Quality Financial Advice

Royal Commission Highlights Need for Quality Financial Advice

The Royal Commission into misconduct in the Banking, Superannuation and Financial Services Industry uncovered disgraceful behaviour from some of the biggest names in these industries.

The findings of the Commission created fallout from scorned clients, and sparked conversations across the industries about moving forward.  The MetLife Adviser-Client Relationship Report (2018) looked into how the Commission reports have affected consumer perceptions of the industries and their advisors.

MetLife Australia head of retail sales Matt Lippiatt said, “the Royal Commission has put the spotlight on the need for quality advice and its enduring appeal.”

According to the MetLife Report, consumers and SMEs want to establish a genuine relationship with a financial adviser they can trust.  They are looking for an adviser who goes the extra mile to listen to them, understand their needs and communicate regularly and clearly.  With the right insurance advisor, you can be sure that these needs are met.  Having an insurance advisor in your corner also has a number of additional benefits:

  • Get the Right Advice: As a trained specialist in insurance practices, your broker will give accurate advice and provide the most appropriate insurance solutions to meet the individual needs of your business.
  • Reduce Business Risk: Your insurance advisor won’t just select the most appropriate insurance policy for you, they’ll also help with overall risk management in your business.
  • Keep Policies Up to Date: Your broker will keep up to date with any legislation changes that may result in necessary policy changes.
  • Claims Help: In the event that you find yourself having to make an insurance claim, your advisor will deal with the insurer on your behalf to work to an outcome that you’re satisfied with.
  • A Trusted Business Partner: Your insurance advisor wants what is best for your business and will work together with you to achieve this and ensure the continued success of your company.

If you have any queries about your existing insurance or any risk management strategies, get in touch with your insurance advisor today.

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

Are Your Social Media Channels a Professional Indemnity Risk?

According to the Sensis Social Media Marketing Report (2018), 79% of Australians are on social media, with 47% of small businesses, 49% of medium businesses, and 60% of large businesses having a social media presence.

Social media is becoming an increasingly common way for businesses to promote their products and services to clients and potential clients.  It also gives businesses a new and innovative way to interact with their audience, which, unfortunately has brought with it increased exposure to new risks that business owners should be aware of.

Business owners and employees are under increased scrutiny as the public monitor their behaviour on Social Media platforms.  Statements made by management and employees on the business account are often assumed to be relevant to the employer, and the public want to hold businesses accountable for their online actions.  As such, more liability claims are being made against businesses based on what they are posting on their social channels.

Increased Risks on Social Media

Most of the risks presented by Social Media fall under the umbrella of Professional Indemnity.  They are not necessarily new concepts, however the risk is increased due to the easier spread of information through Social platforms. For example:

  • Companies have been found liable for publishing misleading and deceptive statements on their Facebook and Twitter pages. This was found to be a breach of consumer protection legislation.
  • Publishing confidential information (whether deliberate or accidental) can breach privacy laws.
  • In some cases, employers have terminated staff employment as a direct result of things they have posted on their own social media accounts.  This can lead to employment related claims such as discrimination, harassment or unfair dismissal.
  • Damage to the business brand as a result of the quick Social sharing of information about a product or service failure.
  • Infringing copyright by sharing content that is protected by copyright.
  • Risk of defamation.

If your business is currently active on Social Media, or considering using Social Media, it is vital to be aware of these increased risks.  The first step in managing your risk in this area is to devise and implement strict Social Media policies for the business account(s) as well as for employees. You should also look into your Professional Indemnity Insurance so that you know exactly what you’re covered for.

Speak to your Insurance Advisor 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.

Natural Disasters

Are Your Employees Protected from Natural Disasters?

If your business is not prepared when disaster strikes, your company, reputation, and employees can all suffer.

It is the job of business owners to look forward and identify the best ways to grow and accelerate.  Your business will not grow without a dedicated and reliable team of staff behind you, so it is vital to ensure they are protected in the event of a disaster.  Knowing that they are properly cared for with provisions in place should the worst happen will also help your employees to feel valued and boost their morale.

