Product Recall: Learning from Nanna’s

Australian frozen foods brand Nanna’s has made the news recently after infecting 18 Australians to date with Hepatitis A.  National Health departments have got involved and the company has had to put out a nation-wide recall for four of its frozen berry products.  However, this is only a taste of what’s to come for Nanna’s who have been operating in crisis mode since the story broke on mainstream media.

Nanna’s is set for a financially difficult time.  On top of immediate costs associated with the product recall, the brand looks to be facing a costly legal process, with Slater and Gordon law firm already gathering evidence to bring a class action against them.  The story is accelerating at pace, and the brand’s reputation is suffering the consequences.  Consumers have lost faith in the brand and are boycotting its products in favour of locally produced fruit.  It’s going to take a lot of effort for Nanna’s to regain the trust of their former consumers.

Consumers trust the brands they buy from and manufacturers have obligations towards consumers under Australian law, with a clear requirement that any goods they produce must be free from safety defects.  As is evident with the Nanna’s case, when a situation like this occurs, it sparks consumer and can quickly spiral out of control.  The effect on the business can be catastrophic.

Product Recall insurance can protect against any costs incurred in the event that your product has to be recalled and replaced with a safe one.  The Nanna’s example highlights that while the chances of occurring are minimal, the effects on your business are considerable. Protecting your business and personal assets, Product Recall insurance allows the company to continue to pursue their goals, safe in the knowledge that strategies are in place, plans are tested and potential financial losses are appropriately covered. Whatever your business situation, it is important that you have considered every possible risk as part of your insurance program as the unexpected can have an astronomical effect on the your business.

Find out more detailed information on Product Recall Insurance or Business Interruption insurance from your insurance broker.

Disclaimer

Conditions apply for each policy and the information expected from you for a policy to trigger. Coverage may differ based on specific clauses in individual policies. Please ask your broker to explain the additional benefits and exclusions pertaining to your policy.

The information provided is general advice only and does not take account of your personal circumstances or needs. Please refer to our financial services guide which contains details of our services and how we are remunerated.

Unfair Dismissal Claims on the Rise

A recent study has found that unfair dismissal claims have risen by 10% a year since the introduction of the Fair Work Act in 2009.  Now sitting at an average of 17,000 annual claims [Paul Oslington, Australian Catholic University, December 2014], unfair dismissal presents a considerable risk to today’s business owner.

Regardless of blame, the effect of an unfair dismissal claim on the business can be extremely damaging, both in terms of reputation and cost.  In the event that the claimant is successful, costs incurred can be irreparable.  The Fair Work Commission found that in 57% of cases where a payment of money was awarded, the payment amounted more than $10,000 [Resolving Issues, Disputes and Dismissals, 2014].

Under the Fair Work Act, claimant success rates have increased to 51%.  The outcome of unfair dismissal cases can be difficult to predict, and even the smallest oversight on the part of the business makes it impossible for them to win.  For example in Dent v Halliburton Australia Pty Ltd [2014], Mr Dent was dismissed for breaching the company’s driving safety policy when he was found speeding in a company vehicle.  The Fair Work Commission found that Mr Dent had been speeding in the company car, but concluded the dismissal was unfair as Mr Dent had not been given sufficient notice of the disciplinary meeting and was therefor denied a reasonable opportunity to respond to the allegations.  Mr Dent was awarded compensation in the amount of 11 weeks wages.

Cases like this are on the increase, so it is imperative that you and your business are covered.  Without adequate protection a claim against you and your Directors can have a significant impact on your cash flow and even personal assets.  Management Liability insurance is designed to protect you and your company against the risks and exposures of running the company. This includes unfair dismissal claims as well other claims brought against the Directors and Officers from shareholders, statutory bodies, competitors and even the corporation itself.

Management Liability is an important part of any business insurance program. Check whether your current insurance policy covers Management Liability or whether you need specialist Management Liability cover.  We have access to employment specialists, Employsure, who can review your workplace policies and provide advice and assistance on a range of employment policies and procedures. Contact us if you would like Employsure to help protect your business.

Disclaimer

Conditions apply for each policy and the information expected from you for a policy to trigger. Coverage may differ based on specific clauses in individual policies. Please ask your broker to explain the additional benefits and exclusions pertaining to your policy.

