DEMYSTIFYING INSURANCE FOR COMMUNITY ORGANISATIONS Presented By Mark Fredericks & Brendon Durrant of Insurewest Pty Ltd
General Advice Warning This advice does not take into account any of your particular objectives, financial situation or needs. For this reason, before you act on this advice, you should consider the appropriateness of the advice taking into account your own objectives, financial situation and needs
Who are we? Insure West Pty Ltd WA owned and operated Established in 2010 Closely associated with the community/not-for-profit sector for 15 years Specialist Broking Service for the not-for-profit sector
The aim of this workshop To provide an overview of: Needs to take out insurance Types of insurance policies Details of each policy covers Key issues to look for in each of the policies Also to answer you questions
YOUR NEEDS
Why do community organisations have insurance? Required by: Law such as workers compensation Funding bodies Landlords ie. Public liability or property insurance Boards/Management committees ie. Directors or Officers For security & peace of mind
Service Agreement Workers Compensation Workers Compensation insurance in accordance with the provision of the Workers Compensation and rehabilitation Act 1981 (WA), including cover for common law liability for an amount of not less that $50M for any one occurrence in respect of workers of the Service Provider. The insurance policy must be extended to indemnify the principal for claims & liability under section 175 of the Worker s Compensation and Rehabilitation Act 1981
Service Agreement Public Liability A public and products liability insurance policy covering the legal liability of the Service Provider, its employees and volunteer workers arising out of the Services provided in connection with the Service Agreement for an amount of not less that $5M for any occurrence, unlimited in the aggregate except for products liability limited in the aggregate to the sum insured The limit of indemnity may be determined by funding provider
Service Agreement Professional Indemnity A professional indemnity insurance policy for any breach of duty of a professional nature by the Service Provider or any volunteer worker engaged by or on behalf of the Service Provider in respect of the Services provided in connection with the Service Agreement.
Service Agreement Professional Indemnity The insurance policy must be for an amount of not less that $1M for any one claim with a provision of one automatic reinstatement of the full sum insured in any one period of insurance and must be extended to include claims made under the Trade Practices Act 19074 or the Fair Trading Act 19987. The insurance policy must be maintained for at least 6 years after termination of this service agreement To be determined by (run off cover) funding provider
Service Agreement Personal Accident Insurance for Volunteers A personal accident policy covering volunteers while undertaking voluntary duties for the Service provider. The coverage is to provide a capital sum of not less than $50,000 per person for the death or permanent total disablement & weekly compensation entitlements for employed and self employed volunteers of an amount up to 1% of the capital sum, but not exceeding in any case the normal weekly remuneration of the volunteer.
Service Agreement Motor Vehicle Liability A motor vehicle third party insurance policy covering legal liability against property damage and bodily injury to or death of persons caused by motor vehicles used in conjunction with the Services provided in the Service Agreement for an amount of not less than $30M for any one occurrence, unlimited in the aggregate. (Note: a comprehensive motor vehicle insurance policy will include Motor vehicle third party liability insurance)
Service Agreement Compulsory Motor Vehicle Liability Compulsory third party insurance and required under any statute relating to motor vehicles used in connection with the Services provided in the Service Agreement (Note: any motor vehicle that is appropriately licensed and registered by the WA Department of Planning and Infrastructure will automatically have Compulsory Third Party Liability Insurance in force upon registration)
Insurance Program Basics Organisations are required to tell their insurer all material facts All parties must be open and frank in their discussions and dealings Organisations are required to: Provide a full description of the activities undertaken by the organisation Disclose details of their claims experience Notify the insurer of any material changes such as changes in the activities undertaken by the organisation
TYPES OF INSURANCE
An Insurance Program Classifications 1. Cover for the Organisations Personnel Workers Compensation, Voluntary Workers, etc. 2. Cover for the Organisations Liabilities Such as Public Liability, Professional Indemnity, etc. 3. Cover for the Organisations Assets or Revenue Such as property, motor vehicles, etc.
