Why small businesses need product liability insurance

Product liability cover can vary, with claims depending on the individual business and the product it sells. Regardless, Product liability will ensure you are protected from the inevitable mishap.

Product liability can provide protection for property damage or personal injury claims arising out of the use of a business’s product, or the failure of a product.

Michael White, Steadfast’s broker technical manager, says claims are typically split into two types. “Personal injury claims are very common. In these cases, someone uses a product that’s defective in some way and is injured as a result.

The other type of claim relates to the use of a product that fails, causing property damage,” White explains.

There are a number of circumstances that are not covered by product liability insurance. One situation is when there is an economic loss as a result of a faulty product. Product liability insurance won’t provide cover if you sell a product and it doesn’t work, resulting in a business losing money.

An example would be the client sells a machine used to put caps on bottles. Let’s say the machine manufacturer claims the machine can cap 500 bottles an hour but in reality, it only caps 400 bottles an hour.

The claimant suffers a loss because its production is reduced. Typically, policies also won’t provide cover for the product itself. So if you sell a product and the product does not work and has to be replaced, the policy won’t respond.

This article from the Steadfast online magazine Well Covered, discusses risks of underinsurance, how to avoid mistakes and ensure homeowners have the right insurance in place, particularly in fire-prone areas.

Read the full article here

Not your usual insurance claim!

North Qld is not just known for Cyclone and rainwater claims. Check out the latest claim lodged by our staff.

A Townsville couple thought they had water damage when they heard their ceiling collapse during heavy rain, turns out the cause was a well fed python falling through the ceiling.

He measured in at 2.5 metres, 9 kgs and was released in the bush.

Insurance will fix everything, except the home owners shock.

Bushfire safe: making sure your home isn’t underinsured

With bushfires burning around the country, it’s important for homeowners in fire-prone areas to take steps to ensure they have the right insurance in place.

This article from the Steadfast online magazine Well Covered, discusses risks of underinsurance, how to avoid mistakes and ensure homeowners have the right insurance in place, particularly in fire-prone areas.

Read the full article here

Income Protection for Business Owners

All business owners have a lot of challenges, but many fail to contemplate what might happen if their business is suddenly unable to trade. From illness or injury to a fire at your supplier’s warehouse, there are many ways that your profit generation could be suddenly halted. While there are many rewards to being a business owner, the threat of the unexpected should not be overlooked. One of the most effective ways of keeping yourself and your business safe is through Business Income Protection Insurance. While many people have personal income protection, income protection for business owners is a much more focused form of coverage that could keep you much more safeguarded against the unexpected.

What is Business Income Protection?

Disruption to your workflow can be caused by many uncontrollable events. Business Income Insurance (also known as Business Interruption Insurance) policies are intended to cover your living and working costs while you are unable to trade. Whether you are forced to close your business due to long-term disruption or need to cease trading temporarily, Business Income Protection can make sure that when you are able to reopen the doors you will be in a much more secure position. When work is disrupted, business owners still have bills to pay, staff wages, and supplier costs that need to be maintained. And that can be very challenging if you are not generating any profits.

Why you need it

If there was any damage caused to your business premises, such as a fire or a flood, would your current finances keep you afloat? Any kind of damage, disaster, or business interruption can have a dramatic effect on a business. Without the reliability of ongoing profits, many business owners simply lack the resources needed to stay financially secure during unexpected breaks in trading. Business Income Insurance is intended to keep you financially stable as you tackle disruption, and can be a useful resource when you’re trying to get your business back up and running to pre-disaster levels.

Did you know?

Income Protection Insurance can cover individuals or businesses, but research in 2016 revealed that only 31% of Australians have their income protected.

Research by the Australian Centre for Business Growth suggests that 13% of Australian SMEs fail due to external factors such as natural disasters, changes to regulations, or even shifts in global trends. However, the actual number may be much higher than this.

Income Protection Insurance is not a new type of coverage. In fact, the first recorded policy that was designed to protect income was back in 1880!

What it covers

Most Business Income Protection policies will vary according to your needs. However, you can expect that your policy will cover:

  • The costs of relocation (temporary or permanent)
  • Property damage to products or premises
  • Theft of equipment that prevents you from operating
  • Fixed costs
  • Expenses caused by disruption
  • Wage payments to staff
  • Taxes
  • Loan repayments

What isn’t covered?

Generally, Business Income Protection will not cover you if your business is harmed by you intentionally, particularly in cases where damage was caused by intoxication. You will also find that most policies will only cover your costs if your business suffers a loss or inability to trade as a direct result of a specific disruption.

Businesses exist to make a profit. If a business is unable to make money due to any kind of external factors that are out of the owner’s control, having Income Protection can give you the financial safety net that you need to recover and continue trading.