The information provided is general advice only and does not take account of your personal circumstances or needs. Please refer to our financial services guide which contains details of our services and how we are remunerated.

bushfire insurance

Prepare For More Devastating Bushfires

Australians are being warned to prepare for another devastating bushfire season this year, particularly in New South Wales, Tasmania and Victoria.

A new report by the Climate Council warned the length and severity of the bushfire season is increasing year on year.

“Record-breaking heat and hotter weather over the long term in NSW has worsened fire weather and contributed to an increase in the frequency and severity of bushfires,” the report said.

The report linked the intensity and length of the bushfire season in Australia to the impact of climate change, stating extreme fire weather has increased over the last 30 years and will only get worse in the future.

NSW was declared a state of emergency in October 2013, with areas in the Blue Mountains and Central Coast up in flames and more than 100 fires burning across the state. Early estimates suggest the cost of damages from the bushfires would be more than $180 million with 768,000 hectares of land affected, destroying 279 homes, with two people losing their lives.

This year will be no exception, with NSW firefighters battling 90 blazes in August this year and 55 local councils declaring the start of bushfire season well before the start of summer.

Meanwhile, the Tasmanian Fire Service has warned that a number of inner-city areas are considered bushfire risk hotspots this summer.

The economic cost of bushfires in Australia is also devastating, with an estimated cost of $337 million per year, with that cost expected to reach $800 million annually by mid-century, the report said.

The legal profession are encouraging homeowners and businesses to check their insurance policies to make sure they are adequately covered if disaster strikes.

Checking your insurance policy now and better understanding your legal rights, could save heartache and financial stress down the track.

“Our lawyers have found that if people had checked their policies each year before the extreme summer weather kicked in, they could have avoided some of the problems they faced when making a claim.” said Legal Aid Queensland CEO, Anthony Reilly.

People who are insured should check their policies and ask themselves:

  • Am I up to date with my payments?
  • Does the sum insured on my building cover the total rebuild cost?
  • Do you understand the BAL rating (Building Attack Level) and how it affects your property?
  • Do I know where my policy is?
  • Does my policy really cover what I think it covers?
  • What can’t I claim for under the policy?
  • Are there maximum amounts or limits I can claim?

If you can’t answer these questions then you need to speak to your insurance broker.

Disclaimer

Conditions apply for each policy and the information expected from you for a policy to trigger. Coverage may differ based on specific clauses in individual policies. Please ask your broker to explain the additional benefits and exclusions pertaining to your policy.

The information provided is general advice only and does not take account of your personal circumstances or needs. Please refer to our financial services guide which contains details of our services and how we are remunerated.

cyber insurance

Insurance issues for 2015: Cyber, Terrorism & Climate Change.

A survey has found that cyber attacks and terrorism represent the two biggest emerging risks to the reinsurance industry in 2015.

The survey, by Guy Carpenter & Company in the United States, found that 40% of those polled ranked cyber attacks as the most threatening emerging risk of 2015, while 31% labelled terrorism as the biggest risk for the coming year.

Third place went to climate change; with 29% of the reinsurance professionals surveyed noted the changing environment as the biggest emerging risk.

Andrew Marcell, Managing Director of Guy Carpenter, said of the survey: “Cyber attacks are one of the most serious economic and national security challenges facing not only the insurance industry, but governments and businesses around the world.”

Jaydon Burke-Douglas, Specialty Risks Practice Leader at leading Cyber insurer, DUAL Australia commended:

“Cyber risks are definitely real. The majority of claims that we’re seeing aren’t actually coming from some computer hacker sitting at their computer stealing your data. The majority of the claims that we are seeing are coming from really quite straight forward human errors like someone leaving their laptop on the train or accidentally sending client lists to everyone in their address books.”

Mr Burke-Douglas added, “One trend that we are seeing is the increase in attacks against SMEs. For example, 61% of targeted spear-phishing attacks were aimed at SMEs in 2013.”

In another study undertaken in Australia by Ernst & Young, fifty-one per cent of Australian companies lack the agility, budget and skill to mitigate known vulnerabilities and successfully address cyber security. The survey outlines that 80% of companies believe they face an increased cyber threat. For the first time in 17 years, the survey reveals that the biggest threat is posed by external forces such as ‘hacktavists’ and criminal syndicates.

Interestingly, despite the widespread media attention, only 19% of survey respondents saw the threat of natural disasters as the leading threat to growth thanks to a relatively calm year for disasters around the world.

