Looking for experienced policy drafters

Every part of LMI is growing and we are always on the look out for good people with technical skills in claims, underwriting and risk management.

One part of the organisation that continues to grow is our policy drafting area.  We have approached on a great many projects already this year.

The experts we are after include those with the skill and experience to draft wordings and or who are experts who can sign off on legal and compliance.

If you have the expertise and are looking for either project, part time or full time employment please send your CV through to me. Please advise the classes you are comfortable in and the time you are happy to commit to.

From our side, the existing team work in a collaborate supportive team environment added by the PolicyComparison, LMI Legal and LMI Claims teams.

My email is allan.manning@lmigroup.com. All applications will be treated with complete confidentiality.


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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.




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LMI Mining attending claims due to Cyclone Debbie

There has been a good deal of news regarding the effect of Cyclone Debbie on the supply of coal to the world. We at LMI have been keeping a close eye on this and assisting many mining clients to calculate their business interruption losses as a result of the damage.

What many readers do not know, is that LMI have a specialist mining division that specialises in mining claims, risk assessment, policy and endorsement drafting and review.

Headed by Murray Rowley, with 50 years experience in mining losses, and backed by a team of on staff qualified mining engineers and accountants, the team are handling several losses arising from the closure of the rail lines in Queensland due to damage that occurred during Cyclone Debbie.

I myself, am proud to be part of this team, having handled mining losses since the mid 1980’s including some of the world’s largest claims. My MBA Thesis was on the Closure of the Bougainville Mine. My experience, however, is far outweighed by Murray’s.

Mining, perhaps more than any 0ther industry, requires a great deal of knowledge and experience. There is often a great deal of money at stake and it is certainly not an area for the generalist or amateur. While Murray and his team are based in Queensland, he and his team have and continue to handle losses all around the world due to their extensive expertise in this industry.

LMI Mining is just one of the specialist divisions we have at LMI that provide expertise for specific industries such as tourism, packaging, manufacturing, energy risks, motor trade, crop, retail, and property management.

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Blog question: Do you have this endorsement for the Industrial Special Risks Policy

Hi Allan,

Was attempting to locate a copy of the following endorsement wording; REPELXB4. Thank you for any assistance possible.


Darren [surname and email provided]

At LMI, as part of our policy library, we retain a copy of all the Industrial Special Risks (“ISR”) Policy endorsements we know of along with what we refer to as the Coach’s Comments which is our thoughts on the endorsement, where it should be used, etc.

It was therefore possible for me to provide the wording and a bit of history on the endorsement.(see below to Darren).

a) As we were getting so many of these requests we have this available on line through our LMI PolicyCoach service which has two main functions, The first is to assist develop a meaningful slip with advice on coverage, limits and sub-limits of liability and the endorsements to consider to tailor the policy to the client’s needs;


b) a library of all the endorsements known to us.

I and my colleagues have written 150+ endorsements for the Mark IV and Mark V ISR policies to ensure that it remains relevant in our ever changing world of risk.

Hi Darren

This is the first version of the infectious diseases endorsement first written for the Mark IV ISR in around 1987.

It has typically been superseded due to September 11 and Terrorism with most insurers replacing it with their own version.

Here it REPELXB4


Loss as insured by the policy resulting from interruption of or interference with the Business directly or indirectly arising from:

(a)   infectious or contagious disease manifested by any person whilst at the Premises;

(b)   closure or evacuation of the whole or part of the Premises by order of a competent public Authority consequent upon vermin or pests or defects in the drains or other sanitary arrangements at the Premises;

(c)   the outbreak of a notifiable human infectious or contagious disease occurring within 40 kilometres of the Premises;

(d)   injury, illness or disease directly caused by the consumption of food or drink provided on the Premises;
(e) murder or suicide occurring in or at the Premises; or

(f)   threat or fear of violent damage to the Premises and/or injury to persons therein.

Shall be deemed to be loss resulting from Damage to property used by the Insured at the Premises. Perils Exclusion 7(d) and Property Exclusion 2(e) shall not apply to the cover granted by this endorsement.





Darren replied

Thank you Allan, appreciate your prompt reply and hope you are going well.

Have a good day.



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Blog Question: Schedule v Certificate of Currency v Certificate of Insurance

English writer and dramatist William Shakespeare quote. What's iI received the following question from someone new to general insurance.


  • Certificate of insurance
  • Certificate of currency
  • Schedule

What is the effective difference (if any) between these terms?


Oliver [surname and email provided]

Hi Oliver,

I could write a book on all that is going through my mind in preparing to reply to your question.

