The Impact of Coronavirus (COVID 19) on Businesses - Does My Policy Cover Me?

Over the past week we have received numerous calls and emails from concerned clients in relation to the current Coronavirus outbreak and the impact starting to be felt throughout the business community. It’s becoming apparent that there will not be too many businesses that COVID 19 will not reach in one form or another.

Professor Allan Manning of LMI Group, who is undoubtedly a leader when it comes to knowledge and expertise within the insurance industry, has addressed this widely asked question in the below paper to assist with understanding insurance coverage in relation to downturn in business or even closure as a result of Coronavirus.

While Australia has been relatively protected from the spread of Coronavirus (COVID-2019), many businesses have been disrupted due to travel, import and or export restrictions.

The purpose of this paper is to explain and warn that general insurance is unlikely to provide the protection that it does for traditional risks such as fire, burglary or storm. This paper looks at business interruption insurance, a similar one about travel insurance is available.

Business Interruption

Traditionally, business interruption policies only cover disruption to a business as a result of damage to ‘insured property’. However, over time, insurers widened the protection to provide coverage as a result of a closure of the business by a public authority for a number of risks, including infectious disease. This was designed to cover things such as an outbreak of Legionnaires disease, or measles; which can close down one or two buildings disrupting a small number of businesses. Notwithstanding this, some policies provide coverage for an outbreak up to 50 kilometres from the business location, but most only cover at or near the premises insured.

While there may be exceptions, where a specialist business has secured very specialist global insurance, the cover afforded by both business packs and standard Industry Special Risks policies, are not intended to cover disruption caused by an outbreak in a different state, let alone a different country. 

The outbreak of the SARS (Severe Acute Respiratory Syndrome) in 2013, prompted insurers and reinsurers to do modelling as to just how large claims could amount to in the event of a major pandemic such as the Spanish Flu, which lasted from January 1918 – December 1920, and resulted in the death of anywhere between 40 and 100 million people. The reality is that the global funds held by insurers could not meet business interruption claims arising from such a large-scale pandemic. We would have no insurance industry to protect against the traditional insured perils.

Not wishing to strip away the coverage that was being offered for localised infectious disease outbreaks insurers –prompted by reinsurers– added an exclusion to their policies, stating that disruption from a number of highly effective diseases were not covered. As such, diseases can arise at any time and originate from new sources, the insurance industry introduced a clause which excludes any disease that is notifiable under the Quarantine Act 1908 (Cth), which has been updated by many insurers in line with changes in legislation to the Biosecurity Act 2015 (Cth).

As of the end of January 2020, Coronavirus is a listed disease and so all, but a few, policies exclusions will take effect. This means that regrettably there is no insurance protection for disruptions to business arising from Coronavirus.

As with any other threat, it is important to consider what risk management measures you can introduce to mitigate the risk to your staff, customers and business. 
 
Risk Management Tips

How to avoid infection:
Here is a short list of ways to minimise the spread of Coronavirus
• Practice good personal hygiene.
• Avoid contact with anyone with or suspected of having Coronavirus.
• Boost your immune system by eating well, exercising, having enough sleep, and keeping your stress levels under control.
• Cancel or delay any travel to affected areas until the crisis is over.

Recommended Actions for your organisation:
• Implement a home quarantine regime for anyone that has travelled to an infected country or is likely to have been in contact with someone infected with Coronavirus.
• Review and update, if necessary, human resources (‘HR’) policies on fitness for work, including possible quarantining of employees and formalising the requirement for employees to remain off work if affected.
• Consider or extend flexible working arrangements to reduce the likelihood of the spread of the virus in the workplace or the community.
• Update travel rules and arrangements limiting non-essential business travel.
• If not already in place, provide sanitized hand washing stations for use by staff and visitors.
• Review arrangements for workplace hygiene and cleaning protocols including “cough and sneeze” etiquette.
• Protect the mental wellbeing of employees concerned about the Coronavirus.
• Ensure clear and honest communication to employees on their welfare.

Keep Informed:
Everyone should remain alert for updates and advice from the relevant authorities on additional steps to manage the spread of the disease.

The health department in each state is providing excellent resources, advice and regular updates.
Before travelling, check for and take the advice of any travel warnings on smartraveller.gov.au.
Business Continuity Management Planning

A pandemic is just one risk facing modern organisations. Having a fully documented and exercised business continuity management plan is important for every business. Visit www.continuitycoach.com to learn more.

Disclaimer
The advice in this paper is general in nature. While the utmost care has been taken in the preparation of this preliminary advice or opinion, you use it at your own risk. LMI Group specifically disclaims any liability, whether based in contract, tort, negligence or otherwise, for any direct, indirect, incidental, punitive, consequential or other damage arising out of or in any way connected with the use of or reliance on the content of the preliminary advice or opinion.