Disclaimer

Conditions apply for each policy and the information expected from you for a policy to trigger. Coverage may differ based on specific clauses in individual policies. Please ask your broker to explain the additional benefits and exclusions pertaining to your policy.

The information provided is general advice only and does not take account of your personal circumstances or needs. Please refer to our financial services guide which contains details of our services and how we are remunerated.

santa business insurance

Is Santa covered this Christmas?

Far, far away in the North Pole, Santa was worried. With the busy Christmas period coming up and an ageing workforce of elves and reindeers, would this be the year something went wrong?

Santa had the same insurance for years now after a recommendation from his good friend, the Easter Bunny. But it has been year since he had sat down with his broker and gone over his insurance and his business risks.

For a busy and successful small business, Santa is typical of most business owners: “We are all busy — sometimes too busy — especially around the holidays, and I don’t have time to look at my insurance, it should be okay.” Is what I hear a lot.

If Santa was worried, he really should be looking at his insurance policy more regularly. As an insurance specialist, I’d be recommending Santa check the insurance for his North Pole operations:

  • Products & Public Liability – Santa builds and distributes toys to children all around the world. No other business has the same reach as Santa, yet he probably hasn’t updated his public and product liability cover. If one of his overworked elves makes a defective toy, Santa could be sued for compensation as a result of an injury to that child.
  • The elves’ tools — Santa should have employees’ tools coverage under his property insurance for the extra small equipment his workers bring to the workshop. While the North Pole doesn’t get many visitors, he should check his limit provided for theft under the property form.
  • Reindeer insurance — These are expensive livestock that Santa should insure against mortality, loss of use and major medical. If Rudolph breaks a leg Santa needs sufficient cover to make alternative arrangements.
  • The sleigh — This should be covered by an inland marine policy (like a cargo truck). As Santa used the sleigh to send his toys and goods to multiple locations, Santa needs to cover these valuables all over the world.
  • Business interruption — Santa works year-round to get ready for Christmas. Losing the workshop for just one day could make a difference between December 25 and December 26. Business interruption insurance would ensure that Santa has enough cash on hand to make sure he meets his obligations, continues to employ the elves and could set up a temporary facility at the South Pole.

Just like Santa, every business has specific risks that need to be reviewed regularly by an insurance expert. Like Santa, next time you think you’re too busy to properly review your insurance, remember that your family, staff and customers rely on you whatever may affect your business!

Disclaimer

Conditions apply for each policy and the information expected from you for a policy to trigger. Coverage may differ based on specific clauses in individual policies. Please ask your broker to explain the additional benefits and exclusions pertaining to your policy.

The information provided is general advice only and does not take account of your personal circumstances or needs. Please refer to our financial services guide which contains details of our services and how we are remunerated.

social media and employees

Anti-Social Media and your employees

Employers are to expect the very best from their employees but what if employees don’t act on good faith, trust and fidelity and don’t have the best interests of their employer at heart? The number of unfair dismissal claims has increased due to employers not having appropriate policies in place to set the boundaries for employees when it comes to appropriate use of social media.

Examples range from employee rants on social media, approaching public forums to voice unfavourable information and even speaking out to journalists about their work.

Technology and access to many media forms, especially social media sites, is easily available. Employers need to protect their business against negative publicity. This can be achieved by;

  • Having clear employee contracts;
  • Media policies which prohibit employees from making public comments, or leaking information to the media;
  • Social media policies in place which clarify disciplinary action for sharing harmful information or identifying employer or company name;
  • Internal channels available for employees to voice complaints

These procedures protect employers from being ridiculed in the media and help avoid unfair dismissal claims.

When it comes to social media let’s remember that employees have a right to ‘social justice’ but is it not appropriate for an employee to engage in conduct that damages the reputation of an employer. All employees must have a fair and acceptable social presence online and in the office.

We have access to employment specialists, Employsure, who can review your workplace policies and provide advice and assistance on a range of employment policies and procedures. Contact us if you would like Employsure to help protect your business.

Disclaimer

Conditions apply for each policy and the information expected from you for a policy to trigger. Coverage may differ based on specific clauses in individual policies. Please ask your broker to explain the additional benefits and exclusions pertaining to your policy.

The information provided is general advice only and does not take account of your personal circumstances or needs. Please refer to our financial services guide which contains details of our services and how we are remunerated.

 

business interruption insurance

Why business interruption insurance matters

The majority of Australian small businesses choose to go without Business Interruption insurance – but that’s often because they don’t realise the implications and the risk they’re taking on.