View full post…

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Blog Question to better understand co-insurance under an Industrial Special Risks Policy

Hi Allan,

Thank you for your very informative article below:


I am regularly asked about the Asset Schedule by my team members

  1. “First a test for under insurance. Under a standard Mark IV or Mark V ISR property claims are tested with  85% co-insurance. whereas business interruption is tested with 100% average or co-insurance.”
  2. If the insurer is immediately looking at the Asset Schedule as a test of co-insurance, does the co-insurance test apply to the total declared value across all situations or is it applied specifically to a line item, for example stock at situation 1?
  3. The client may be correctly declaring situation 1 & 2 at day one but for operational reasons relocate plant, machinery and stock from 1 to 2.
  4. As per your article I have encouraged staff to get the sub-limits and combined limits correct to fully protect the Insure but have seen some very “Business Package” approaches adopted by insurer claims staff to the items in the Asset Schedule


Any clarification you can give would be greatly appreciated.

Kind regards,

Malcolm [surname and email provided]


When it comes to insurance, advice is much more important that price!

When it comes to insurance, advice is much more important that price!

My reply was as follows.

I answer each of your questions using the same numbering system below.

  1. You are correct, the standard Mark IV (and Mark V for that matter) Industrial Special Risks (“ISR”) policy is subject to this level of co-insurance or average. Although, LMI has worked with some brokers to have this changed to 80% on each Section (that is Material Damage, Section 1, and Consequential Loss of Profits, Section 2) of the Policy in line with most companies’ business packs.
  2. The old Mark III version of the ISR had the test across all locations but there was mass under declaration which was so rampant that the Insurance Council of Australia (“ICA”) and the National Insurance Brokers Association (“NIBA”) worked together and moved the test to “at the Situation”. That is, the test for Material Damage, under the Mark IV, is at the situation where the loss or damage occurs but across all locations for BI as there can be interdependence between locations. To compensate Insured’s for this move, the tolerance for being under insured moved from 90% to 85%, where as you said, it remains in the standard ISR Mark IV. All this occurred back in 1987.
  3. This is one of the reasons why the test for co-insurance is what is known as a “Day 1 test”.  That is, the test for average / co-insurance is on the first day of the Policy Period and not the date of the loss. This means that, so long as the changes are picked up at renewal, there should be no problems. If not co-insurance can and will be applied. This is an important point that you are right to remind your team about and for them in turn to discuss with their clients.
  4. This shows a lack of training in that particular insurers claims area. The drafters of the Mark IV and Mark V ISR policies showed great social conscience and thought to protect the client and we often see that the policy is not read by an adjuster or claims officer and but for the diligence of the broker or claims preparer the client would be disadvantaged and under paid.

Emergency2If you or your team ever get stuck on any of this, I or any of the LMI Claims Team are here to help. Although we do prefer to get involved from the start of a claim than when it goes pear shaped.

greenWhen it comes to drafting issues, I am sure you have my ISR book in your office and this will assist with examples and the like on the issues we have discussed.

I hope this all makes sense.



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Insuring Trusts

Turn Knowledge into PowerFollowing on this week’s theme for the blog of who to name on the policy, I focus today on trusts. I do this before I tackle liability and financial lines policies where trusts are common place.  The important issue to remember is that a trust is not a separate legal entity, it is a relationship where the trustee is under a legal obligation to administer trust property for the benefit of the beneficiaries or for a specific purpose.

Any dealings and litigation are brought by and against trustees in their representative capacity on behalf of the trust. I have seen many cases where say a trustee company is named as the Insured but the Insurer has refused to accept that this brings in the trust as the trustee company also does other functions and the fact that it is a trustee has not been listed as an occupation.

For this reason, I would suggest that you name the trustee company as one insured and then the same entity a second time but adding the words “as trustee of the [insert trust name in full] trust.

Finally include trustee as one of the occupations.


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Latest LMI PolicyComparisons now available

PCI homeAs an ongoing service to our valued subscribers to LMI PolicyComparison Australia, I list below the policy comparisons that have been added to Australia’s premier policy features and benefits comparison website in the last month. You can now view these comparisons at www.PolicyComparison.com.