Australian Natural Disasters on the Increase

The ABC has reported that climate change could triple the frequency of natural disasters in Australia in decades to come.  As such, this is a risk that will potentially pose a threat to your business into the future.

Most small business, at some time during their operations, will be adversely affected by a storm, fire or other natural disaster. Whether you are in a disaster-prone area or not, it’s worth carrying out a risk assessment on your premises in order to be fully prepared should the worst happen.  Ask yourself the following questions:

  • In your business location, what natural events are most likely to affect your business?
  • Do your employees live in disaster-prone areas? Will they be able to travel safely to and from work in the event of an incident?
  • Are your important business documents backed up and stored in a secure off-site location? You may have to access these remotely in the event that you cannot access your business premises.
  • Would your business be able to continue operations if your premises was out of use?
  • How long would you be able to continue operations if this was the case?

The Disaster Recovery Journal reported that after a natural disaster occurs, up to half of small businesses that suffer a major loss, will fail in the following weeks or subsequent years.  This would mean that your employees would lose their livelihoods.

This is where business insurance comes in.  Having appropriate insurance in place can reduce the negative impact a natural disaster may have on your business and employees.  With adequate cover in place for your building, contents and business interruption costs, your business is more likely to survive, and your employees will thrive.

Speak to your insurance advisor today to ensure your business is fully covered.

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.

5 Questions You Should Ask Your Insurance Broker

Insurance is one of the most important investments you can make for your business. When purchasing a policy it is important that you are getting adequate protection, otherwise you are potentially putting your business at risk.

The best way to make sure you getting the right cover is to ask your insurance broker the right questions. The better informed you are of the policy you are getting, the more likely you are to purchase the right cover for you. Below are five of our top questions to ask your insurance broker regarding your cover.

  1. What industries do you have experience working in?

Every industry is different. When purchasing insurance you want to make sure that the insurance broker you are purchasing from has enough experience and understanding of your industry to make informed decisions regarding appropriate cover. A good broker with experience within your industry will help you determine unforeseen risks and find the right cover to help protect you against them.

  1. What does my policy cover me for?

Before settling on a policy, make sure you are fully aware of what the policy entails. A good broker will be able to form a policy that suits your business and is comprehensive for most risks you may face in your industry. By understanding your policy inside and out you can make sure you and your broker are on the same page.

  1. What insurers and underwriting agencies do you work with?

The more insurers and underwriting agencies a broker has at their disposal, the more likely they will be able to source the best deal for you. The main benefit of going to an insurance broker is that they can go to a range of insurers and underwriting agencies to find the most complete cover for you. The quality of the companies your broker partners with may also give you a good idea about their competency to provide comprehensive cover for your business.

  1. What does the claims management process involve?

Oftentimes business owners purchase a policy expecting the claims process to be instant and painless. Unfortunately, the claims process can be very intensive and take some time to resolve. Your broker should be able to help you through every step of the claims process to ensure you are going to get quality and timely support.

  1. How much experience do you have and how long has your company been operating?

Insurance is very important and should be entrusted to someone with a good track record. If your insurance broker has been established in the industry for a long time and built a good reputation, it is more likely you can trust them with the important task of protecting your business from financial risks.

Navigating your business insurance can be confusing. Speak with your insurance adviser if you have any queries about your policy and the details you have provided to your insurer.

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.

How to Protect Your Business From Unfair Contracts

There are laws in place in Australia to protect small businesses from unfair contract terms. The result of these laws are that small businesses are better protected, and there are now genuine consequences for any business that seeks to use unfair terms to gain the upper hand.

The Australian Competition and Consumer Commission (ACCC) has been heavily investigating unfair contract terms and widely recognised businesses, such as Uber, Ashley & Martin and Lendlease, have all been affected.

In the following article we will look at the types of contracts that are protected by this legislation.

Which Types Of Contracts Are Affected By The Legislation?

The latest unfair contract terms legislation is relevant to both ‘small business contracts’ and ‘standard form contracts’. Below we have prepared some bullet points to help you determine whether a contract is either of these types.