- Professor Allan Manning 

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Kate Koric

Director | Senior Broker

Credit:

Professor Allan Manning (www.allanmanning.com)

LMI Group

Image Credit:

Australian Government - Department of Home Affairs (https://www.homeaffairs.gov.au/news-media/current-alerts/novel-coronavirus)

Tips to help you avoid falling victim to motor theft

Imagine walking outside to head off to work or drop the kids at school and your car wasn’t parked where you left it the day before – not a great feeling is it?

Not just the fact that someone has stolen your vehicle but the myriad of inconveniences that follow due to not having a car to go about your daily routine.

We have compiled a few tips to help hopefully protect yourself against ever having the misfortune of being a victim of car theft.

Secure Your Keys at All Times:

How many of us walk in the front door and throw the car keys on a table in the entry or on the kitchen bench and they stay there until you go to leave the house again? Most of us – that’s who!

As you should with handbags, wallets & purses – remove them out of plain sight of any intruders that may enter your home with ill intent.

Never Leave Your Car Running:

Get in the car and realise that you forgot your phone on the counter?

Turn the car off and take your keys inside to retrieve it. A running unattended car is an open invitation for a car thief.

Lock Your Vehicle:

Whether you are parked for the night or just ducking into a shop quickly, always lock your car. It makes it all the harder for a car thief to get inside your vehicle to get it running and drive away.

Have An Anti-Theft Device Installed:

Not only does an anti-theft device deter a great deal of theft attempts and make a thief’s job more difficult – most of the time you will get a discount on your insurance premium if you have one installed and who doesn’t want to save a few dollars when it comes to that?!

Consider Where You Park Your Vehicle:

Parking your car off the street on your property reduces the risk of not only theft but damage to your vehicle. Where possible use a garage, carport or driveway for parking.

Whilst almost all of us have at one stage had a random dent appear on our vehicles whilst parked in a cramped shopping centre carpark and that tempts us to want to park in the back corner away from the other vehicles – remember that isolated or dimly lit areas are easier for motor theft to occur.

Finally, make sure you have a Hire Vehicle After Theft inclusion on your Motor Insurance policy. Whilst this is not in relation to prevention it is however something that will make your life a lot easier in the time it takes to either recover your stolen vehicle or have a claim paid in order to purchase a new one.

Most policies have allowances to include hire vehicles in the event of a claim but you have to be careful and read your PDS as to the circumstances that a hire vehicle can be obtained.

If you would like some advice in relation to Motor Insurance or have any questions please give us a call on 0452 139 930 or email kate@geminiinsurance.com.au

Kate Koric

Director | Senior Broker

Credit:

Image - www.carsales.com.au

How much is enough?

A common question we get as Insurance Brokers when chatting to clients about their domestic properties during the quote process is …

“How much do you think I should make my building/contents sum insured?”

Whilst we will do the best we can to find you the most suitable and competitive covers - we can’t tell you what to set your sum insureds at. What we will do however, is guide and advise you on the things you need to consider when you do calculate the value of your property for your insurance cover.

When you are calculating the sum insured on your Building Insurance there are more things to account for than just the actual house structure itself. Some additional items that you need to typically include when setting your building sum insured are:

• Any additional structures such as garages, carports, sheds and patios
• Items that are built-in such as in ground swimming pools and water tanks
• Items that are fixed to the building such as awnings fitted externally
• Fixed wall and floor coverings **
• Ducted Air Conditioning
• Fences, gates and retaining walls
• Decks and pergolas

The same question arises with Contents Insurance – there are so many variables from one household to the next such as:

·         How big is the house? How many rooms are there? 

·         How many people live in the property?

·         Is your property furnished with high value designer items?

·         Do you have collections such as stamps, art etc

I find that clients often initially suggest a fairly 'light' value on their contents insurance. Once I ask a few extra questions the insured will generally revise the original amount as there are items that they have not thought of when calculating the figure. It’s easy to look around at your furniture and large appliances and ballpark an amount but there are commonly overlooked items such as:

• Clothing & shoes
• Accessories such as handbags, sunglasses & jewellery
• Carpets, curtains and blinds**
• Linen & bedding
• Books & toys
• Kitchenware
• Ornaments, rugs and wall hangings
• Computers, gaming consoles, TV's, stereos and their accessories
• Pools and spas that are not permanently installed
• Tools and gardening equipment
• Recreational sporting equipment such as bicycles

 ** Carpets, curtains and internal blinds are generally considered contents so you should refer to your applicable PDS to clarify if you are uncertain

In the worst case scenario of a total loss such as a fire, your Home & Contents cover is designed to provide you with the ability to rebuild and restore your home, inside and out.  A major claim is already a traumatic experience for anyone – don’t be faced with the possibility of your insurance policy not providing the full scope of cover in this crucial situation due to inadequate sums insured.

