CGU CONNECT MANAGEMENT LIABILITY

Transcription

1 CGU CONNECT MANAGEMENT LIABILITY Information Webinar Stephanie Myers/Kate El-Asmar IAG PRI Underwriting 21 January 2016 Version No. 1.0

2 YOUR FACILITATORS FOR TODAY Kate El-Asmar Team Leader, Connect PI & Affinity CGU Insurance Stephanie Myers National Portfolio Solutions Mgr CGU Insurance

3 AGENDA Professional Risks What is Management Liability? Coverage s available under a Management Liability policy Claims examples Notification Overview Potential policy pitfalls CGU Business Protection Management Liability Product Offering & Overview Proposition Target Market Risk Appetite Decline Risks Benefits & Selling Points Cyber Update CGU Connect Management Liability CGU Connect Management Liability Overview Professional Risks Team Key Contacts

4 MANAGEMENT LIABILITY What is it? Management liability is a bundled product which protects directors and officers and the company itself from exposure s relating to the management of the company. A company and its Directors & Officers can face both personal and corporate liabilities from: Shareholders Employees Regulators Customers Creditors Competitors Administrators 4

5 MANAGEMENT LIABILITY Coverage s Available Under a Management Liability Policy Directors and Officers Employment Practices Statutory Liability Company/ Entity Fidelity/Crime Tax Audit Trustees Liability Internet/Cyber Liability Optional 5

6 DIRECTORS AND OFFICERS LIABILITY What is it? Covers directors and officers for their liability for any Wrongful Act. A Wrongful Act is usually defined as any actual or alleged neglect, error, misstatement, omission or breach of authority.

7 DIRECTORS AND OFFICERS LIABILITY Where do claims come from? Shareholders Mismanagement of company assets, insolvency, mergers & acquisitions etc. Employees Harassment, discrimination, failure to promote etc. Regulatory Bodies ASIC, ACCC, ATO etc. Creditors Action to recover debts. Liquidators / Receivers Wrongful trading etc.

8 EMPLOYMENT PRACTICES LIABILITY What is it? Covers claims alleging an employment breach such as: discrimination harassment bullying wrongful dismissal failure to promote breach of contract brought by employees, volunteers or potential employees

9 EMPLOYMENT PRACTICES LIABILITY Claims Examples A small retailer forced to make some redundancies due to a downturn in revenue. All appropriate procedures were followed but 3 employees felt they were being discriminated against due to their mature age. Claims were made for discrimination and the company ended up settling with each employee at a cost of $20,000 each. In 2006, a young woman committed suicide after enduring ongoing bullying by her coworkers at a café. Each offender and the company were convicted and fined under provisions of the Occupational Health and Safety Act. Total fines were $335,000

10 STATUTORY LIABILITY What is it? Provides cover for the Company for any formal investigation by a regulatory, governmental, professional or other authorised institution for a breach of an Act of Parliament. Includes defence costs incurred and resulting Statutory Fine (subject to policy terms). Significant increase in claim activity over the last few years. Over 5,000 individual legislative provisions that can result in fines or penalties. 700 provisions can find a Director personally liable. Work Health & Safety is cited as a key area of cover, however there are many other statutes e.g. Food Act, Liquor Act, Privacy Act, Pollution legislation etc.

11 STATUTORY LIABILITY Claims Example Health & Safety A 35-year-old employee suffered fatal injuries when the fabric sling supporting a 1.8 tonne monorail beam snapped and the beam fell on him. The construction company was convicted and fined $200,000 plus costs. The Director was also convicted and fined $200,000 plus costs plus compensation of $20,000 after pleading guilty to a breach of s61 of the Occupational Health, Safety and Welfare Act 1986.

12 COMPANY LIABILITY What is it? Provides cover for the Company for costs incurred in defending and settling claims bought by third parties. Claims could come from: Competitors Creditors Customers

13 COMPANY LIABILITY Claims Example A small café was sued by a competitor for misleading advertising which was alleged to have caused a considerable downturn in business for its competitor. Whilst the Insured successfully defended the allegations, defence costs totalled $30k.

14 CRIME What is it? Indemnifies the Company for employee dishonesty and third party dishonesty Crime loss is on the increase and can significantly impact Company s financials Crime loss is sub-limited Automatically covered under CGU BPML Policy

15 INTERNET LIABILITY What is it? Protects the Company against third party claims for: Unintentional defamatory statements posted on the company's internet, intranet or in s sent by employees Accidental plagiarism, infringement of copyright, trade mark etc Accidental breach of privacy or unauthorised collection of customers data Negligent transmission of a computer virus, worm, logic bomb or Trojan Horse. 15

16 CLAIMS NOTIFICATIONS Tax Audit 10% EPL Claims 30% D&O/Company 20% Stat Liability 15% Crime/Fidelity 25% 16

17 POTENTIAL POLICY PITFALLS Statutory Liability cover Limited to just WH&S and Pollution legislation No Pollution cover No cover for Consumer Protection legislation or Copyright legislation Inadequate sub-limit No cover for Statutory fines relating to Employment Practices Liability claims Fidelity/Crime cover Definition of Fidelity/Crime Loss inadequate Retroactive Date applies Shareholder exclusion No cover for theft by a director Exclusion relating to discovery of the alleged Fidelity/Crime Loss Tax Audit cover No cover for individuals or self managed super funds No cover for compliance reviews

18 CGU S MANAGEMENT LIABILITY PROPOSITION An SME proposition Transacted via Sunrise ML Connect Targeting SME s with turnover up to $25m Stand alone policy Most sole traders and partnerships can be covered

19 BUSINESS PROTECTION MANAGEMENT LIABILITY (BPML) Combined limits from $1m - $10m available Separate limits from $250k - $5m (except Stat $2m) No financials required unless insolvency is requested Standard excesses Directors & Officers/Company Reimbursement $Nil Statutory Liability $2,500 Employment Practices Liability $5,000 Company Liability $2,500 Tax Audit $1,000 Crime $5,000 * Some industries may attract higher excesses Premiums from $ charges Standard commission online is 22.5% 19

20 BUSINESS PROTECTION MANAGEMENT LIABILITY Target Market The target market of BPML is SME (Private Companies, sole traders, most partnerships and non-profit entities): With turnover under $10m up to a max turnover of $25m Who have been operating for more than 12 months Who have not had any claims or investigations.