Small business contracts must meet the following criteria:

  • the contract is for the supply of goods or services, or the sale of land; and
  • at least one of the parties is a small business (being a business that employs fewer than 20 people, including regular casual employees); and
  • the upfront price payable under the contract does not exceed either:
    – $300,000; OR
    – if the contract has a duration of more than 12 months, $1,000,000.

Standard form contracts are defined by a disparity in negotiating power. One party offers the other party a ‘take it or leave it’ deal. Examples of this type of contract include membership contracts and vehicle rental agreements. Courts determine whether a contract is ‘standard form’ in the following ways:

  • if one of the parties has all or most of the bargaining power;
  • if the contract was prepared by one party before any discussion regarding the contract had taken place between the parties;
  • if the terms of the contract are generalised or take into account the specific characteristics of the parties.

In order for the new legislation to be applied, a contract must be both a small business contract and a standard form contract.

A hypothetical example might be if a 12 month contract was prepared by a larger company demanding a small business pay $1 million by the end of the contract. If this is unreasonable, a small business might be able to argue that the contract terms were inherently unfair.

What terms are considered ‘unfair’ in a contract?

If you are a business that likes to offer ‘tough love’ contracts you may wish to review your contracts to make sure there are no grounds for the ACCC to charge you for unfair contract terms. Some terms that may be considered unfair might be charging customers for services without providing those services, or increasing the price of services without informing the client.

Furthermore, if you feel that you are being victimised by an unfair contract based on the above, it is important to seek further advice.

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.

Does Your Small Business Need Public Liability Insurance?

There are several types of insurance on the market that can help protect your business, one of the most essential is Public Liability Insurance.

Public Liability Insurance protects your business financially from any claims that arise in relation to damage or injuries sustained by third parties and/ or their property during the course of your usual business activities.

Why Is Public Liability Insurance Important?

Public liability insurance protects your business against negligence. If a customer or other third party claims that you or someone in your business has behaved negligently and it has resulted in injury or property damage, public liability insurance can help cover the costs incurred.

Although you would never intend to damage someone’s property, or be involved in a situation that leads to injury, this does not mean you will not be found negligent by a court if any of these scenarios were to occur. Negligence implies not taking proper action in regards to a reasonable foreseeable event; it is nothing to do with intention.

What Does Public Liability Insurance Cover You For?

Public liability insurance protects you financially from any claims made against you, as well covering any compensations costs for which you may be deemed liable.

The majority of public liability policies are able to provide the following coverage:

  • Loss or damage of goods
  • Legal costs
  • Damage or injury caused by your products and services

Some policies may be more extensive than others, by offering additional cover for items such as accidental pollution or first aid expenses.

Although a public liability policy can cover you for a wide variety of scenarios, there are some cases where it will not protect you financially.  The specific circumstances that are not covered will depend on the policy that you choose.  Many public liability policies also have caps on how much they can pay out. There is typically a limit per claim, and on the policy as a whole.  Your broker can discuss these policy exclusions with you.

Does My Business Need Public Liability Insurance?

Most businesses will find public liability insurance relevant to them. However, there are some industries that carry significantly higher risks, where Public Liability Insurance is particularly important. If your business involves any of the following, you should consider Public Liability Insurance:

  • Manufacturing or repairs
  • Working in or visiting areas not owned by your business
  • Regular visitors to your work premises
  • Direct interactions with customers

If you are not sure whether your business requires public liability insurance cover, we recommend that you talk to a broker or insurance professional today about your business and business insurances.

The amount of cover you will need depends on the specifics of your business, but in general, you should get as much as you can afford. Your insurance advisor can help you compare rates and policies from different insurers to find the most appropriate cover for you.  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.

Would Your Business Survive the Loss of a Key Person?

Would your business survive if a ‘key person’ such as an owner, founder, or essential employee passed away? This is a very difficult, but extremely important question to ask.

Businesses are faced with a range of challenges when they lose an integral member of the team who they depend on.  Losing a key person can result in the loss of in-depth knowledge and a valuable skillset, productivity, strategic initiatives and revenue as well as the relationships they have built with valuable customers.