Don’t put it off, take a look around your home today – walk through room to room, open cupboards & drawers, look through the shed and garage. You will be surprised how quickly it all adds up and then compare against your current insurance policy and action any changes straight away.

Below are 2 incredibly helpful calculators that can assist with taking some of the guesswork out of the process of setting your sum insureds on not only your Building but also your Contents.

** Whilst there has been a great deal of research involved in the construction of these calculator tools, they along with the above information are to be used ONLY as a general guide and you need to be confident in the final sum insured nominated on your policy based on your individual circumstances and covers provided. The above does not take into consideration any sub-limits or restrictions contained within certain products offered in the market.

Of course if at any time you are unsure of any details in relation to your insurance program you should contact your Broker or Insurer for clarification.

Kate Koric

Director | Senior Broker

Credit:

Building Calculator – Cordell

Contents Calculator – Sum Insured Pty Ltd

Image - CGTrader.com

Emergency Kit? Why would I need one?

How would you feel if you had to leave your home immediately and leave everything behind?

Are you able to access your important legal documentation away from your home?

It’s a very real possibility that at any time there could be a situation which results in us having to pick up and leave our home without notice in the event of an emergency. Some scenarios would result in us not being able to return to our home for an indefinite period.

It’s constantly advised by Emergency Services to keep a kit with basic items such as a torch, candles, a radio, batteries, bottled water etc. for when storm season rolls around each year to accommodate situations such as power loss.

However – we should also consider an “extended” Emergency Kit that holds additional items including copies of important documentation such as proof of identification, legal documents, insurance policies & medical records. These can be either in paper or saved on a USB - perhaps both!

Whilst it seems like a time consuming task to compile the kit – in the event of evacuation where you may not be able to return to your home for an uncertain period of time, this kit will help avoid many headaches and inconveniences.

The below is a link to an Emergency Kit Checklist which covers the “Essentials” as well as the extra items suggested for storm season.

In addition, I encourage you to also review the below "Prepare Your Emergency Plan" link and discuss with your family. Our workplaces will generally have a protocol in place for emergencies - so why don't we all have something similar for at home to protect our loved ones?

Everyone in your family should know where the kit is kept as you never know who will grab it in an emergency. Of course in the event of a fire emergency it is absolutely a priority to make sure everyone is safely out of the house beforehand.

Remember, preparing your family as best as you can in the event of one of these situations will be invaluable. So set aside some time to sit down and start putting your household Emergency Plan and Emergency Kit together … don’t put it off and wish you did.

Kate Koric

Director | Senior Broker

Image Credit: www.lifehack.org

Checklist Credit: www.getready.qld.gov.au

Winter Safety for Your Home

With the mercury dropping as we head into the Winter months, it's timely for a reminder in regards to a few things to look out for as we start pulling out the heaters, electric blankets and lighting the fireplaces.

In 2015 there were more than 4000 home fires in NSW and 17 accidental fire deaths - this is a devastating statistic and unfortunately across the country there are equally disturbing numbers recorded.

We have listed below some items and processes for consideration in your home during the cooler months as well as others that require attention all year round:

• Check your power cords for any signs of wear and fraying
• Test your smoke detectors
• Never leave children unattended around fires or any other heating devices
• Clean the lint filter in your dryer regularly
• Check that your chimney is clean
• Ensure you always have a mesh screen in front of a fireplace
• If you are using candles always remember to extinguish them before you go to bed or leave your home
• Use heaters to warm your home and then turn them off when you go to bed
• Never leave electric blankets on for more than half an hour and remember to turn them off when going to bed
• Always ensure that heaters are at least a metre from anything that could be a potential burn hazard such as curtains and furniture
• Avoid “piggybacking” cords via power boards & double adapters
• Sit down with your family and discuss and practice an evacuation plan in the event of a fire or other emergency - children are never too young to discuss what to do in an emergency situation.

The QFES have compiled a "Room by Room" guide to help in fireproofing your home - inside & out - it is well worth the read as there may be some items overlooked previously or perhaps just a reminder that it's been a while since last checked.

For the full checklist you can visit the following page link:

www.qfes.qld.gov.au/community-safety/home/Pages/default.aspx

Remember there is no substitute for safety - so take the time to go through your home and be sure that you have done all you can proactively in protecting your family and property from any avoidable tragedy.

Stay safe!

Kate Koric

Director | Senior Broker

Image Credit: NSW Fire & Rescue