Business Insurance – what should every business consider?

Running a business has a number of responsibilities and associated risks whether you are a sole trader or global enterprise. Business insurance can protect you against the financial damage of business risks giving you peace of mind to concentrate on growing your business.

In Australia, some insurances are compulsory – if you hire employees you must have workers compensation in accordance with each state regulations. Further to this some companies are required to have Public Liability Insurance to cover for third party death or injury and if you own a motor vehicle Third Party Insurance is also compulsory.

In addition to the compulsory insurances there is no ‘one size fits all’ solution. Insurance companies will often package different types of insurance together which is more economical than separate policies. You will want to protect aspects of your business such as:

  • Business income
  • Business assets
  • Customers
  • Employees
  • Business owners

As your broker, we have the expertise and will take the time to understand your business and source the most suitable insurance for your needs.

Some of the key insurance products we’ll look at include

Technology and Cybercrime Insurance
Technology Insurance covers accidental damage or loss to computers, electronic equipment and data. Cyber Liability Insurance protects your business against the cost of keeping your data secure and business disruption in the event of cybercrime.

Property Insurance
Property insurance covers damage or loss to buildings, contents and stock caused by insured events and accidental damage.

Business Vehicle Insurance
In addition to compulsory third party insurance we recommended that you consider business vehicle insurance to protect your company vehicles in the event of damage, theft or collisions.

Product Liability Insurance
Product Liability Insurance is a must for any business that manufactures its own products. Even with excellent manufacturing practice and quality control you cannot completely rule out legal action for a faulty product.

Directors and Officers Insurance
Managers are accountable for their actions and also the outcome of their decisions and unfortunately it’s easy to make a wrong decision in a high-pressure situation. Even with sound knowledge of the market, compliance regulations and risk management an unintentional mistake can be very costly which is where D&O Coverage offers protection. Risks that can be covered include employment practice, HR issues, reporting errors, unauthorised decisions and breaching compliance regulations or laws.

Contact us for a business risk analysis and customised insurance package.

Lloyd’s of London in massive coronavirus claims prediction

If you needed proof of the pelting that the insurance industry has taken at the hands of the coronavirus, then look no further than Lloyd’s of London.

It is predicting payouts of up to £5 billion (around AU$8.9 billion) after reporting a £400 million (around AU$714 million) loss in the first half of the year, compared to a £2.3 billion profit in the same period in 2019.

According to chief executive John Neal, the first half of the year has been “exceptionally challenging” for the organisation – with insurers hit across areas including trade credit, event cancellation, business interruption, travel and more.

To make matters even more challenging for the insurance market, its reinsurance covers only around £2 billion of the amount it expects to encounter in claims.

“The pandemic has inflicted catastrophic societal and economic damage calling for unparalleled measures to stifle the spread of the virus, and to get businesses and economies back on their feet,” said Neal.

Speaking on the Today programme on the BBC, Neal pointed to talks with the government.

“It’s a real issue, isn’t it, when you look at systemic and complex risk, whether it’s business interruption, or cyber, or climate,” he said.

“And that’s why we’ve been very engaged with government to say: ‘Look, [this is] what can we do as an industry, and what can you do, to ensure that businesses and people are better protected when these events come along’.”

“The reality is, and it’s unfortunate, the vast majority of policies do not provide cover for this type of loss, and we’re as bothered by that as anything, to try and make sure that next time around, whatever the event, customers have had the opportunity to buy the right products and services,” he added.

This is an Insurance Business Australia article.

When was the last time you thought about your insurance policy?

Are you sure you are covered? Don’t wait until you need to claim to discover your policy isn’t what you need.

If you’ve had the same insurance for a while it’s quite likely that your circumstances have changed since the policy was first taken out. As part of our client service we can handle your insurance cover management – this includes regularly reviewing your policies so that you have the correct level of cover. We identify new or emerging risks to your business and recommend necessary changes to your policy.

It’s good practice to not only review your policy annually but also when your circumstances change. A policy review needs to consider the following:

  • Stock levels – if you have increased or decreased your stock level your policy should accurately reflect this value
  • Staffing – a bigger or smaller team may affect the type and level of cover you need
  • Equipment and other assets – if you have bought or sold any new business assets your premium will need to change to reflect these
  • New risks – if the way you operate has changed you may have new risks to consider, also any new products, services or changes to sales channels, distributor to trade patterns may also change your insurance needs
  • Turnover change – if your turnover has changed this will impact your business interruption policy
  • Newly created entities or changes to directorships

How can we help?

We will save you time by researching and comparing your policy options using our expertise to provide options that best suit your needs. We will also ensure you have the correct levels and types of insurance at the most economical premium. As part of Steadfast we have access to Australasia’s largest network of policies and will take the hard work out of finding the right one for you.