Real Risks in Business: A Guide to Insurance

Starting a business is a risky business, which is why it pays to be prepared! While it is impossible to predict exactly which possible hardships may befall your company throughout its years of operation, it is possible to load up on the right business insurance that will provide you with coverage when you need it most.

Below is an explanation of some of the most common risks in business, and how best to mitigate them going forward.

Damage to business property and/or assets

This could be as a result of a flood, a storm or another natural disaster, or it could be as a result of attempted theft or vandalism. Either way, damage to your business property and/or assets is sure to prove a costly challenge to overcome. This is why so many business owners opt to take out property insurance. It is a type of insurance that is recommended whether you own or lease your business property.

Business interruption

This is a risk that is not only extremely common, but it is also something that almost every business from around the world deals with on a regular basis. Business interruption in some form or another is inevitable. Whether it is due to the fact that your office is uninhabitable following extreme weather, or because your network is down, business interruption means an interruption to productivity and cashflow, which can have far-reaching consequences, especially if the interruption lasts longer than a few hours. In this regard, it is a good idea to invest money in a business interruption insurance policy which can be carefully customised to suit each business owner’s unique requirements.

Injuries on your business premises

Every business owner who employs workers is required by law to have workers’ compensation insurance. This insurance covers medical-related costs and will provide wage-loss compensation in the event that an employee is unable to work for a period of time following an accident or injury. However, it does not usually provide cover for any lawsuits that may arise following an accident or injury on your business premises. Sometimes, it will be a client who injures themselves on your property. In these instances, it becomes obvious why so many experts advise business owners to take out general liability and public liability insurance.

Employee-related incidents

You increase your business risk exponentially simply by hiring employees. As mentioned, workers’ compensation is mandatory, but there are other ways in which to reduce your risk and ensure maximum coverage relating to your employees and any issues involving them. For example, it is worthwhile looking into management liability and employment practices liability insurance. This type of insurance has been created to provide adequate protection to business owners and managers in terms of lawsuits connected to workplace discrimination of potential, current and past employees. It also protects against most third-party claims.

What am I responsible for as a business owner?

There are countless circumstances that may have a negative effect on your business, many of which are impossible to predict. The good news is that it is possible to prepare for any eventuality, thereby safeguarding your business from potential financial ruin. The best way to do this is with the right business insurance.

However, as a business owner, what specific types of business insurance are you responsible for? What insurance are you required to have by law? Furthermore, which types of insurance are worthwhile considering despite not being mandatory? Let’s find out.

Workers’ compensation

If your business has any employees, then workers’ compensation is a must. Essentially, it is a type of accident insurance paid for by employers which provides coverage should an employee be injured on the job. The insurance will pay for medical-related costs and will provide wage-loss compensation in the event that the employee is unable to work for a period of time following the accident/injury. Workers’ compensation also applies to circumstances when an employee contracts a work-related illness. Workers’ compensation is solely the employer’s responsibility – there are no deductions made from the employees’ salaries in order to pay for it.

Public liability insurance

Public liability insurance, although mostly optional, is required by law for certain types of businesses in Australia. In essence, it protects your business from financial ruin should you or your employees ever be accused of negligence. It may offer cover in the following situations:

  • injury or death
  • providing negligent advice
  • property damage
  • consequential loss, which occurs in very rare cases where a negligent act causes a third party business to lose expected revenue.

Third party personal injury insurance

This type of insurance is required by law, but only if you own a motor vehicle or a business vehicle. Many business owners will be pleased to discover that third party personal injury insurance is often included in their vehicle registration fee. Ultimately, it provides cover for any costs relating to injuries that a motorist may cause to others in a motor vehicle crash anywhere in Australia. Most third party personal injury insurance will cover treatment, care and support of the injured parties, pay for claims management expenses, and settle worries regarding both past and future economic loss in relation to the injury.

In order to remain compliant, all Australian business owners must make sure that they have invested in the right insurance as per the law. Remember, however, while there are specific types of business insurance that every employer is responsible for, there are many other types that are not mandatory, but that can greatly benefit your establishment in the long run including professional indemnity insurance, cyber liability insurance and stock and asset insurance. It is worthwhile to consider all of these types of insurance if you are in search of total peace of mind that your business is properly protected and ready to face any challenge that may come its way.

The insurance implications of working from home

Australians are increasingly working from home, with the most recent data from the Australian Bureau of Statistics indicating at least a third of us choose to work from home at least part of the time.

study by future trends research house McCrindle shows there are lots of different reasons why people work from home. In total, 45 per cent of Australians want the flexibility to juggle other things while working, while 25 per cent of us want a better work/life balance. Additionally, 15 per cent want to work without distractions and 12 per cent want the freedom to also look after children while working.

