Product Recalls Australia – 18 April 2018

This week’s product recalls includes the following:

Gardenia Home Garden Décor Pty Ltd – Bio Ethanol Fireplaces – various models

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Porsche Lizenz- und Handelsgesellschaft mbH & Co KG — Porsche Wooden Car Blue/Black

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GM Holden Ltd — SAAB 9-3 and SAAB 9-5 MY 2006-2011

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Toyota Motor Corporation Australia Limited — Toyota Kluger

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Daimler Truck & Bus Australia Pacific Pty Ltd — Freightliner Trucks

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Lovesac — Kidsac

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Polaris Sales Australia Pty Ltd — ACE 500 / 570 / 900 single seat vehicles (MY2017-2018)

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Polaris Sales Australia Pty Ltd — Polaris RZR 570 side by side vehicle (MY2017-2018)

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Polaris Sales Australia Pty Ltd — RZR XP Turbo and RZR XP4 Turbo side by side vehicle (MY2016-2018)

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Polaris Sales Australia Pty Ltd — RZR XP 1000 and RZR XP4 side by side vehicle (MY2014-2018)

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Polaris Sales Australia Pty Ltd — RZR XP 1000 and RZR XP4 side by side vehicle (MY2014-2018)

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Daimler Truck & Bus Australia Pacific Pty Ltd — Mercedes-Benz Actros & Arocs Trucks

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

 

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RIMS 2018

LMI at RIMS 2018. Left to right, Steve Manning, Director; Murray Rowley, Head of LMI Mining; self; and Shirley Shi, LMI Forensics Division.

Four of us from LMI Group have traveled to San Antonio in the US for the 68th annual RIMS (Risk Management Society) Conference.

Several of us have been going for a number of years to stay up to date with our learnings and to gather ideas on ways we can provide a better service to our customers.

While I have been privileged to present at the conference, this is our first year having an LMI booth in the Market Place.  Today was the first day of the conference proper and we are heartened by the reaction we have generated.

Very early on, a broker said that the best thing she will take away from the conference is our new book on Business Interruption tailored to the US style wordings. Then to finish the day, we had a company spend over 1.5 hours at our stand understanding our on line products of BIcalculator.com, PolicyComparison.com, RiskCoach and ContinuityCoach.com. The CEO of the firm ended with the words, “these products have made the conference for me”. What a wonderful way to end day 1 of the trade show.

Others during the day constantly commented that they had never seen such a great suite of services to support insurance brokers.

We took turns on the stand so we could attend sessions and a couple of us also helped pack care packages helping the Soldiers’ Angels group.

Tonight, we have been invited out by Gallaghers when they heard we were free. What a kind gesture on their part.

All in all, while day 1 is far from over, it has been a promising start for our push into the massive US market.

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Staying Safe

The LMI Melbourne office was originally built as a small factory and then utilised as a warehouse and later partially converted to offices before it was acquired by LMI as its Melbourne base.

Over the years, the building has been slowly refurbished, including the removal of all asbestos and being in the risk and insurance business, we have been careful to always comply with the best safety standards as well as ensuring the building is as energy efficient as possible.

This has involved so many aspects such as solar, and of course, insulation of the building. When upgrading the insulation in the last part of the building, fortunately we have steered well clear of any foam or foam paneling in any of the construction. I find in my research that I’ve done along with several of our customers in the UK particularly, I would certainly be removing any type of foam paneling whether this be EPS or polyethylene cladding.

I was concerned when we did a face lift on the front of the building, where the architect had requested aluminium paneling for an awning and encased existing concrete columns that this may include foam but i’m not only relying on the specifications of the material but in physically inspecting the back and side of the columns I was relieved to see that there was no foam in behind the aluminium.

The purpose of my reporting all of this is just to remind any home or business owners that may be considering remodeling to seriously consider the insulation that you are using and for those with any foam panel insulation to identify the type used and consider its removal and/or the fire detection and prevention in place.

This is not only for the safety of families and employees, but I strongly suspect that the insurance industry will take an even tougher attitude to paneling of all types moving forward.

