Overseas Customers and Suppliers Extension

A broker contacted me for advice on insuring the risk of a related New Zealand based business effecting an Australian businesses insurable gross profit.

The endorsement the broker had tried to use which was rejected by the Australian Insurer was:

Customers and Suppliers – Unspecified

Unspecified property at the premises of Your suppliers or customers of goods or materials or services (other than those services provided by any Public utilities) or at storage premises neither owned nor operated by You where You store goods or materials, all within the Commonwealth of Australia, provided that Our liability will not exceed 20% or the percentage
shown in the Policy Schedule of the sum insured applicable to this cover section.”

With respect this was never going to work as the other company was based in New Zealand.  I did not have enough information to fully answer the question but provided enough for the broker to know what to do once he established the relationship between the Australian and New Zealand operations. My answer read as follows:

If the entity in New Zealand is a separate legal entity and supplies the Australian Entity then they are a supplier to the Insured.

The endorsement you have chosen is unspecified Suppliers and Customers for Australia.

I would suggest the following endorsement which I wrote some time back and also covers suppliers and customers in New Zealand.


Loss resulting from interruption of or interference with the business in consequence of Damage to property at the premises, anywhere in Australia or New Zealand, of any direct producer or direct merchant shall be deemed to be loss resulting from Damage to property used by the Insured at the Premises.

The liability of the Insurer(s) under this endorsement, in respect of any one loss or series of losses arising out of any one event or occurrence at any one premises, shall be limited to amount stated in the Sub-Limit of Liability noted in the Schedule against Unspecified Suppliers and/or Customers Premises.

For the purposes of this endorsement, the term ‘premises of a producer’ refers to premises, other than those described in the Public Utilities Extension to Section 2 of the policy, at which any of the goods or services used directly by the Insured are produced, assembled or stored. The term ‘premises of a merchant’ refers to premises to which the Insured directly provides goods or services.”

If the New Zealand operation is the same legal entity as the Australian one, unlikely if it trades in New Zealand it its own name, then you should consider the following endorsement.


Loss as insured by Section 2 of the policy resulting from interruption of or interference with the Business in consequence of Damage to property not insured by Section 1 of the policy and situated at any other premises in Australia or New Zealand owned and/or occupied and/or used by the Insured for the purpose of the Business or any other business shall be deemed to be loss resulting from Damage to property used by the Insured at the Premises.”

With the earthquake in Christchurch earthquake may be an issue for the underwriter.

Hope this helps.


One response to “Overseas Customers and Suppliers Extension”

  1. Grant says:

    Heya i am for the first time here.

    I found this board and I find It truly useful; it helped me out a lot.

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