There are also many different models when it comes to working from home. Some people run their own businesses. Others have negotiated to work from home with an employer part-time. Another group works for an employer full time from their home.

Whichever model someone falls under, there are lots of different insurance implications when people choose to work from home. Here, Michael White, who is Steadfast’s broker technical manager, explains what some of those are.

“Home and contents policies do provide some cover for people who work from home, although it’s usually limited to the assets you’re using to do the work. Usually, a computer is the main asset and this is typically covered by your home policy, with a limit of about $10,000,” he explains.

As a result, it’s important to make sure the cover limit in your insurance policy on the assets you use to conduct work from home is adequate.

Says White: “In contrast to a commercial insurance policy, which may be negotiated, this is not the case with home and contents policies, whose limits cannot be negotiated.”

For instance, if your insurer provides cover for a home computer with a value of up to $10,000, you won’t necessarily be able to negotiate for a higher cover level of, say $20,000, even if you have business assets to this value. This has implications for businesses that operate a business with a higher value of assets from their home.

Let’s says someone is running a hairdressing salon from the basement of their home. The home and contents insurance policy won’t necessarily provide cover for expensive equipment such as chairs and basins above the limits specified in the policy. If this is the case, the business owner may look into buying a business pack insurance policy, which may provide more comprehensive cover.

Also, while they include limited cover for the tools of the trade, home and contents insurance policies won’t cover personal and professional liability.

“So, if people are operating a business from home, they need to take out a separate liability cover for that business,” White explains.

In general, White stresses it’s essential to first ensure if you’re working at home, you do have a home and contents policy that will provide cover for assets such as the computer on which you conduct the business.

In addition to that you need to make sure you’ve got liability cover. This will provide protection in the event that, for instance, a courier delivers a document to your home and trips and has an accident while making the delivery.

Important note – This article is provided by Steadfast.

The information provided here is general advice only and has been prepared without taking in account your objectives, financial situation or needs. Steadfast Group Ltd (ABN 98 073 659 677, AFSL 254928)

Telematics continues to evolve in insurance

Telematics technology has proven benefits when it comes to encouraging more responsible driving, with research indicating better driver behaviour is one of the main advantages in using this innovation.

Black box or telematics technology is a way for businesses to collect data on how their employees are using company vehicles. Using telematics, businesses can collect information such as whether drivers are speeding or driving dangerously, as well as how long they spend on the road. This is important, as research indicates driver fatigue is one of the main causes of road accidents.

According to the most recent Telematics Benchmark report, improved driver behaviour, peace of mind and regulatory benefits are some of main pluses to using telematics. The research found when drivers use telematics devices, businesses achieve peace of mind knowing where their vehicles are on the road and can also plot more efficient routes, leading to reduced costs such as lower fuel bills.

Importantly, data shows businesses that use telematics can improve the safe driving record of their vehicles. Mercurien Insurance specialises in providing insurance to businesses that use tools such as telematics to manage their fleet of vehicles. One of its clients, a not-for-profit organisation with a vehicle fleet, saw speeding events per kilometre drop from 0.14 to 0.07 across two-and-a-half years. Additionally, at fault claims fell from just over 60 to just over 20 a year thanks to telematics.

As this shows, businesses that use telematics may experience a commensurate improvement in driver safety. As a result, some insurers look favourably on businesses that employ telematics in their vehicles.

Businesses collect the data and may provide it to some insurers, who then use it to make decisions on the policy and its conditions. Insurers may approve more favourable policies, including more cost-effective premiums, based on data showing better driver safety.

Turning to the public sector, the National Transport Commission is reviewing how telematics is used across the transport industry, especially among vehicles that are required to comply with the Heavy Vehicle National Law, as well as vehicles that are required by law to use telematics, such as taxis and buses.

Michael White, Steadfast’s Broker Technical Manager, explains telematics may be used by businesses to better manage how their fleets are operated and to also provide this information to their insurer.

“In the case of heavy motor vehicles, telematics can provide information on how the vehicle is being driven, speeds, how brakes are used and whether drivers comply with road rules,” he says.

Zurich Motor Fleet Underwriting and Risk Engineering is one insurer that has a telematics-based insurance policy. Zurich Fleet Intelligence (ZFI) uses telematics data gathered from its policyholders vehicles through black box technology. Subsequently, Zurich uses this information when assessing insurance policy applications and claims.

Often, Zurich’s clients already have devices in place in vehicles so they can monitor vehicles for logistics purposes. ZFI can draw on this data to assess how individual drivers behave when they are on the road. The technology also provides information to drivers about their driving performance, online and in real time.