The importance of keeping your details up-to-date

It’s a fast moving world, especially at the moment. Even though there’s so much going on, it’s essential to update your insurance broker any time your circumstances change to help ensure the cover you have in place is still appropriate for your enterprise.

A popular business pivot many beer and spirit firms have undertaken in recent months is a great example of what can go wrong if firms don’t tell their broker when their operations change.

During the early stages of the corona virus pandemic, many of these firms switched from making alcohol to hand sanitiser, as the need for their regular products dropped as bars and pubs closed and as demand for sanitiser sky rocketed.This was a great commercial solution for these firms, and a wonderful way to keep staff employed.

But it’s important these enterprising enterprises let their insurers know how their operations had changed, because their risks also shifted alongside their product lines.

Let’s say, for instance, the hand sanitiser damaged people’s skin and caused painful rashes, and the affected customers or businesses that had purchased the product made a claim against the business. The insurer could deny the claim if the business had not informed their insurer through their broker they were changing their product line, leaving the business liable to pay any damages from their own earnings.

“It’s important to tell your broker any time you circumstances change, who can in turn let your insurer know,” says John Clark, Steadfast’s broker support manager.“This is because policyholders should disclose anything that may affect the insurer’s decision to cover the business.

These include things like your business premises becoming unoccupied and reduced security,” he adds.There are many other situations organisations are facing at the moment they should also let their broker know about.“Many businesses like hotels and retailers may have seen their stock levels fall during the lockdown.

Read the full article on Steadfast Well Covered.

Congratulations Katie

Our newest employee Katie has recently achieved her Tier 2 qualifications in General Insurance.

Katie joined us early this year and has really enjoyed her new career, studying hard and completing her initial diploma within 5 months; normally a 12 month course.

We at Sarina Insurance & Financial Services are very proud of her, so come on in and talk to Katie for all your home, contents and car insurance quotes.

Make sense of the insurance market

A hardening market can mean higher premiums and tougher underwriting decisions – so it pays to get an expert on your team.

Like any market, the business insurance market experiences different cycles that can affect pricing and how easy it is to get cover. Depending on the stage of the cycle we’re in, this can mean more risk and higher premiums for you.

That’s where we can help. As insurance experts, we can help you navigate the insurance market to find you value for money insurance that’s suitable to cover your business needs. And as part of Steadfast, Australasia’s largest network of general insurance brokers, we can help negotiate better cover.

Understanding insurance market cycles

Insurance premiums are generally governed by the insurance cycle – which moves between a ‘hard’ and ‘soft’ market, based on economic and other factors. In a soft market, insurers are chasing market share – competing with lower premiums and better underwriting terms – and making it easier and cheaper to get the cover you need.

Factors like a worsening economy, higher claims – perhaps due to a string of natural disasters and storms – and poor investments can lead the market to harden in these times, premiums tend to be higher – and underwriters less willing to take on additional risks.

Insurance cycle

 

How can we help you navigate the business insurance market

We take the hard work out of getting the most suitable cover – at a competitive price. As part of Steadfast, Australasia’s largest general insurance broker network, we have access to policies from national and international insurers – so we can help find the right one for you. We’re experts in helping you:

Access to local and international markets
With access to international and local insurance companies, we have access to policies from around the world – and at home. And because not all markets are at the same point in the cycle that means we can find you the right terms and policy – and potentially save you money.

Expert advice
Even in a hardening market, there are things you can do to get more value from your insurance. By putting robust risk management processes in place and being more strategic about your business risks, you can potentially lower the cost of your insurance premiums.

As insurance experts, we can advise you on what you can do to make your insurance dollar go further.

Negotiating power
Because we are part of the Steadfast network, we can negotiate with insurance providers to help get you the best possible terms.

Our regular cover reviews, effective claims management processes and negotiating power can also help to minimise future price increases – so you can afford to maintain the cover you need.

Managing cyber risks while staff work from home

Heightened cyber risks have emerged as a serious issue, given most businesses now have many staff working from home.

So it’s important to put in place policies and procedures to ensure data is secure no matter where staff are located. Helping staff to recognise and avoid risky behaviours is also part of a great cyber safe culture. Here we explore some of the essential steps businesses need to take to reduce the risk of cyber criminals compromising the network.

Make sure staff are updating security alerts

“The challenge is to ensure cyber security is top of mind for employees,” says Fernando Serto, head of security technology and strategy at Akamai Technologies.

“But it can be tricky to enforce behaviour when people work at home, especially when it comes to ensuring employees are uploading security updates,” he adds. One way to combat this is to put controls in place so staff can’t access work applications on their devices until security updates have been installed.

