Fine print is tedious, but read it anyway....

Every one of your policy's loopholes and limitations will be in the fine print somewhere. Knowing them well will pay dividends if you do need to make a claim down the track.

For example, if your bag is stolen while you're swimming at St Kilda Beach, some insurers may deny the claim as "the items were left unattended". If a would be robber wrenches the bag out of your hand, then that's a different story.

Similarly, some policies exclude loss and theft that occurs while you are intoxicated, so try and avoid losing your mobile phone in a nightclub.


Knowing your policy's flaws like the back of your hand should help you to avoid engaging in behaviour or situations that are unlikely to be covered by your insurance.

Consider Insurance Costs When Building

The recent Victorian bushfires highlighted how vulnerable Australia’s rural industries and infrastructure can be. While asset losses in wine growing areas were not as bad as many feared at the height of the blazes, the damage bill was still significant.

In this context, the Longfellows Group, an insurance brokerage and WFA Network Partner, has raised an emerging issue in relation to a building material commonly used in the wine industry – EPS (Expanded Polystyrene) Panelling.

Significant recent fire losses involving buildings with large amounts of EPS have caused premiums (and excesses) to skyrocket. In fact, many insurers have chosen to price themselves out of the market or declined to insure EPS risks.

EPS panelling, like other sandwich panels, comprises a core material bonded to two outer facings, usually steel. EPS is popular in many sectors, including the wine industry, because it is the most cost effective to buy and install.

However, EPS panels are considered hazardous by many insurers because:

· EPS is flammable at a relatively low ignition temperature, and once this point is reached it is highly combustible and the fire spreads quickly

· toxic smoke and gas and rapid reduction in structural integrity make fire fighting dangerous

· as fire crews often must focus their efforts on preventing the fire spreading, once a fire starts in an EPS risk a total loss (rather then just partial damage) is likely.

The message from Longfellows is that when building sandwich panels it is worth considering all options as the savings on cheaper EPS may be outweighed by higher insurance costs.

The most common alternatives to EPS are PIR (Polyisocyanurate) and mineral wool (synthetic fibre). PIR panels cost around twice as much as EPS panels but have a higher ignition temperature and produce an insulating char when burned, rather than melting. Mineral wool cores are non combustible but resist water vapour, making them unsuitable in some situations. A number of phenolic/EPS hybrid cores now entering the market also provide lower combustibility then pure EPS and good insulating properties.

When making choices, Longfellows also warns to be aware of ambiguous terms such as “Fire Rated” and “Insurer Approved”; the rating may be poor and the approval may only come with a horrendous premium rate!

Risk management for EPS

If your existing buildings contain EPS panels, there are a number of ways to reduce fire risk:

• carry out visual inspections – any exposed core (where a fire can enter the panel) must be sufficiently capped and sealed
• keep electrical and heat-producing equipment or appliances at least 10cm from panels distance from panels
• take great care when penetrating cabling though panelling
• maintain facings and joints to prevent exposure of the core
• ensure strict control and supervision of any hot work (welding, grinding, thermal or oxygen cutting or heating)
• isolate bulk storage of empty pallets away from panelling
• conduct annual electrical examination and thermal imaging to detect any “hot spots” on wiring.

Why choose an Insurance Broker to look after your Insurance needs?

Many Business owners find it difficult to choose the right insurance for their particular business on their own. Choosing the right insurance broker is a major factor to developing and implementing an insurance program that is right for your business.

Working with an insurance broker will help find you a policy tailored to meet the needs of your business. Understanding the risk factors of your business that should be covered by insurance is important. Quite often business owners miss or do not fully recognise some of the items that should be covered by insurance and therefore leave themselves exposed to costly claims.

Insurance underwriters classify certain business activities as high risk or difficult to underwrite. This is often the case with businesses providing a service that has high potential for possible damage or injury. Some examples of this type of business are serving alcohol, working with expensive property or operating high risk activities such as sky diving. It is therefore important to seek an insurance broker that understands your business and more often than not there will be brokers who specialise in your industry type and will help you develop a suitable risk management solution for your business activities.

So where would you find a broker that suits your needs? You could start by asking others in your industry who they use or if there is an organisation they can refer you to. Another option is to join the local chamber of commerce as they often have insurance professionals as members who will be happy to offer to either help you find someone or explore the market place for you.

Developing a sound and trusting partnership with your insurance broker will benefit you and your business in the long term. As your broker’s understanding of your business grows and he or she gains a better understanding of how your business operates and will be able to develop better insurance programs and schedules with the underwriters which in turn will result in better premiums for you.

Rising Insurance Costs...a brief explanation

We get asked every day, 'Why has my premium gone up?'
'I haven't had a claim....'
CGU one of Australia's largest insurers provided some insights recently;

From September 2010 - to February 2011 most of Australia experienced above average rainfall except WA, of which recorded their lowest rainfall on record but experienced bush fires. These significant events are becoming the new normal in our everyday lives here in Australia a land of extremes.

CGU registered an additional 25 000 claims in this past summer. This kind of volume impacts simple supply and demand principals such as the cost of labour, materials and qualified trades people and as we have been facing these extremes as a nation - often trades people will travel to where the work is, therefore large events such as Queensland's flood will put pressure on the labour and material supply in other states such as Victoria and South Australia.

While this is not exhaustive answer, it gives some food for thought. Would love to hear your thoughts.

Cheers
From The Longfellow.