AAMI Landlord Insurance – A01460_0214B
Achmea Australia All in One Farm Pack – AIOFP_VA2.0_1114
Allianz Farm Pack – POL065BAFI_1014
Allianz Marine & Transit Underwriting Agency Cargo Insurance within Australia (Accidental Damage) – POL615BAAM&T_0315
Allianz Marine & Transit Underwriting Agency Carriers Insurance Package – POL260BAAM&T_0315
APIA Boat Insurance – AP02679_0713E
APIA Car Advantage Insurance – AP02571_0814E
APIA Caravan Insurance – AP02576_0713F
APIA Home and Contents Extra Insurance – AP02655_0615
APIA Home and Contents Insurance – AP02580_0615
APIA Landlord Insurance – AP02611_0615
Axis Underwriting Services Residential Strata Insurance – AXISRESPOL_0115
Berkley Insurance Australia Real Estate Agents Professional Indemnity Insurance – BIA-RealEstatePI_1014
Brooklyn Underwriting Strata Insurance – Strata_1014
Calliden Insurance Business Travel Insurance – 14PDSCALBTA01_1214
Calliden Insurance First Option Business Insurance – CASL-GLA-FOP_0415
Cemac Pty Ltd Contractors Plant and Machinery and Liability Policy – CEM-CPML_1212
CFC Underwriting Esurance CPM Policy – CFC-CPM-AUS_V1.8_0714
CGU Insurance Ltd Padlock Insurance Policy – CV476_REV2_1014-CID0192_REV4_1214
CommInsure Home Insurance – Defined Events – CIL1516_0515
CommInsure Home Insurance – Landlords – CIL1516_0515
CommInsure Home Insurance – Optional Accidental Damage – CIL1516_0515
Dual Australia Pty Ltd Corporate Travel Policy – DUALCTPDS_0315
Dual Australia Pty Ltd Professional Indemnity Design and Engineering Policy – DUAL-PI-DesEng_0814
eSentry Underwriting Annual (Run Off Basis) Construction Legal Liability & Professional Indemnity Policy – TMNF-CWA(RO)-POL2014-V1_1114
eSentry Underwriting Annual (Transfer Basis) Construction Legal Liability & Professional Indemnity Policy – TMNF-CWA(T)-POL2014-V1_1114
eSentry Underwriting Single Project – Construction Legal Liability & Professional Indemnity Policy – TMNF-CWPS-POL2014-V1_1114
Liberty International Underwriters Cyber Suite Insurance Policy – LIU-AUS-Cyber_1012
Longitude Insurance Commercial Strata Insurance – LONGCSI-03_0415
Longitude Insurance Residential Strata Insurance – LONGRSI-03_0415
Mansions of Australia Home and Contents Insurance – 13PDSMANHC01_1114
Nova Underwriting Professional Indemnity Insurance (Miscellaneous Risks BOPD) – BOPD_1214
NRMA Insurance Landlord Insurance (NSW, ACT & TAS) – G013134_0515
Pen Underwriting Annual Contract Works and Construction Liability Policy – AnnualCW_0315
Pen Underwriting Business Travel Insurance – BusinessTravel_0415
Pen Underwriting Single Project Contract Works and Construction Liability Policy – SingleProjectCW_0315
RAA Comprehensive Car Insurance – MVPDS_0315
Suncorp Metway Insurance Limited Boat Insurance – 13738_0514B
Suncorp Metway Insurance Limited Home and Contents Insurance – 12314_0514C
Suncorp Metway Insurance Limited Strata Insurance – 27877_0415A
TIO Territory Construction Insurance – Construction_0115
Vero (Australia) Household Removals Insurance – All Risks – V5431_0314A

We take this opportunity to remind you that the LMI PolicyComparison website offers more than policy comparisons. Visit the site to view our extensive policy library, Standard & Poors’ financial strength ratings, a list of alternative markets, and more. We also draft wordings and endorsements, carry out peer reviews and policy health checks.

Besides Australia, we also provide LMI PolicyComparison in New Zealand, PNG, Fiji, United Kingdom, Ireland and South Africa as a web based subscription service. Should you have any queries, please feel free to contact me.

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LMI Appointed by Talbot Underwriting Australia to Help Design and Draft Wordings

TalbotI am pleased to announce that LMI has entered into a long term arrangement to assist Talbot Underwriting Australia develop and draft a suite of policy wordings for the Australian and New Zealand markets.

Talbot Underwriting Australia’s Managing Director, Adam Matteson, and I finalised the details at a meeting last week. This sort of project really excites me, as it allows the knowledge that the LMI team gain from handling claims to be transferred back to the insurance contract, developing products that offer genuine protection in this ever changing world, written in a language the insured and the courts will understand.

A brochure setting out the broad range of products available from Talbot can be downloaded from here. Talbot Australia 09_33_01 LR

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