While small business owners are aware of the need to insure their property, equipment and stock, most do not protect themselves from the potentially crippling impact of being temporarily out of action.

If something happens that triggers your insurance policy such as a fire or malicious damage, there is a high likelihood that your business operation will be ‘interrupted’ and this will cut your profitability – often drastically.

What is Business Interruption insurance?

In simple terms, Business Interruption covers you for loss of profits. While your income may stop after an accident, storm, fire or other ‘event’, many business expenses will continue.

A small amount of property damage will often cause a significant disruption, turning your profitable business into one that’s operating in the red. What’s more, it can be many months before you’re profitable again.

It’s not uncommon for the Business Interruption component of an insurance claim to be greater than the cost of repairing the physical damage. Many small business owners do not appreciate just how expensive it can be to have their trading interrupted – even for a short period. By the time they realise, it’s too late.

What does Business Interruption insurance cover?

Apart from lost income, Business Interruption can also cover the increased cost of working that is normally incurred as a result of the accident or event that has impacted your business.

This could be the cost of relocating to a temporary property while repairs are done, paying overtime, hiring equipment and additional temporary staff costs as you try to make up for lost time. It can also pay for advertising to tell your customers that you have just moved around the corner or that you are now ‘back in business’.

In other words, it covers costs you would not normally incur and that are necessary in order to get your business back to where it was before the event.

Indirect impact

Business Interruption not only covers interruption from events that impact your business directly, it also includes events that have an indirect impact.

A common example is if you operate in a shopping centre and there’s a fire in another part of the centre and that means customers cannot access your shop. Although your shop didn’t have the fire, your Business Interruption cover can be triggered and protect your profit.

While Business Interruption is almost universal for larger companies, the majority of small businesses in Australia elect not to take out Business Interruption insurance. Operating without Business Interruption insurance is a serious risk.

Your best business decision was to go into business. Having Business Interruption insurance is an investment worth considering as it can help put you back in business if things go wrong.

Disclaimer

Conditions apply for each policy and the information expected from you for a policy to trigger. Coverage may differ based on specific clauses in individual policies. Please ask your broker to explain the additional benefits and exclusions pertaining to your policy.

The information provided is general advice only and does not take account of your personal circumstances or needs. Please refer to our financial services guide which contains details of our services and how we are remunerated.

rockpool insurance claim

Lightning-quick recovery turns celebrity chef to broker fan

It’s long been a darling of the Sydney food scene but chef Neil Perry’s acclaimed Rockpool Bar & Grill was the centre of attention for all the wrong reasons in April this year.

A fire broke out in the kitchen during the dinner service, forcing the evacuation of more than 200 diners and staff.

Six fire crews were brought in to fight the blaze, which threatened to spread into the ducting and engulf the entire Hunter Street building. Huge volumes of water were dumped into the restaurant, causing extensive damage to its ceilings, as well as its marble-clad dining room.

“We appointed an insurance broker who identified several underinsurance concerns and gaps in coverage which were rectified immediately.”

Perry says when he first heard about the fire, it was not whether he was adequately covered that he was worried about – it was how long before he could reopen.

“For us to be closed for any length of time is difficult because it’s hard to restart the business. This is a restaurant that has 2000 bookings a week and we were actively cancelling people,” he says.

“That’s a freaky thing to do when your whole life is trying to get people to book. And it’s difficult not knowing when we could actively start rebooking people again and start saying that we were open.”

But Perry says he was overwhelmed by the attitudes of everyone involved in the rebuilding.

 

“Some of the things weren’t even quotable but they just said ‘Get the guys working on it 24 hours a day until it’s finished.’ What was also terrific was the focus on getting us in the same shape as we were before we closed.”

“Of greatest concern to client in this case was day to-day loss of business, particularly across the approaching holiday period of Easter, a highly profitable time for a restaurant.”.

Less than four weeks after the fire started, Rockpool reopened, as good as ever.

Perry says the experience upended his expectations about the insurance industry and particularly the important role an insurance specialist plays in making sure businesses have the cover they need when disaster strikes.

“You hear a lot of horror stories (but) the exact opposite of whatever I thought about the insurance industry happened to us,” he says.

Disclaimer

Conditions apply for each policy and the information expected from you for a policy to trigger. Coverage may differ based on specific clauses in individual policies. Please ask your broker to explain the additional benefits and exclusions pertaining to your policy.