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Yet another recall: this one should not be ignored!

It is estimated that around 80,700 pool fence latches sold through Bunnings Warehouse stores across Australia have had to be recalled. This is following an investigation which found that they do not comply with the required Australian Safety Standard.

With young lives at risk, this is clearly a very serious safety issue, and so I join the request that any and all owners and residents of properties with pools that have been fitted with the product need to take urgent action and have the locks replaced.

Every home, unit, flat or apartment owner and or occupier ought to ensure their pool has a compliant latch. Failure to do so may well result in them being be held liable if a drowning incident occurs.

It is also a timely reminder that home contents insurance has the added benefit of, in a typical good quality policy, $20,000,000 of public liability cover which would protect them as an occupier. Having this coverage of course does not mean that reasonable steps to prevent injury or damage is not taken out, so please check your pool gate latch and take it back and have it replaced if it is the one being recalled.

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April is Distracted Driving Awareness Month in the US

I have posted articles on the very real issues arising from drivers being distracted on their phones while driving. As such a headline which read 3 Ways the Insurance Industry Can Kick Distracted Driving to the Curb, caught my eye.

Having read the article by  assistant editor, Will Jones, of IA’s (Independent Agent) on-line magazine, I thought it had some excellent points and had equal relevance to our part of the world.

As such I reproduce Mr Jones article here:

3 Ways the Insurance Industry Can Kick Distracted Driving to the Curb

Driver distraction is a leading cause of vehicle accidents. Nearly 80% of vehicle crashes involve driver inattention, according to research conducted by the Virginia Tech Transportation Institute.

Eating and drinking, talking to a fellow passenger, applying makeup, programming a GPS or navigation system, or simply adjusting the radio all qualify as distracted driving. But using a cellphone while behind the wheel is undoubtedly the biggest cause.

According to a study conducted by Cambridge Metrics Telematics (CMT) last year, phone distraction occurred in 52% of trips that resulted in a crash—an unsurprising statistic considering that same study found that 75% of drivers see other drivers on their phones every day.

Joan Woodward, president of the Travelers Institute and executive vice president of public policy for Travelers, has observed a dramatic spike in fatalities on the road as a result of distracted driving in the last couple of years. “That got our attention,” she says.

According to the latest annual Travelers Risk Index, 40% of drivers polled admitted they have been involved in an accident or almost caused an accident because of their own distracted driving. “Those numbers are self-reported, of course,” Woodward says. “But people are saying that they’re doing this more and more.”

And the increase is making everyone nervous: 63% of drivers are more afraid of distracted drivers than drunk drivers, according to the CMT study.

Because of national education campaigns and law enforcement, drunk driving is both socially stigmatized and punishable with hefty fines, disqualification and imprisonment. In 2018, however, the same cannot be said about distracted driving.

According to Sam Madden, chief scientist, CMT, there is no doubt about the source of the first rise in road fatalities the insurance industry has noticed in a long time. “We see alcohol-related deaths are down, the educational campaigns around alcohol are working, and yet the number of fatalities is going up for the first time,” he says. “We certainly believe that’s a result of distracted driving.”

Penalties for distracted driving vary by state. Most levy fines under $400, while five states do not have any laws against it at all. And if law enforcement isn’t going to put the brakes on distracted driving, “the insurance industry really should be at the forefront of raising this as an issue,” Woodward says.

April is Distracted Driving Awareness Month, which makes now an ideal time to bring up the issue in conversation with your clients. Here are three ways that the insurance industry can kick distracted driving to the curb:

Education. Few drivers are aware that texting while driving at 55 mph is the equivalent of driving the length of a football field with your eyes closed. In an effort to change people’s attitudes about the dangers of distracted driving, the Travelers Institute® Every Second Matters initiative provides statistics, conversations starters and quizzes that insurance professionals can share with their clients.

“Our campaign is focused on the social norm—to change people’s awareness and to say that this really is not OK,” says Woodward. “It’s just not OK to text your way all the way to work or always be on the phone while you’re in the car.”