If losing a key employee would affect your ability to continue business operations, Key Person Insurance may be relevant for you.

What is Key Person Insurance?

Key Person Insurance is life insurance on the key person (or persons) in a business. It is only relevant for people who are crucial to the business that the company absolutely cannot operate without. These people can be insured with this form of life insurance, where the company receives an insurance payout if that person dies unexpectedly.

This cover is so important because, in small companies in particular, the death of a key person can mean the death of the entire company.  Key person insurance can help the company survive.  With a financial payout, the company is in a much better position to continue as the insurance proceeds can cover expenses until a replacement person is found.  Alternatively, if the company cannot continue, the funds can help pay off businesss debts, distribute money to investors and pay severance to employees so that it can shut down in an orderly manner, rather than having to declare bankruptcy.

Does Your Business Need Key Person Insurance?

If you are the only employee in your business, generally speaking, you will not need Key Person Insurance, and should consider other forms of life insurance to protect your assets.

If you are an SME with employees, Key Person Insurance may be necessary for you, particularly if there are people within the business whose absence would result in operations grinding to a halt.  In order to determine who in your business may need the insurance, look at your team and think about who is irreplaceable.  In most small businesses, this will be the owner or an employee who holds the company together by assuming responsibilities for keeping the books, managing the employees, handling the key customers etc.

The amount of cover you will need depends on the specifics of your business, but in general, you should get as much as you can afford. Your insurance advisor can help you compare rates and policies from different insurers to find the most appropriate cover for you.  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.

Insurance Fraud Costs Australians $2.2Billion Annually

According to the Insurance Fraud Bureau Australia 2018, insurance fraud is estimated to cost the economy up to $2.2 billion every year.  Fraudulent insurance claims ultimately cost everybody who takes out insurance, directly impacting premiums for honest policyholders.

While some instances of insurance fraud are deliberate, in many cases insurance fraud is committed without the person even realising.  While it may seem that these costs will only impact the insurance company that has to pay out, the consequences of insurance fraud are far more widespread.  When the insurance company has to pay out, costs are transferred to policyholders in the form of higher premiums, higher excesses, or more policy exclusions.

As such, it is important to take all the steps you can to ensure your insurance is up to date and you’re not inadvertently committing fraud.

What Types of Insurance Fraud are There?

Deliberate: Deliberate fraud is a calculated act that has been planned in an attempt to deceive the insurer.  For example, if policyholder deliberately sets fire to their own property, or fakes a theft in order to receive a payout from the insurer.

Exaggeration: In this case, the policyholder does have a legitimate claim, however they deliberately exaggerate the amount of damage caused or the costs of the loss in order to get a higher payout.

Non-Disclosure: Non-disclosure means that the policyholder has not given full and complete information to the insurer, which may affect their decision to insure or pay out a claim. This can be deliberate or accidental. For example, if you are insuring a company vehicle, you may neglect to mention, or be unaware of the driver’s previous convictions.

How to Avoid Committing Insurance Fraud

Insurance companies across Australia and New Zealand are dedicating significant resources to combatting insurance fraud.  Many insurers are using new technology and software to identify insurance fraud, along with providing specialist claims training to identify fraud and engaging with specialist investigators.  Furthermore, the Insurance Fraud Bureau of Australia is working closely with insurance companies to provide them with information relating to possible insurance fraud to aid any investigations.

If you are deliberately committing insurance fraud, it’s important to be aware of the risks that this involves, and the fact that you are likely to be caught out sooner or later.  In order to avoid accidentally committing insurance fraud, here are a few things you can do:

  • Be Honest: Always give accurate figures and report facts. Don’t inflate the value of something or exaggerate the extent of damage.
  • Give Full Information: Particularly in the event of a claim, it’s vital to make sure you tell your broker or insurer anything that you think may potentiallybe relevant.
  • Read your PDS: Your PDS outlines the things that can make your insurance void. By knowing what these things are, you can make sure you avoid doing them.
  • Read Your Duty of Disclosure: Your insurance broker will provide you with a Duty of Disclosure that will outline key information that should always be disclosed to your insurer.