The information provided is general advice only and does not take account of your personal circumstances or needs. Please refer to our financial services guide which contains details of our services and how we are remunerated.

cyber insurance

Online scam attacks becoming daily occurrences

Nearly one in every five Australian businesses are targeted by online fraudsters each day and large businesses are now taking prevention methods more seriously than just 12 months ago, according to new research.

Jeff Price, Managing Director of Experian Decision Analytics APAC, says the unprecedented levels of fraud attacks on Australian businesses is only set to increase.

“Fraud is a serious and growing issue for Australian business. Similar to other markets around the world, we can expect to see a rise in the level of fraud attacks and an expansion in the types of fraud perpetrated on Australian businesses and their customers in the coming year,” he says.

“For example, in global markets, we are seeing the growth of emerging trends like corporate account takeover fraud, which is when an organisation’s business bank accounts are exposed to a fraudster and can lead to massive losses.

“This is an issue we expect to see emerge in Australia in the near future and businesses need to be prepared to withstand these emerging and persistent threats.”

Brand reputation and revenue of businesses are also taking a hit from fraud attacks due to transactions becoming blocked due to additional confirmations for legitimate online transactions, which can result in consumers becoming frustrated and damaging customer loyalty.

“It’s critical for organisations to have the right systems and technology in place to withstand the increasing frequency and type of attacks, yet doing so can’t limit their ability to accept legitimate transactions,” Price says.

“We know that Australian businesses looking to expand into new markets can be challenged by verifying the identity and legitimacy of offshore customers and this can place pressure on their growth.”

We specialise in Cyber Liability insurance. We have access to a suite of specialist insurance policies to cover you and your business against cyber crime and the new data privacy legislation.

Through our underwriting partners, we have arranged specialist insurance policies designed to address the exposures you face from relying on the internet, email, websites, or computer programs, data and from storing private information about your clients. Contact us for more information.

Disclaimer

Conditions apply for each policy and the information expected from you for a policy to trigger. Coverage may differ based on specific clauses in individual policies. Please ask your broker to explain the additional benefits and exclusions pertaining to your policy.

The information provided is general advice only and does not take account of your personal circumstances or needs. Please refer to our financial services guide which contains details of our services and how we are remunerated.

business insurance discount

One big hitch? Industry questions discount campaign

Consumer group One Big Switch has secured hardworking Aussies a 40% discount on home and contents policies – and that can only be a positive insurance story, can’t it?

Not at all, say industry figures, who fear the campaign’s intense focus on price is dangerous and ill-advised. About 70,000 people signed up to the One Big Switch initiative, giving CEO David Issa – a former CEO personal insurance at IAG – the bargaining power to negotiate a bulk deal with Coles Insurance.

News Corp supported the promotion and both the newspaper publisher and One Big Switch – which has previously run similar campaigns on mortgages and electricity – receive a commission for every person who takes out a policy.

Mr Issa says spiralling home and contents premiums “hurt everyone” and force some consumers out of the market.

But National Insurance Brokers Association (NIBA) CEO Dallas Booth is leading the charge against the campaign.

“One Big Switch is a real worry for us. It gives the impression that you can easily reduce the price of insurance by 20%, 30% or 40%. The reality is the only way you can do that is by reducing the cover.”

The campaign is not a threat to brokers, he says, because it focuses on the direct market, but NIBA believes:

“people should be thinking carefully about their cover rather than chasing a cheap premium.

The outcome won’t be realised until they need to make a claim,” he says.

The headline figure of 40% is not as straightforward as it first appears. The discount contains “an exclusive 13% discount for One Big Switch members on top of other existing discounts”, the group’s website explains.

ICA supports competition in the insurance market a spokesman said.

“However, offers to consumers must be fully compliant with the law in terms of consumer disclosure and advice.

It is important that consumers fully understand the risks of switching from their existing insurance policies.

ICA has a number of initiatives underway or completed that directly relate to the issue of insurance affordability, and works closely with governments and customers to help them understand insurance risks and develop practical solutions.”

Disclaimer

Conditions apply for each policy and the information expected from you for a policy to trigger. Coverage may differ based on specific clauses in individual policies. Please ask your broker to explain the additional benefits and exclusions pertaining to your policy.

The information provided is general advice only and does not take account of your personal circumstances or needs. Please refer to our financial services guide which contains details of our services and how we are remunerated.