1. Industry Issues Article – Looking at a Business Interruption Insurance topic.
2. MMCP profile – A brief profile of the MartinMinett Directors.
3. A MMCP Tip or Update – Tips on removing Co-Insurance issue from BI cover.
4. MartinMinett Extended Offer – FREE Bus Pack and ISR Claims Consultation.
5. MartinMinett Services – Claims Preparation Services.

1) Industry Issues
COMPARING BUSPACK POLICY COVERAGE AT CLAIM TIME - Comparing a Direct Policy with a Broker Buspack - The Importance of Advice versus Price.

In this issue we look at the importance of advice versus price when purchasing Business Insurance policies. While traditionally most companies have placed their business insurance through a broker and relied on their advice, it would seem that an increasing number of businesses are electing to buy their business direct (either through the internet or a call centre). A 2013 insurance survey showed that almost 1 in 4 (25%) of Australian businesses with 20 - 200 Employees did NOT have a Broker and even more businesses with less than 20 employees do not use a broker.

It is easy to generally state that Broker Buspack policies have greater Cover and Limits, Better Definitions, General Conditions Less General Exclusions than the generally available direct Buspacks. What Brokers have told us is that is more effective to note some of these important differences to clients and potential clients. Some examples of these differences are listed below and are based on a Direct Claim we prepared versus the numerous Broker sources claims we also have prepared.

Example 1 - Extra Cost of Reinstatement:

Broker BusPack

• nominated ECR in addition to Sum Insured
• No 50% Limit - ECR Limited to whichever is greater:
  • The amount shown in the schedule in addition to SI; or
  • 10% of the total sum insured for this section; or
  • The balance of the sum insured
• Extra Methods of Settlement: e.g. Branded Goods, Loss of Floor Space etc.

Direct BusPack

• ECR included in Sum Insured - PLUS – Limit where damage < 50% - to extent that SI not otherwise exhausted

Example 2 - Extra Cover– Removal of Debris

Broker BusPack Difference - ROD Limit (no Consent Required):

• $100,000 or
• 20% of the total sum Insured; whichever is the greater; or
• The amount shown in the schedule; or
• The balance of the sum insured

Direct Buspack

• ROD Cover normally sub-limited to Only $25,000 (Prior Consent Required)

We have prepared numbers of Claims with ROD cost > $25,000

Example 3 - Extra Cover – Claims Preparation Costs

Broker BusPack Difference:

• Automatic $25,000
• Option for higher amount to be specified in BI section by Broker
• Normal Broker Buspack clients have Claims Prep Cover >$50k

Direct BusPack

• MD Nil. MD/BI Default-min $5,000! Prior Consent required
• Any greater has to be specified - ONLY BI or MD+BI Claim – No MD Only

Adequate Claims Prep Cover is IMPORTANT when a CLAIM occurs

Example 4 - Personal Property of directors & employees

Broker BusPack

• $5,000 per person PLUS & $ aggregate only Limited by Contents Sum Insured!

Direct BusPack Damage

• limited to: $1,000 per person and $5,000 in the aggregate!

We have prepared numbers of Claims with Directors & Employees cost > $5,000

PLUS Broker BusPack S1 - 10 More Extra Covers & 5 Additional Benefits!

• Catastrophe Escalation (extra 20%), Mortgage Discharge, Government Fees, Landscaping, Loss of Land Value, Playing Surfaces, Rewards, Removal of Trees, Taking of Inventory, Undamaged Foundations
  
• Vacant Building Glass damage, Prevention of Imminent damage, Temporary cover for new premises, Trace & Access (Leaks), Theft of External Property

Insured NOT with a Broker Buspack = less cover = No claim or smaller claim

Compare General Conditions – ‘Dial before you Dig’

• Direct BusPack requires that the Insured make the enquiry in every case
  
• Broker Buspack Difference: Policy states enquiry must be made by the Insured OR the Insured’s principal e.g. Head Contractor

Compare General Exclusions - Unoccupancy

• Write backs to Unoccupancy Exclusion Direct BusPack – No Write-backs
  
• Broker Buspack Difference Write backs include:
  • Lightning - Earthquake, Impact by various objects, Riots, Civil commotions & Strikes

Compare Basics of BI Insurance Wording

• Direct BusPack
  • 1 Option : Loss of Insurable Gross Profit (GP)
  • Claims Preparation Costs (CPC) Default $5,000!
  • AS AN OPTIONAL COVER - Additional Increased Costs of Working (AICW)!
    
    
• Broker BusPack difference
  • 3 Options : Loss of Insurable Gross Profit (GP) and Loss of Annual Revenue (AR) & Weekly GP
  • Claims Preparation Costs (CPC) Min $25,000 – General Cover

Nearly all Brokers also take out extra Min $25,000 CPC for BI Section. Total $50K Min.

Additional Increased Costs of Working (AICW) – Broker value add – Declare an Amount!