Navigating your business insurance can be confusing. Speak with your insurance adviser if you have any queries about your policy and the details you have provided to your insurer.

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.

4 Year Old SMEs Most At Risk of Failure

Newly released data from Equifax has stated that SMEs in their 4th year of operation are at highest risk of business failure.

Equifax is an information solutions company and provider of credit information and analysis in Australia and New Zealand.  The company’s analysis of External Administration events in Australia in 2017 revealed that this is the most problematic time for Australian SMEs as they typically move into a growth phase at the four-year mark.

Justin Eley, Senior Product Manager, Commercial Risk at Equifax, stated that when businesses start growing, the volume and type of credit enquiries increase, and its risk of default or other adverse events rises in parallel.

“Pushing for growth or expansion in any business is a calculated risk, a large part of which is financial” – Justin Eley

Insurance For Your Growing Business

As your business grows, it is exposed to more risk. In order to ensure the continuing success of your business, you should consider your risk portfolio and identify ways to reduce the risks that your business is exposed to.

Having appropriate insurance in place is one of the most effective ways to manage your risk and ensure the continued success of your business.  As your business grows, it’s important to regularly review and update your insurance program, because:

  • The policies which previously covered your business may not be appropriate anymore
  • You shouldn’t wait for an annual review, but rather speak to your insurance broker as your business changes in order to ensure your assets are always appropriately covered

Having insufficient cover can lead to the accumulation of high costs in the event of a claim, which can be enough to put some companies out of business.  Insurance can be complicated and every business has different insurance needs, which continue to evolve with the business.  As such, it’s important to have an ongoing relationship with your insurance advisor, who can help protect your business now and into the future.

Don’t hesitate to contact us for more information or advice on your business insurance or risk management strategies.

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.

Faulty Workmanship

Is Your Business Covered for Faulty Workmanship?

Insurance policies are full of terms and jargon that can be difficult for business owners to understand and apply to their own real-life situation.  These terms can often be vital parts of policies that determine whether you are covered in the event of a claim or not.‘Faulty Workmanship’ is one of these terms.  Tradesmen across Australia are often left wondering whether they are covered for Faulty Workmanship under their Public Liability policy.

It’s important to note that claims for public liability, especially those involving faulty workmanship, are all judged on the specific circumstances and will be reviewed by the insurer on a case-by-case basis. While we cannot tell you which specific claims would be covered and which wouldn’t, below is a guide to the fundamentals of Faulty Workmanship and Tradesman Insurance.

What is Faulty Workmanship?

While tradesmen take every precaution to complete each job to a high standard, mistakes are a reality of life.

Repairing defective work is going to be necessary for every tradesman at some point.  But if that defective work results in property damage or personal injury to another person, this becomes more complicated.  If you are found to be liable for damage or injury to a 3rd party, costs can add up quickly – and can be high enough to cause bankruptcy.  As such, it is vital that tradesmen have appropriate insurance in place to protect their business and personal finances.

Is Faulty Workmanship Covered Under Public Liability Insurance?

Certain aspects of faulty workmanship will be covered under a tradesman’s Public Liability Insurance policy.  Again, each case is different, but in general terms, costs incurred as a result of property damage or personal injury caused by faulty workmanship will be covered.

Most Public Liability policies will not cover the costs associated with rectifying the faulty workmanship, regardless of whether this work is taken out by your own or another business.

Minimising Your Risk of a Faulty Workmanship Claim

While mistakes are inevitable, there are certain precautions you can take as a tradesman to help you preserve your reputation and your business, such as:

  • Be clear with your customers from the start about the scope of work you are completing
  • Be sure to communicate and document any changes that occur throughout the completion of a project
  • Upon completion, verify with the customer that work has been completed to their satisfaction
  • If there are any disputes, try to work together with your customer to address them appropriately. Consider options such as refund, repair or replacement.
  • Notify your insurance advisor if you have a loss
  • Know the terms of your insurance policy. Contact your insurance agent if you have questions regarding your coverage you have.

Faulty workmanship and defective work can be a confusing area of insurance. Speak with your insurance adviser if you have any queries about what you are covered for.

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.