herald  which sheds more facts on the waste involved here and how the new levy was so wrongly calculated. For a home owner who fully insures it should logically have gone down with the broader tax base.

We cannot put the toothpaste back in the tube but what we need is some honesty on the part of the Government that they and only they got it wrong and secondly an honest time line as to when the reforms will be implemented.

My guess is that it is in the too hard basket for this government, that is, it is beyond their ability and that we may be stuck with it for another generation.

Of course, this is not the only issue this government has failed us on. The water issue from the Murray Darling is a complete story of failure in itself.

We all deserve better!

 

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