Take care on reducing coverages

As the team at PolicyComparison.com go through new policies and update, they bring to my attention any changes that gives them concern.

What is being noticed is, at the same time rates are increasing in many classes of general insurance,  some new and/or broader in their effect exclusions are being introduced and that these could easily be missed.

One such change has been the introduction of a sexual molestation exclusion in a Medical Malpractice policy. This could leave an Insured and their broker exposed if the change was not first identified and then communicated to the Insured.

I therefore continue to urge brokers to use LMI PolicyComparison.com each and every renewal and when you quote new business, run your eye over the report. It saves you heaps of time and protects your client and your own professional indemnity exposure.

The same goes if you hear of a new policy. LMI PolicyComparison.com hold a comparison on the site between the old and new policies for a minimum of 3 months and we highlight the areas of change. Another time saving benefit of the service.

Finally the team produce a list of changed policies every month so you can keep abreast of the changes in the market. Typically, this runs at over 1,000 policies a year. If you are not on the mailing list for the LMI PolicyComparison.com update please let me know and I will have you added immediately.

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Blog Question: Territorial Limits under a Combined General Liability (CGL) policy

I received this question overnight.


Hi Allan

I follow you on LinkedIn and find your articles very informative and whilst I’ve never had to ask you a specific question I’m hoping you may be able to shed some light on the following.

I have a client who imports Underground Conveyor Chain Equipment used in Underground Coal Mines from the USA and my concern is regarding the General Liability Insurance territorial limits which excludes the USA.

I’m currently remarketing this account and the new insurer has advised as the insured is Importing (not Exporting) there is no issue regarding the territorial limits although these would remain as “Worldwide Excluding USA and Canada”.

My concern was if the insured imports something from USA which causes injury or damage and the insurer tries to blame the manufacturer however I’ve been advised the claim by a third party would be against the insured not the manufacturer.

If you could please provide your thoughts on this issue it would be greatly appreciated.   


Mark [surname and email provided]

My response was:

Hi Mark

Thanks for your note.

As I see it, I agree with the underwriter. Under current Australian law, the Insured is deemed to be the manufacturer when they import the product. [Competition and Consumer Act 2010 (previously the Trade Practices Act 1974)]

If the product in turn is only being used on Australian mines (or anywhere that the territorial limits apply then the cover you have in place will, subject to the limits,  terms, conditions, and exclusions of the policy, protect the Insured.

What I am saying is that the territorial limits apply to the location of the loss, damage or injury not the point where the product is manufactured.

After the Insured has been fully indemnified, the issue of the origin of the product then becomes an issue when there is a recovery to be made and I would have thought that it would be better and easier for the insurer using their right of subrogation to achieve a recovery from a US company over say a supplier from say China, India or Indonesia or other countries with significantly different laws and regulations than Australia.

I hope this helps and puts your mind at rest.



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Well done Chubb and Lockton on no longer selling Carry Guard (gun) insurance

I would like to add my support for the decision taken by insurer Chubb Insurance and insurance broker Lockton to no longer support the National Rifle Association (NRA’S) Carry Guard insurance program in the United States which did provide liability coverage for NRA members who use their fire arms in self defence.

This will leave a gap in coverage as most of the home policies I have reviewed do not offer this coverage.

This is another case in a long history for the insurance industry where they have shown a social conscience and used their influence for good.

Well done to both organisations.

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Product Safety Australia – Recalls 17 January 2018

This week’s product recalls includes the following:

Jetpilot Australia Pty Ltd — The Cause Kids Neo Vest Personal Flotation Device (PFD)

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Honda Motor Co. Ltd — GL1800 Goldwing Motor Cycle

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Le Rose Nominees Pty Ltd — Fruit Mince Tarts

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Tassal Operations Pty Ltd — Tasmanian Smokehouse Australia Sliced Smoked Salmon

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Murray River Organics Pty Ltd — Coconut milk powder non-organic / non-GMO

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ABC Sales & Marketing Pty Ltd — Mamee Monster Rice Sticks vegetable flavour 6 pack