However, another insurer, QBE, has exited the market, closing its Insurance Box product it launched in 2014. This technology provided people with a Drive Score and helped them become better drivers, by providing feedback on driving habits and tips on how to improve driving performance. It was the first product of its kind in Australia but will no longer be offered as a standalone product.

Despite QBE streamlining its telematics offering, this technology is likely to become more popular with insurers, businesses and regulators as it becomes more sophisticated over time.

Important note – This article is provided by Steadfast.

The information provided here is general advice only and has been prepared without taking in account your objectives, financial situation or needs. Steadfast Group Ltd (ABN 98 073 659 677, AFSL 254928)

Home & Contents Insurance at a glance

What is Home & Contents Insurance?

Home insurance can protect you from financial risk if your home is damaged or destroyed, and can also cover your homes contents if they are damaged, lost or stolen. You can take out cover for specific listed events only or for wider accidental cover, depending on your needs.

Why do I need it?

If your home and its contents were damaged or destroyed in a natural disaster or accident, or all your valuables were stolen, could you afford to replace them?

If not, we are here to help.

Home and contents insurance can even protect you against legal liability if someone is injured or killed on your property.

“Residential property worth up to $63 billion is at risk (from climate change) – and we believe this is likely to be an underestimate.”

Did you know?

  • Approximately 9% of homeowners don’t have buildings or contents insurance.
  • The estimated property loss from 140,000 claims across five catastrophic events in 2015.
  • Approximately 1 in 30 homes are burgled in Australia each year.

What can it cover?

Home insurance can provide you with extensive protection if your home suffers loss or damage – with a number of additional benefits included automatically. You have a choice of options, with different levels of cover and inclusions available.

The exact cover you can receive depends on the policy that you take out. But to give you an idea, here are some of the benefits a Home insurance policy may include:

Potential Benefits

A safeguard of up to 30% extra of your total sum insured, so you can feel confident you won’t be caught short if you have to rebuild (Does not apply to Base Listed Events Policy)

Cover for accidental breakages, damage caused by falling trees during a storm or the impact of a car

Automatic cover for flood and cover for fire or explosion

Automatic inflation adjustment to your buildings and contents sum insured

Cover for earthquake, tsunami, lightening strikes, storm, rain water, hail and wind and water damage from certain leakages

An extra 20% of your total sum insured to cover accommodation costs, if you need to move out while your home is being repaired or built

Cover for burglary or theft, caused by a forced break-in and vandalism or malicious damage

Environmental upgrade cover – up to $5,000, and extra costs of rebuilding to meet statutory requirements – up to $25,000

Liability cover of up to $30 million for injury or loss of life to a third party, or loss of a third party’s property on a building you occupy or own

Catastrophe cover up to an additional 30% of the building sum insured, for declared natural disasters

What usually isn’t covered?

Each policy is different, but generally you won’t be covered:

  • If your home is unoccupied for more than 100 continuous days (90 days for the Listed Event and Base Listed Event wordings).
  • For rust, corrosion, gradual deterioration, depreciation or wear and tear
  • For damage caused by rats, mice or insects

There are other exclusions which we can outline for you. In addition, there is a deductible/excess

Case Study

During the 2017 Northern New South Wales floods, Michael’s family home and all its contents were severely damaged by floodwaters. Fortunately, Michael had taken out home insurance.

His Home Insurance policy included automatic cover for flood, so it covered the costs of repairing the damage that floodwaters had done to the walls and floors of his home.

It also covered the cost of replacing his furniture and white goods. And, because he and his two children had to move out while his home was being repaired, his policy took care of the costs of living in rental accommodation during this time.

What you need to know about landlord insurance

If you’ve scrimped and saved in the hopes of achieving financial security through an investment property it makes sense to insure such a valuable asset.

It’s no secret that Australians are among the most real-estate obsessed people in the world.

Around two million Australians own an investment property. A disproportionate number of these people have their own business. They are typically hoping to set themselves up financially through what they see as a safe, easy to understand investment (and perhaps reduce their tax through negative gearing).

Buying property might be less complicated than attempting to play the stock market, but all investments have the potential to end in tears. Ian Mabbutt, the Head of Personal Lines at Steadfast Underwriting Agencies, explains why it’s a good idea for investment property owners to make sure they have the right landlord insurance.

What is landlord insurance?
“Landlord insurance is the home and contents insurance you take out on a property you own but rent out rather than live in,” Ian says. “It’s a policy that will cover you for most things – public liability, storm damage, fire, theft and so on. That noted, these policies don’t cover wear and tear. Also, if owners want to be covered for loss of rental income they need to choose – and pay extra for – the rent-cover option. Loss of rental income is the biggest issue owners face but rent cover isn’t standard on landlord insurance policies.”

Read the full Steadfast article here.