“This is not a problem that is just going to go away on its own,” Madden agrees. “As a society, we just have to accept that it is not OK for thousands of young people to die every year because of smartphones. We have to make people aware of it.”

Technology. Paradoxically, on the same device that facilitates most distracted driving, apps are becoming available that help drivers educate themselves about the amount of time they spend distracted when they’re behind the wheel—data which insurers can also incorporate into rating tools.

CMT’s DriveWell app does exactly that. “When you put this app in peoples’ hands, it makes them realize that they actually are engaging in distracted driving,” Madden says. “Results show that within a couple weeks, people reduce distracted driving behavior by 30% or more on average.”

“We have many small independent agencies that are offering a smartphone telematics program through us that is branded through their agency,” Madden adds. “It’s not always about moralizing with your customer—it’s about saying, ‘Did you know that if you’re a good driver, you can actually save money on your insurance?’”

Employers. One of the most common reasons drivers use their cellphones while driving is due to work. According to Travelers, 43% of employed American adults who drive admit to making work-related communications such as emails and calls while driving. And 27% say their boss has called or texted them even though they knew they were driving.

In a survey of Travelers’ customers, only 27% of commercial clients reported having a formal policy on distracted driving that was strictly enforced.

“We’re urging all our commercial lines clients to have a very strict policy in place for their employees about distracted driving—not only to have it, but to put it into practice,” Woodward says. “That’s really the key to curbing some of these commercial auto losses.”

Will Jones is IA assistant editor.

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Surely company’s know that the truth will come out

Yesterday I was delivering training sessions with one of the topics covered, Product Recall Insurance.

Besides explaining the obvious need for this cover I went through the risk of a company not doing the right thing and quoted the forced recall of vehicles fitted with faulty Takata airbags (refer my post of February 28) and the brand damage it does to those car manufacturers that do not do the right thing and recall their vehicle.

Another topic covered in detail was the role and responsibilities of directors and officers under the Australian Corporations Act as a section of the course on Directors & Officers Liability Insurance.

I covered off on Section 232(2) of Corporations Act 2001 (Commonwealth) which refers to acting ‘bona fide’ in the interests of the company in the performance of the functions attaching to the office of director.  A breach of the obligation to act bona fide in the interests of the company involves a consciousness that what is being done is not in the interests of the company, and deliberate conduct in disregard of that knowledgeMarchesi v Barnes (1990) VR 435.

Short term profit is clearly NOT the sole test for acting in the best interests of the company.

Failure here can again lead to brand damage for the organisation but also the directors themselves. Again, it was stressed that not acting in good faith to all shareholders is not something that can be hushed up and that the truth will ultimately come out. This typically results in a worse outcome than if people acted honestly and did the right thing.

I also pointed out that Section 199B of the same Act states a corporation cannot insure for: willful breach of duty and or improperly using their position to gain an advantage for themselves or anyone else or causing detriment to the corporation. NRMA v Whitlam [2007] NSWCA 81

It was therefore disappointing to see on the news on my return home one of the lead articles was that Thermomix’s Australian distributors had allegedly failed to notify a fault in their product and had continued to sell and ship the product allegedly knowing that it was faulty and or could have caused injuries. How anyone could do this is beyond me.

In the interview of a senior representative of the company suggested that this was a mistake and that they will learn from it and they are sorry for it. I really struggle with this response.

It is similar to the cricket debate of late. To me bowling a bouncer when you meant to bowl a yorker is a mistake. To deliberately and consciously go out to cheat is not a mistake, certainly not a simple mistake.

I also question whether the guilty parties are sorry for their deception or the fact they were caught out.

All I can say to end is two things. Not only when you are a director, an executor of a will or dealing with insurance where you are required by law to act with utmost good faith, it is simply good practice to act honestly and treat others as you would like to be treated yourself.

Secondly, there are many good people out there and this combined with the ease and power of social media, the truth will come out in the end.