“This will encourage users to keep up with updates and patch cycles,” Serto says. This is also effective no matter if staff are using devices provided by the business or their own tablets, laptops and smart phones.

Educate staff about cyber safe practices

Phishing is a huge challenge for all businesses. These are fake communications sent by criminals that look messages from a real business. The fraudsters attempt to get staff to click on links, which gives offenders access to the business’ IT system.

It’s essential to teach staff how to recognise a phishing email, which is challenging given criminals are becoming increasingly sophisticated in their approach.

“We’ve seen phishing campaigns that use social media and other methods to try to lure individuals to click on a malicious link to compromise a work device,” says Serto. So it’s important to create an open, honest and transparent communication channel between staff and the IT security team.

This enables the business to explain to teams why being phishing-aware is important and to let them know when new scams emerge.

Ensure staff are safe when they use video conferencing

The use of video conferencing tools has skyrocketed this year, greatly assisting firms to communicate when staff are no longer office-based. But hackers can easily compromise these tools and use them to enter a firm’s network.

So it’s important to implement proper protocols to reduce this risk.“There are lots of free versions of these tools. But an enterprise-grade solution will make a significant security difference,” says Mick McCluney, technical director of cyber security firm Trend Micro.

Free services run a heightened risk of malware being installed in users’ systems. Using an enterprise-grade version substantially minimises this risk.“Outsiders guessing meeting IDs and bombing meetings is becoming an issue.

So take care to configure meetings so they are secure. Using passwords where possible also helps ensure only authenticated users are in the meeting,” McCluney adds.

Concerns have been raised by the FBI and others about IT security when using Zoom.

Hamish Blake the comedian has crashed Zoom meetings. Cyber insurance is another line of defence against cyber attacks by external parties. But it should be seen as a last line of defence. It’s also essential for firms to have the right security protocols in place to reduce the risk of compromised systems while so many people are working from home.

If the business does detect a cyber breach, use it as opportunity to educate staff and encourage them to be an active part of the organisation’s cyber security strategy. See a breach as a valuable lesson and a way of generating insights about which other controls should be in place to avoid a similar situation down the track. That’s the best way to ensure the business, its data and systems are properly protected at all times.

Important note – the information provided here is general advice only and has been prepared without taking in account your objectives, financial situation or needs.

This is a Steadfast Well Covered Article.

Protecting Your Commercial Assets In Business

For business owners in Australia, insurance needs to be a priority. With so many potential threats to a business, having the right insurance coverage can keep your business and your personal finances significantly safer. The challenge for Australian entrepreneurs is that there are so many different types of insurance policies available that it can often get very confusing very quickly. From the insurance that you’re required to have by law, to the coverage that will simply give you peace of mind in a wide variety of sectors, here is a brief guide to protecting the commercial assets of your business.

Legally Required Insurance

There are a variety of insurance types that business owners are required to have. Although employees are not legally considered as a commercial asset, you will certainly struggle to run a business without them. All businesses that employ even a single person must have Employers Liability Insurance in place. However, if you have business premises, that is an asset, and that means you need to have Buildings Insurance. This will protect you from damage to the building, whether it’s from wilful vandalism or accidental fire or flooding. You may also need to have:

  • Vehicle Insurance: If you use a company vehicle to deliver goods or for your employees to use, then they need to be insured.
  • Industry Specifics: Some industries are required by law to have specifically tailored policies in place. Make sure that you are aware of the specific needs of your business sector so that you aren’t caught out.

Non-required Insurance Types

There are additional types of insurance that may not be required by law but can be very useful when it comes to keeping your business safer. Depending on the sector that you trade in or the size and structure of your business, here are some asset protection insurance types that you should consider:

  • Professional Indemnity: This should be a priority for freelancers, consultants, and contractors. Although it is not a requirement, it can keep you much safer against claims made against you or your business in relation to professional negligence.
  • D&O Insurance: If your business has directors and/or officers then it’s worth getting the insurance that can protect them individually from legal liability.
  • Product Liability: If your business sells, makes, or even simply repairs a tangible product then it’s a smart move to invest in product liability cover. If a customer gets injured using a faulty product then you can be vulnerable to a substantial fine that could cost you your business.

Manufacturing businesses might also want to look at a pollution risk policy. If there is even the slightest risk that your manufacturing locations will produce any kind of waste then a pollution risk policy will be a huge help if you are forced to pay for the cleanup of any accidental pollution or any claims made against your business.

Additional Options

No matter what kind of industry your business is in, you might also want to secure your assets by adding these additional policy types to your overall coverage:

  • Intellectual Property Insurance: Protect your intangible assets, including patents, logos, or designs.
  • Business Interruption Insurance: If you are forced to close your business temporarily due to outside disruption (flooding or fire) then this can prevent the threat of closure due to a lack of revenue stream. This is sometimes referred to as Business Income Protection Insurance.
  • Glass and Sign Cover: Often not included in Buildings Insurance, this can keep your frontage much safer.