1. Organisations Personnel Workers Compensation is: A statutory policy, with little variation between insurers Compulsory for all workers Defined worker can also be extended to include sub-contractors Overseen by WorkCover WA, who administer the WA Workers Compensation and Injury Management Act 1981
Workers Compensation Employers are required to estimate gross wages in advance, and then provide a declaration of wages paid at the end of their insurance period This may result in an adjustment to the premium, by way of return premium if over estimated or extra premium if under estimated
Voluntary Workers Covers voluntary workers in the event that they are: Injured, disabled or die while acting as a volunteer for the organisation. Provides: Weekly benefits, for volunteers who are engaged in paid employment Capital benefit (death and disablement) Non Medicare treatments and other benefits, depending on the injury
Voluntary Workers Important to note: Will not pay for anything that would be covered by Medicare, including the gap Will only pay the difference in salary between the volunteers pre-accident income and current income Is limited in the number of weeks cover after an event Will not pay where the volunteer had a pre-existing condition Policy can be extended to include work placement/work trial or ongoing placements. Extra premium required
Employee Journey Cover Covers the employee if they have an accident whilst travelling to and from work Important to note: An employee is not covered by Workers Compensation Insurance until they reach their workplace In the event the worker is travelling, cover ceases at point of departure whereby Workers Compensation applies
2. Organisations Liabilities General (Public and Product) Liability is: Critical policy usually a requirement of funding bodies To indemnify an organisation for amounts it is legally liable to pay as a result of an occurrence in connection with the business Required if you engage anyone as a sub-contractor Any contracts may effect the insurer right of subrogation (stand in place of)
General (Public and Products) Liability Things to attend to: It is an Occurrence policy (entitled to indemnity a rising from any occurrence during current policy) The level of cover required by funding agreements Policy exclusion need to consider whether they are required Affordability for your organisation to pay the excess
Association Liability Incorporates cover for Professional Indemnity (Errors and Omissions) Directors and Officers Liability Association Reimbursement (Entity Cover) Employment Practices
Association Liability Professional Indemnity (Errors and Omissions) is: To indemnify against claims for compensation due to a breach of professional duty by reason of any negligence through an act, error, omission or advice Usually having a limit of indemnity for any occurrence and an aggregate limit of indemnity for the policy period
Association Liability Who is a professional? Any person holding themselves out to have a special skill, which can be relied upon by another. Anyone who gives another person advice and/or services of a skillful character according to established discipline
Association Liability Common extensions for Professional Indemnity include: Libel and slander Fidelity guarantee Fraud and dishonesty Loss of documents Fines and Penalties Tax Audit Breach of Contract
Association Liability Key issues to look out for with professional Indemnity Claims Made wording, therefore extremely important the insurer is advised as soon as it becomes evident that there is the potential for a claim to occur Relevant exclusions Excesses
Association Liability A Directors and Officers (D & O) policy indemnifies: The Insured (usually meaning the directors and employees) for any loss for which they may not be legally indemnified by their incorporated body due to any wrongful act committed by them It is important to note that the insuring clause relates to individuals and not the organisation Have adequate cover as EACH director could be joined to an action
Association Liability D & O will usually cover: The directors and officers personally against legal liabilities (payment of damages and/or compensation) which they may incur whilst carrying out their duties The costs of defending claims in a court of law and other costs associated with defending any actions Other areas such as loss of documents, breach of legislation, breach of contract, libel and slander, breaches of copyright
Association Liability Key issues to look out for with D & O It is a claims made policy Check the policy exclusions & the policy extensions (such as outside directors, trusteeships) Level of indemnity (i.e. too low, or too high) Excesses
Association Liability Employment Practices covers the organisation If an employee decides to take legal action against them for such things as: Wrongful dismissal, harassment, invasion of privacy, discrimination claims, or breach of contract Against damages, judgments and legal costs incurred in defending employment related claims. It will not pay for fines or punitive damages This policy differs from D & O in that it protects the whole organisation against the claims, not just the directors personally
Association Liability Other insurances available include: Association Reimbursement (Entity Cover) Provides protection to the organisation itself where it becomes leally liable for claims not covered under other sections of the policy Effectively a catch all section
3. Organisations Assets or Revenue Business/Office Insurance Policies Fire and Specified Covers loss or damage to your organisations office building/s and contents caused by fire, storm, rainwater malicious damage, earthquake, windstorm (cyclone), explosion and other perils that are named in the insurance policy. The loss or damage must be unexpected and must be caused by a named peril for the policy to respond. Important to note: Flood is often not covered Named cyclones and earthquakes have a higher excess Underinsurance will result in average clause being applied
Business/Office Insurance Policies Business Interruption: Provides cover if your business is interrupted through damage to property by fire or other insured perils It pays your employees wages, ongoing costs and additional cost of working costs if alternative facilities are necessary. Important to note Is the cover sufficient, and of a long enough period, to cover you after an insured loss?