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Product Recalls – 11 April 2018

This week’s product recalls includes the following:

Hino Motor Sales Australia Pty Ltd — MY 2013 Hino 300 Series

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FCA Australia Pty Ltd — 2014-2016 (JK) Jeep Wrangler and 2014-2015 (LX) Chrysler 300

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Entyce Food Ingredients Pty Ltd — Creative Gourmet Pomegranate Arils 180g

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Out of the Box Innovation and Design — USB Charging Station

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Inghams Enterprises — Chicken Breast Tenders Sweet Chilli 400g

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Origo & Co Pty Ltd trading as Daiso — Men’s Toiletry Products

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Origo & Co Pty Ltd trading as Daiso — Skin Care Products

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Origo & Co Pty Ltd trading as Daiso — Assorted Sunglasses

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Origo & Co Pty Ltd trading as Daiso — Assorted Makeup Products

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Peugeot Australia — P4008

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Peugeot Australia — P4008

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Funtastic Limited — DC Micro Pozers Series 1 (Superman, Batman, Wonder Woman, The Flash, Supergirl, The Joker, Harley Quinn, Robin, Batgirl)

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Hyundai Motor Company Australia Pty Ltd — Hyundai Santa Fe (DM)

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OZO E-Store Pty Ltd — Baby Stroller

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Overseas Vehicle Sales Pty Ltd — General Motors Chevrolet Silverado and GMC Sierra

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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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Staggered that parts of the Trump Tower has no sprinkler system

Photo Source: Craig Ruttle, AP

I read with disbelief that the fire in Trump Tower on Saturday was not extinguished automatically by a sprinkler system. The reason.. it was never fitted.

A fire at the 50th level creates all sorts of risk for the occupants and fire fighters.  I understand in this fire that 4-6 Fire Department New York (FDNY) firefighters were hospitalised.

I understand Trump Towers commenced construction in 1979, however were not completed until 1983, years before the mandatory regulation of sprinkler systems. I recall that back in the 1970’s the T&G Building,  one of the first high rise buildings in Brisbane (Corner of Queen and Albert Streets from memory) was being erected. Even though at that time it was retail (lower level[s]) and offices above it was sprinklered. During the construction phase the sprinkler systems were charged but were not fully activated.

At this point in the construction a fire broke out caused by carelessly discarded rags left by French polishers who were treating the polished wooden wall panels, in, if my memory serves me correctly, what was to be the board room of T&G Insurance. The sprinkler head above was triggered and there was enough water in the charged pipes to extinguish the fire even though it was not under mains pressure or even connected to the town supply. This demonstrated to me as a young man, the power and importance of sprinklers in high rise buildings.

When I look at New York’s Manhattan Island and consider the number of high rise buildings, their proximity to one another, the fact that so many are now apartment buildings I am staggered that it was not compulsory for Trump Tower to be sprinklered. As a student of insurance history I am also well aware of the terrible Triangle Shirtwaist Factory less than 3 miles from Trump Tower where a fire on March 25, 1911, killed 146 people in an unsprinklered building only 4 or 5 storeys high.

As I write this I also think of the Grenfell Tower in London which again was not sprinklered a point that did not hit me at the time.

When will building owners and local authorities get it! I doubt in this case, there will be an order slapped on the building to retro fit sprinklers which is just what should happen.

 

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Protection for unoccupied buildings

One of the problems we see regularly at LMI is the theft of metals from unoccupied buildings. There is also the issue of squatters, adventurous children and youths, malicious damage and graffiti.

When the premises are unoccupied the electricity is often cut off which means that there is no lighting, alarm system or video surveillance happening while static guards and even regular patrols may be cost prohibitive. The latter being of limited value in my experience anyway.

The lighting can be easily and cheaply overcome with solar powered sensor lights and I saw with interest that over in Perth, trials have started with solar powered surveillance wireless cameras.

The technology is said to have a range of 300 meters, with thermal images able to be taken in total darkness.

The company providing the equipment is Spectur and it claims its designs are aimed at protecting large perimeter fences such as farms and construction sites, all without needing the usual infrastructure to support them.

To learn more you can go to the article at BusinessNews.com.au

 

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