21 BUSINESS PROTECTION MANAGEMENT LIABILITY Coverage Parts Coverage Part 1 Directors & Officers / Company Reimbursement Coverage Part 2 Employment Practices Liability Coverage Part 3 Statutory Liability Coverage Part 4 Company Liability Includes Company Reimbursement Employment Practices Liability claims brought against the Company/Entity Statutory Liability claims brought against Company/Entity Covers third party claims defence costs & compensation Statutory Liability Claims made against Directors & Officers Breach of Contract Defence Costs $100k Employment Practices Liability claims brought against Directors & Officers Crime Loss $250k Trustees Liability for employer sponsored super fund Identity Theft $100k Internet Liability $100k 21 Tax Audit Costs $250k

22 BUSINESS PROTECTION MANAGEMENT LIABILITY Risk Appetite

23 BUSINESS PROTECTION MANAGEMENT LIABILITY Decline Risks Construction (builders, project managers, property developers) Mining risks Transport risks Financial risks (financial planners) Publicly listed companies Lawyers / Solicitors / Barristers /Law Societies Unions & Protest Lobby Groups Trusts (where no corporate trustee) Financially distressed companies Local Government entities Start ups Strata s

24 BUSINESS PROTECTION MANAGEMENT LIABILITY Benefits & Selling Points BPML Product Transacting via CGU Connect Management Liability Broad cover and competitive premiums A well-known and respected Australian brand Straightforward to use Choose your own commission up to 30% Targeted question base Crime and Internet Liability automatically covered Specialist in-house claims team Tax Audit automatically covered $250k sublimit Pollution cover is automatic under D&O and Statutory Liability Statutory Liability for entity is sublimited to $2m or the LOI which is less Stat Liability sublimit for Directors & Officers is $1m or the LOI whichever is less Multiple limit options Full lifecycle process Real time response, no ARNs Dedicated Connect team, specialised U/W No manual propositions, uploading, scanning, closings Improved response times

25 POLL QUESTION 1

26 CGU CONNECT MANAGEMENT LIABILITY CGU Connect Management Liability is designed to deliver an e-commerce solution for Management Liability Insurance that will allow CGU to compete more effectively with other major insurers in the SME Management Liability market. The introduction of this system : Provides a quick and easy distribution channel for intermediaries Is a solution that intermediaries can use to quote and bind Management Liability in real time through the Sunrise Channel Is a solution that can be utilised throughout the policy lifecycle Reduces admin and costs of doing business

27 CGU CONNECT MANAGEMENT LIABILITY Landing Page All questions to be completed then referred

28 CGU CONNECT MANAGEMENT LIABILITY General Information Page Triggers for: Annual Gross t/o is greater than $10m Overseas for the Percentage split of t/o by state/territory FTE > 99 Various Entity Types for which BPML cannot be written

29 CGU CONNECT MANAGEMENT LIABILITY Quick Premium Page Fixed excesses Commission adjustments Quick Premium = Combined Cover only. Aggregate Limit of Indemnity up to $10m under Combined coverage

30 CGU CONNECT MANAGEMENT LIABILITY Coverage Type Page Separate coverage requires minimum of 2 coverage types Numerous referral triggers Retrenchment considerations

31 CGU CONNECT MANAGEMENT LIABILITY Claims Information Page A referral will be triggered if YES is answered to any question

32 CGU CONNECT MANAGEMENT LIABILITY Premium Page BPML has the concept of minimum premium Premium breakdown is displayed If a referral has been triggered the Premium screen will not show a premium

33 CGU CONNECT MANAGEMENT LIABILITY Declaration Page CGU will now ask for Intermediary Details at all times Broker comments are posted to the i90 Blackboard (similar to PI Connect)

34 POLL QUESTION 2

35 BUSINESS PROTECTION MANAGEMENT LIABILITY Support collateral

36 BUSINESS PROTECTION MANAGEMENT LIABILITY Cyber Update CGU is currently piloting a Cyber Liability offering 2 different offerings will be made available - CGU Cyber Defence (stand alone offering) - Cyber Extension Cover (for qualifying PI & ICT policies) The offering will be made available to the market after successful completion of the pilot 36

37 KEY CONTACTS Professional Risk VIC & TAS Branch: E: Connect Team: Professional Indemnity Business Protection Management Liability T: and Option 1 T: and Option 2 E: CGUPIConnect@cgu.com.au E: BusinessProtectionML@cgu.com.au

38 QUESTIONS

39 POLL QUESTIONS Q1: On a scale of 1 to 5, 1 being very little and 5 being large, what appetite does your company have for Management Liability cover? Q2: How likely are you to promote the CGU Connect Management Liability product to your customers? On a scale of 1 to 10, 1 being very unlikely and 10 be extremely likely Scale 1 to 10

40 POST WEBINAR Q1: Did you find this webinar to be informative for your educational needs? Rate from 1 to being not very useful to 10 being extremely useful. Q2: What else would you like to hear more about from CGU Insurance? Free-form field