The Advisr team are excited to announce that we have been chosen as a finalist in the Australian Insurance Awards for 2018.
Advisr is a finalist for the Insurtech Program of the Year award and the other finalists for this award include: Cover Genius, CHU Underwritters and MLC Life Insurance.
It is a great honour to be a finalist amongst other great organisations. To see all the Finalists for the Australian Insurance Awards.
This recognition builds on other awards that Advisr has been selected during 2018 for including the Insurance Business Insurpitch Tech Den Winner 2018 and finalist in the MetLife Foundation Inclusion Plus, Cisco Start Challenge.
Advisr connects SMEs with insurance brokers they can trust. We attract thousands of customers, looking for brokers that can help them find the right insurance for their specific needs. Brokers can add content focused on their areas of expertise and can answer customer questions about insurance via the Advisr Q&A.
Comprehensive Business Insurance
When unexpected events occur in a business, having the right insurance cover can help protect a business’s assets, contents and stock.
While every business is unique and differs in its needs, small- and medium-sized businesses usually require a standard set of policies.
That’s where comprehensive business insurance comes in.
What is comprehensive business insurance?
Comprehensive business insurance is designed to protect SMEs from undue risk, reducing their inherent vulnerability with a set of policies that focus on where risk is most likely to occur.
This kind of ‘package’ cover provides a robust foundation for addressing legal and financial risks. By packaging all the essential types of insurance together that your business needs, you’ll likely pay a lower premium than if you were to purchase standalone insurance policies.
What can comprehensive business insurance cover?
Comprehensive business insurance provides SMEs protection that covers risks like property damage or loss, interruption to business income, machinery, electronic breakdown, third party injury/property damage from business-specific products or operations, or loss that may result from government investigation.
These usually come under a ‘commercial package’ insurance, intended specifically for businesses.
In terms of commercial car insurance, ‘comprehensive’ cover usually entails cover for damage done to one’s own vehicle and other people’s property, theft, a few other risks, plus any associated legal fees. As the name suggests, cover is comprehensive and usually can cover the full areas where business risk can occur.
What does comprehensive business insurance leave out?
‘Comprehensive’ business insurance can be thought of as a ‘one-size-fits-all’ solution, in that it aims to provide cover for the most standard and commonly-experienced risks and situations that many businesses face.
Obviously, then, comprehensive can leave out cover for situations that are just as ‘commonly’ faced but not common to all businesses. Examples include:
- Product liability
- Goods/property in transit
- Loss to computer data
Consider this: What may be ‘comprehensive’ for an office-based business may not be so for a construction-based business.
An insurance firm that specialises in serving only one kind of client — either the office-based client or the construction firm client — should be approached by that type of client if the business really intends to take full advantage of a comprehensive cover that suits their needs.
As you’ll see below, brokers are the best way to wade through and make sense of these differences.
Why can brokers help you find the right comprehensive business insurance policy for you?
It’s quite clear that brokers save businesses and individuals both time and money on their policies. First off, brokers are ‘in the know’ and maintain a relationship with various companies, giving them access to specific deals that they can avail their clients of.
Secondly, brokers help to save their clients the time it would take to do research on specific policy covers and compare quotes.
However, when it comes to comprehensive business insurance, there is yet another way a broker goes above and beyond.
Some insurance providers have specific policies that cover and differentiate between an office-based business, a ‘tradies’ package or commercial strata. The latter would include options that focus on accidental loss or building damage, damage to common area contents, third party injury, office bearer’s liability, personal accident cover and machinery breakdown.
Essentially, what constitutes ‘comprehensive’ business insurance does vary from provider to provider. What’s more, every insurance provider structures their packages and offerings slightly differently, as seen above. They have various specialities — for example, some insurance providers might serve all SMEs but have an unspoken niche providing ‘comprehensive’ coverage for IT firms. This would vary greatly from a provider who mainly serves agricultural or even construction firms.
The expertise and experience in these subtle nuances are why it’s best to rely on a broker. It’s not only about sniffing out the best deal but finding a policy or cover package that actually suits the business’s needs.
Industries that need comprehensive business insurance.