Business/Office Insurance Policies Burglary Covers theft of property and damage by burglars, following forcible entry to your premises. Under some policeis you can also claim for business interruption. The policy does not cover theft by a staff member. Theft in the open air is not automatically covered Important to note The level of the security of the premises will affect the amount of premium payable. Generally need at least deadlocks on all external doors and keyed window locks.
Business/Office Insurance Policies General Property Provides cover for the cost of repairing or replacing specified items that are stolen, accidentally lost or damaged, such as laptops, cameras, mobile phones, tools, etc., including when they are out of the office Important to note It is expensive insurance as the risk of loss is greater Items to be covered need to be specified and valued Insurer needs to be notified if you buy new equipment Will generally cover theft from a locked vehicle if the entry is forced or violent
Business/Office Insurance Policies Other policies include Plate of fixed glass Covers cases where glass is accidentally broken. Cover is provided for the cost of replacing or fixing the glass, but not for injuries or damages that result from the glass breakage Fidelity Guarantee Proves cover against loss caused by misappropriation of funds and/or property by employees or committee members of the organisation
Business/Office Insurance Policies Other policies include Machinery Breakdown Covers the breakdown of mechanical and electrical plant and machinery The policy excludes damage caused by wear and tear Money Covers the loss of money while on the premises or to and from bank Can be extended to include employee dishonesty
Commercial Motor Vehicle Provides cover for all vehicles Various extensions are available depending on the organisations needs Important to note Cover varies considerably between insurers Premium may be increased for drivers under 25years and drivers with poor driving record The difference between Agreed Value & Market Value The potential cost to the organisation if you have a vehicle on finance
Landlord Insurance Provides cover for residential buildings the organisations rents out Policies can cover public liability, fixtures and fittings and will even compensate you for loss of rental should the building be damaged and uninhabitable or (at a cost) if your tenant does a runner. You can also get cover for legal costs if you have to take your tenant to court) Important to note Can the property be replaced for the amount it is insured for? Check the exclusions excesses
Composite Motor Policy Funding agreements usually require organisations to insure vehicles, used in connection with the services, for the Legal Liability, Property Damage and Bodily Injury of death of persons caused by Motor Vehicles
Motor Composite Who needs to take out the cover? Employee or Volunteer can extend their existing Private Motor policy Need insurers to acknowledge the vehicle usage, policy period etc. Organisation must maintain records on a regular basis Cover is available under a Motor Composite policy Covers Employees, Volunteers and Directors private vehicles whilst being used to conduct business of the Organisation
What to look for in insurance polices Important to note Check exactly what is covered Check what is not covered. Would the worst case scenario you can think of be covered? What particular conditions of insurance relate to the nature of your business? Are some kinds of activity excluded? How much insurance do you need? How much would it cost to replace the assets of your organisation if you have to make n insurance claim?
What to look for in insurance policies Important to note Make sure you understand the terms of a replacement policy many people don t and this leads them into believing they are better covered than they are. Although replacement policies aim to replace or restore property as new, many have an upper limit on the amount payable Check the excess on each policy. Are they affordable for your organisation? After considering all of the above is the premium competitive?
OUR ROLE
The role of an insurance broker Any one insurance company is unlikely to provide the full range of insurance products a community organisation would need Brokers act for the organisation and can assist with insurance placement, risk management and claims management Insurance brokers are licensed by ASIC and are required by law to work for the client and not the insurance company Insurance brokers have a dispute resolution process and belong to an independent dispute facility
QUESTIONS & ANSWERS
THANK YOU!!! Our office contact details are P: 08 6142 8888 F: 08 9444 9111 E: info@insurewest.com.au W: www.insurewest.com.au Address: Unit 4B, 18 Main St Osborne Park WA 6017 Postal Address: Osborne Park WA 6017??????????????????