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Golden North Pty Ltd — Frozen icecream – various flavours and sizes of brands Golden North, Black & Gold, Country Style, Foodland and Simple

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BMW AG — C Series – C 650 Sport/ C 650 GT, F Series – F 700 GS/F 800 GS / F800 GS Adventure, R nine T Scrambler

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FCA Australia Pty Ltd — 2010 (DJ) Dodge RAM 2500 Pickup and 2010 (D2) Dodge RAM 3500 Pickup

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FCA Australia Pty Ltd — Vehicle Recovery Strap supplied with 2014 – 2018 (KL) Jeep Cherokee Trailhawk

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Linley Valley Pork — Thai Coconut and Lemongrass Pork Loin Roast

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Marine Power International Pty Ltd — Mercury Diesel 3.0L 225HP and 265HP Sterndrive marine engines

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

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Product Recalls Australia – 31 October 2017

This week’s product recalls includes the following:

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Product Recalls Australia – 26 September 2017

This week’s product recalls includes the following:

Knog Pty Ltd — Knog Frog Strobe Bicycle Light

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Mazda Australia Pty Ltd — Mazda BT-50

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Cyclingdeal — Road Mountain Bike Bicycle Cycling Adult Helmet

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Lenoxx Electronics Aust Pty Ltd — Electric Blanket

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Product Safety Recalls Australia – 06/06/2017

Some of this week’s product recalls includes the following:

Sunbeam Corporation Pty Ltd — Sunbeam Sous Chef™ Stir Multi Cooker; Model MU3000

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Mercedes-Benz Australia/Pacific Pty Ltd — Mercedes-Benz “CLA” and “GLA” class passenger vehicles

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Isuzu Australia Limited — NQR series vehicles

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Wens Bros Trading Pty Ltd — Elastic Luggage Straps

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Wens Bros Trading Pty Ltd — Assorted Children’s Toys

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

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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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What happens when the V8 super cars knock on your door?

Dear Prof. Manning,

I find myself in a difficult situation and have not been able to get any clear guidance, except to contact you. I’ll try and keep it short mainly because I am now thoroughly confused and overwhelmed.

We live in Newcastle, our home is an 1890’s Terrace listed on the State Heritage Register.

We have the V8 Supercar Race touted to be heading up our Street. The track will be 3 meters from our home.  This has never been done before and all the National and International Standards have based their health and safety recommendations on a distance of 30 meters from the track, not 3 meters. I have not been able to get clear information of how Supercars will “adapt” the depth and type of safety barriers, to protect our home, given we are so close to the track.

Supercars and Destination NSW have told us very little except there will be no compensation and that any insurance will be up to us, individually. Council just don’t answer emails.

I’ve spoken to our Home insurer (NRMA) who said our policy still stands but that damage to our home will be done on a “case by case” basis as they have nothing to compare it to. They can’t put anything in writing and they won’t guarantee that damage will be assessed in favour of cover. They then referred me to The Insurance Council, who straight away, sent me on to a phone number for National Insurance Broker register, who then sent me onto The Markey Group in Newcastle, who then gave me advice to speak with LMI Group.

So far, no one can give me any guidance on protection for my Home or the people in it, during construction of the race track which will be extensive or during the days of the race every year. I have not been able to get any quotes, no guarantee’s and very little constructive advice because as they all said, they have nothing to base their advice or cost on and no one is sure who to send out to us, to do a quote. Therefore, who would they send to give us a loss assessment if there is damage and then what would they base that assessment decision on, if this situation has no comparison? Will this car race situation increase the cost of our insurance policies in the future? No answers to these questions either.

Would you have any advice? If we are to pay for an assessor I’d like to know they were the right person to ask. There are many others in our situation.

Kind regards

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Product Safety Update – 06/01/2017

This weeks product safety recalls include:

Coles Supermarkets Australia Pty Ltd — 200g Coles Beetroot Dip

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Performax International — General Motors Chevrolet Silverado, GMC Sierra

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