There are many industries that can benefit from a comprehensive business insurance package. If your business falls under one of these industries, consider bundling up your costs and bringing in some savings using a comprehensive cover:
- Property & property management
- Health and community
Without protection, you may be putting your personal assets at risk.
- If you are offering advice within your profession and a loss is suffered by the third party, you may be held liable
- Often the value in a Professional Indemnity policy is the defence costs
- Insurance companies are able to quickly appoint specialist legal representation with knowledge of your field of expertise.
- Without insurance protection you may be putting your personal assets at risk
- Speak to your broker about the benefits of Professional Indemnity Insurance
Professional indemnity insurance originated from a professional persons duty of care at common law. You may ask, why would I need Professional Indemnity? Justice Kirby pointed out that it is important to ask yourself “Is the advice based on a skilful answer?” In the context of the business as a whole, what is being provided? Where you are offering advice and services within a particular profession and the third party suffers a loss arising out of that advice, you can be held liable for that loss. These causes of action against you would not be covered by a more general liability insurance policy.
Often the value in a professional indemnity policy is the legal defence costs. If the third party alleges your advice was negligence and/ or it caused them a loss, the insurance policy will pay for your legal costs to defend that action, regardless of whether the action is eventually baseless. In addition, the policy will pay for damages awarded against you, which is in effect an amount awarded to the third party to rectify or compensate for the error caused by your business.
Without such insurance protection professional persons put at risk their personal assets, the house and any other assets that you might own. It is often a misconception that the professional can set up a legal entity as a form of protection against this risk. By simply closing down that entity or ensuring it has no assets, this does not prevent the third party from suing you personally for errors caused.
On this basis Professional Indemnity Insurance is essential for asset protection. On numerous occasions a Professional Indemnity policy has saved the professional person from personal bankruptcy and the closure of their business. Whilst you may only charge a fee for services of say $50,000, your advice may result in an error that causes a financial loss of say $2,000,000. A client seeking compensation of this size would have substantial impact on your business’s future, without any reserves or a suitable Professional Indemnity in place. Specialist legal representation is a relief to policy holders in the event of a claim against them as Insurance Companies have a panel of solicitors well versed in Insurance Law and the policy holder’s occupation waiting to defend the Insured party. Finding suitable legal advice independently and within your field of expertise can be both difficult and costly at short notice.
It is professionally prudent to carry Professional Indemnity insurance. To operate without coverage is arguably exposing your clients to unnecessary risk and may deter a client from employing your services. It is not only protection for yourself; it is also protection and a form of risk management for your clients. If you make a professional error, there is an insurance policy to put your client back into a pre loss position, in effect restitution.
It is common for Professional Indemnity policies to cover the principals and the employees of the company. This usually means the policies specifically exclude any cover for sub consultants in their own right. If you are the employer using sub consultants ensure they have their own cover. If you are acting as the sub consultant, check and find out if you are in fact excluded by the employers Professional Indemnity policy. If so you are legally exposed. Your concern is not whether the employer engaging you will sue, the exposure is that their Insurer is certain to sue you if they feel that in any way you contributed to the alleged loss through a subrogation action.
A caution to you, signing contracts can have the potential to impact upon your insurance cover! A common issue we find faced by Contractors is that they are often expect to sign a contract before they are engaged and the contract can be a minefield of onerous terms and conditions placed on them. An important issue to consider is that most Professional Indemnity Insurance policies have an Assumed Liability exclusion. What this means is that if you enter into a contract and hold a third party harmless (i.e. carry their loss or agree to not be able to pursue them for contributory negligence) then you may have just prejudiced your Insurer as they will not be able to take action against this party. This clause allows the Insurer to reduce the cover under your policy by the amount they have been prejudiced by you signing up to these contractual warranties, guarantees or indemnities.
Austbrokers Countrywide can assist clients who have Insurance polices through our office by reviewing their contracts to determine if there are any Insurance and indemnity clauses which may impinge upon or threaten the level of cover under their Professional insurance. Seek professional advice when reviewing contractual exposures. Always aim for contracts to be proportionate in nature, that is, each party will be liable for their own losses and their own negligence.
Professional Indemnity is essential for a business providing advice and professional services. The points outlined above make it clear that it a necessary annual purchase to protect both yourself and clients.