You might also look at Goods in Transit insurance if your business involves a lot of shipping, or Money Insurance if you have large amounts of currency on your premises.

Entrepreneurs and business owners should always have a very clear picture of their insurance needs. From the policies that are legally required to the ones that are simply designed to keep your business safer, having the right coverage can ease the stress of business management. Make sure that your business is more protected, and the future of your company will be much more secure.

A down to earth take on the Corona Virus

Setting things straight

Apologies if this is a little personal and close to home. But the misinformation being spread needs to be countered with the facts.

Facts are based on math and logic, not opinion.

Below the stated facts is my current call to action on client portfolios – very important reading.

If one person is sick at work with a stomach bug, do you send everyone else home and leave that person in the office or do you send that person home?

No different now.

Some stats to help those of you that have bought into the fear being spread by the press:

  1. 20-40% of the population will get the virus regardless of whether we lockdown or not.
  2. Of the current 331,000 of active virus cases, 96% have mild flu like symptoms, 3% are serious, and 1% are critical.
  3. The incubation period is not 14 days. The average is 14 days for those we know contracted it. In reality the incubation period could be anything from 3-4 days to up to 22 days.
  4. Staying home will not eradicate the virus. That’s nonsense. No virus is eradicated from people not getting it. Viruses are only eradicated from people getting the disease (speak to any virologist) and building an immunity or from a vaccine. Currently, a vaccine is about 12m away. So, does that mean we stay at home for 12m?
  5. The death rates vary widely by country so those reported in the press are way off. The average death rate amongst the more efficient countries is 0.9%, whereas its 6.5% for the least efficient countries. The difference between the cluster of countries – older populations, more smokers, poorer health systems, less testing, culture and hygiene. Also, the death rate is derived by dividing the number of deaths by the number of confirmed cases. Considering the efficient countries have only tested 120,000 to 150,000 people, there’s already 10-20 times more people that have the virus that don’t know and/or haven’t been tested, and possibly more. That puts the death rate for the efficient countries on par with the common flu!! Do we stay at home and lockdown the country for the common flu?? SARS had a death rate of 9.6% and MERS had a death rate of 34% – did anyone notice when that occurred?
  6. Age – the death rate below the age of 60 is 0.38% and even lower if you consider, as above, that more of us have it but don’t know. Of that 0.38%, all but a handful of cases had a preexisting condition. Of those that had no reported pre-existing condition, they had one but didn’t know they did. No deaths for those under the age of 10. Lastly, and away from the stats, the US has mobilized the army and national guard and Britain are a few days away from doing the same. Do you know why that it is? Yes, it’s to help with medical care, logistics, and sanitation. But the most important reason why isn’t being mentioned – martial law. No job, no money; no money, no food; no money, no electricity; what do people do when they have no food and no electricity to keep warm? If you need help figuring that out, I can’t help you!

From a portfolio perspective, I recommend you do the following right now:

  1. Don’t panic
  2. Don’t make any changes to portfolios, wait for markets to settle (I will let you know)
  3. Accumulate cash in portfolios – don’t rebalance, bank distributions, bank investments maturing like TDs and hybrids
  4. Use that cash to buy into the plethora of equity raisings we’re going to see over the next few months – Cochlear went first yesterday with a $850m raise at $140 per share – that’s a 44% discount to the peak and a 16% discount to the day before the announcement. On average, large cap stocks will be raising equity at a 15-20% discount to prevailing prices, whilst mid and small cap stocks will be raising equity at a 25-35% discount to prevailing prices. Fund managers are salivating over these opportunities.
  5. The bond market is returning to normal following the bazookas fired by central banks. The banks have more to do and are committed to doing “whatever it takes”. DON’T SELL YOUR BOND FUND – bond managers are salivating over the opportunities they’re about to get given how wide spreads are and the backstop / floor being provided by central banks.
  6. Stop reading the press and stop watching the news. False and misleading information now constitutes more than 90% of viewing and reading. They are spreading fear, fear feeds the narrative of lockdown, lockdown means mass unemployment, mass unemployment means no economic recovery.

10 years service – Marilyn Stowers

Our longest serving employee reached a milestone 10 years with Sarina Insurance on Monday the 9th of March.

Marilyn originally joined to “do the bookwork” but has achieved so much more in her time with us.

Thrown into a completely different business, Marilyn has excelled, studied and achieved full broker status and manages a large portfolio of clients.

Marilyn runs a tight ship and if a job is to be done, it must be done right.

The office would not run without Marilyn and as Barb says, working with us has been “The best 10 years of her life” !