1. Industry Issues Article – across insurance and risk management.
2. MMCP profile – a brief profile of the MartinMinett Directors.
3. MMCP A Brief Look at a Technical BI Insurance Topic
4. MartinMinett EXTENDED Special Offer –
FREE Bus Pack and ISR Claims Consultation

1) Industry Issues
WHEN A CLIENT UNDERSTANDS THE NEED FOR A BROKER – CLAIM TIME!

WE LOOK AT 2 EXAMPLES WHERE CLIENTS DECIDED TO PLACE BUSINESS INSURANCE DIRECTLY AND HAD MAJOR CLAIMS AND COMPARE THEM TO CLAIMS WHERE CLIENTS PLACED THEIR
BUSINESS INSURANCE THROUGH THEIR BROKER

In our last newsletter we commented on the intense spotlight that was on the Insurance Industry throughout 2011 and early 2012 with the natural disasters that hit Australia and New Zealand. We noted that we assisted numbers of brokers and their business clients with their claims and saw many instances where business clients were grateful for the insurance cover that their broker had arranged. In many cases the business insurance cover was critical to the business' survival and the relationship between client and broker was strengthened by the assistance provided.

We noted that the 'good news' stories created by Brokers placing the right cover did not receive much publicity. We believe it's these 'good' claims stories that emphasise the important role of an Insurance Broker.
Often you read on Broker's websites and in Industry advertising that the main reason people should use an insurance broker is to obtain
independent professional advice about their insurance needs. Furthermore that using a broker saves clients time by managing the insurance needs of their business completely, providing one contact point for all insurance requirements and alleviating the need to deal directly with insurance
companies.

But when does this become REAL for a client. In our experience it is at claim time.

As most of you know, we only work for Business Policyholders and we aim to work as a team with the client's broker. For this reason, almost all our work is referred to us by insurance brokers. This year though, we were asked to assist 2 businesses with claim preparation and settlement of 2 major losses (> $1m) where the business owners had placed their business insurance directly (with 2 different direct Insurers). That is, neither business had appointed an insurance broker. One of these major claims was referred to us as a 'business friend' of a broker and the other major claim was for a relative of a client.

Each of the direct policies were 'cheap' and each of the businesses believed they had made premium savings by insuring directly – in our view without understanding the differences in policy coverage available (i.e. not a like for like comparison).....

A numbers of issues arose at claim time including under-insurance and policy coverage issues. Levels of some additional benefits were
significantly less than 'standard' broker channel policies. One of the
businesses had no Additional Increased Cost of Working cover. This severely limited application of any loss mitigation strategies.

We had to spend considerably more time on these claims trying to resolve the many issues. Each of the policies had significantly less claims
preparation cover than the 'automatic standard' cover provided by broker channel policies.

In our view, in these cases it proved to be to our clients' detriment that there was no Broker representing them. There was no 'circuit breaker' to settle issues as there was no Broker to resolve matters with the insurer. In one of the claims, the client had to engage a solicitor to finally settle the claim.
While it could be argued that each of these direct policies were 'cheap',
in our view at claim time the clients lost significantly more than they had 'saved' by not engaging a broker.

A lesson most businesses would prefer to learn before claim time.

Alternatively, there are numerous good news claims stories where clients who placed their business through a broker were pleased with the claims outcome and that their insurance policy responded as expected (claims referred to us by brokers). There are a number of multi-million dollar corporate claims that we have settled that we could cite but here's one simple SME example. A client, who had for a number of years declined to follow his broker's advice and take out BI insurance cover, was finally convinced this year to take out BI insurance. Lo and behold, the business had a 'minor fire' that caused property damage from not only the fire but smoke and water damage that resulted in a six figure MD claim. More importantly, it resulted in an even bigger six figure BI claim. With the broker's and our assistance (working as a team) the client had a settled and paid MD and BI claim within 6 months of the loss.

There is no doubt, this client was glad his broker had convinced him to take out BI insurance cover.

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 13 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 MartinMinett Update
A BRIEF LOOK AT A TECHNICAL
BI INSURANCE TOPIC

It is generally well understood within the industry that business interruption insurance covers losses to an insured following insured damage.
It is not so well understood that an insured incident can also cause insured business interruption to a business that has not had physical 'damage'.

Examples such as prevention of access, restricted ability to purchase from a supplier or sell to customers, failure of a public utility, closure by pubic authority and wide area damage, can all cause insured business
interruption to a 'non-damaged' business.

In this issue, and in following Newsletters, we will briefly look at these 'deemed damage' areas of Business Interruption insurance.

One of these areas where we see some confusion is in regard to Prevention of Access (in Business Package policies) or Premises in the Vicinity (Prevention of Access) under ISR policies.

Importantly this covers relevant interruption from prevention or hindered use or access. This year, we were involved, at the instigation of the Insured's broker, from day one, in preparing, and successfully settling, a six figure claim where there was a short term (days) of prevention of access and long term (months) of hindered access.

These claims are more difficult to resolve if we are not involved from the outset.

It should also be noted that there are policies in the market that do not cover hindered use or access and have restrictive "Prevention of Access" cover.

This limitation in cover could cause clients and their broker issues at
claims time.

4) MartinMinett EXTENDED Special Offer
FREE Bus Pack and ISR Claims Consultation
Following the success of this offer in 2012, MartinMinett Claims Prep have decided to extend into 2013 this offer to all brokers and their business clients of a 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.