Fundamental Differences - BI Insurance

• Broker BusPack Difference – 13 Extra Covers & Additional Benefits that provide Broader & more cover compared to:
  
• Direct BusPack – generally Additional Benefits only

Broker BusPack BI Insurance - Extra Covers & Additional Benefits (Inclusions & Extensions)

• 5 Extra Covers including:
  • Premises in the Vicinity/ Prevention of access (includes by Order of Local Authority if Threat of Damage)
  • Infectious Diseases etc. (From as well as At)
  • Fines & Penalties (5% of SI vs 20% of SI)
    
• 8 Additional Benefits including
  • Utilities (No Deductible if on or Adjacent)
  • Customers & Suppliers’ premises
  • Loss of Attraction – Shopping Complex, Roads, Bridges & Railway Lines (Direct BusPack – No Cover)
  • Transit (10% of SI vs 20% of SI)

Broader MD, BI Cover & there’s more……in other sections of the Buspack policy but the examples above adequately demonstrate the value offered.

These example differences listed above are based on Steadfast and AIMs Buspack policies compared to a Direct Policy.  They illustrates the importance of advice versus price that becomes apparent at claim time when the Insured has a Business Insurance loss and they are hoping they have the best cover (not the cheapest price).

2) A brief Profile of the MartinMinett Directors
ROB MARTIN & PAUL MINETT

Rob Martin has gained a wide range of experience over 20 years in insurance accounting and insurance operations within the industry. In that time, Rob has worked as an external auditor of Insurance companies, in internal management for Insurance companies and was a Partner and Director for 5 years at MSM Loss Management specialising in business interruption insurance. In particular, Rob has experience in preparing claims with technical, legal and detailed insurance and accounting issues as well as the ability to negotiate favourable outcomes for business claimants.

Paul Minett has dealt with Insurance issues for companies both in internal management and as an external consultant over the last 25 years. Firstly, as a Financial Controller and then in the last 14 years as an Economic Loss Expert, Paul has used both his technical and modelling skills on detailed projects for clients to ensure they achieved the best outcome. For 12 years, Paul was with MSM Loss Management and for 5 years was a Partner and Director. Paul has specialist experience in preparing and settling claims in all business sectors and in particular for retail, food and beverage, logistics and mining and metal processing industries.

Over the last decade, Rob and Paul have managed the preparation, lodgement and the resolution of insurance claims for a diverse range of clients ranging from multinational companies through to middle market businesses. They have also liaised with senior counsel and solicitors and compiled expert reports on quantum of loss claims for mediation and litigation matters.

3 A Brief Look at an Industry Topic
How to Minimise issues with a “property damage” claim and have it settled efficiently.

We have been asked a number of times to give advice as to what business clients should do so that their ‘simple’ property damage and increased costs claim can be settled as efficiently as possible. Here are seven quick tips:

1. Notify your Broker as soon as possible – they can then decide from the outset (and before issues arise) whether external claims assistance is needed.
   
2. Protect asset(s) from further damage./ Implement Disaster Recovery Plan (DRP)
   
3. Isolate damaged area and separate damaged asset(s) from undamaged asset(s). Keep photographs as evidence of incident. Write some brief notes at the time of the incident.
   
4. As soon as practical, list all Property, Stock & Contents damaged.
   
5. Retain any piece of equipment or property which may be the cause of the incident.
   
6. Setup an account or cost centre to record all costs related to the Insurance claim – if in doubt include it – later on it is easier to review and remove items than have to go back and search through all invoices since the date of the incident.
   These costs should include:
   
   • Details of Additional costs associated with meeting contracts (e.g. customers and suppliers commitments);
     
   • Details of Additional costs associated with meeting regulatory requirements;
     
   • Details of costs for rental machinery/premises; if applicable;
     
   • Details of any other costs associated with cleanup or other increased costs consequent to the incident
     
7. Obtain Rectification detail including:
   
   • Quotations for reinstatement of damaged asset(s).
     
   • Quotations on salvage value of asset disposals (if any).
     
   • Scope of Work detailing whether asset(s) damaged are to be
     repaired or replaced, clear agreed timeframes and cost of repair or replacement.

Finally, take the relevant information from the 8 points above and have the claim prepared so that it is supported with adequate detail to enable efficient settlement.

4) MartinMinett Extended Offer
FREE BUS PACK AND ISR CLAIMS CONSULTATION

Following the success of this offer, MartinMinett Claims Prep have decided to extend this offer to all brokers and their business clients ofa FREE telephone consultation on any ISR or Bus Pack material damage and business interruption claim.

If a business client has a claim you can call us for up to 30 minutes FREE advice on any claim query on entitlements under an ISR or Bus Pack insurance policy.

Please feel free to call 02 9248 0439.

5) MartinMinett Claims Services
OUR SERVICES - Claims Preparation

MartinMinett Claims Prep assists brokers and their business clients to prepare material damage and business interruption claims. Its principals, Rob Martin and Paul Minett, have assisted many clients to ensure they receive the full claim entitlement from their insurance policy. MartinMinett Claims Prep helps to minimise disruption and works to save time and money for the client and the broker.

Generally claim preparation costs are covered under the business client's policy and therefore at no cost to your client they receive a financial and service benefit. In addition the broker saves time and cost while still keeping control of the claim process by using the services of MartinMinett Claims Prep. A real win/win/win scenario.