The post Perrymans is now part of the Steadfast Group appeared first on Perrymans.

Invariably we find that this arises from one of the following:

• the cover has been arranged by an inexperienced broker;
• the broker uses a basic declaration that doesn’t prompt the client to review their business;
• the client arranges cover directly online.

Inexperienced Broker

Experience matters in any profession. Engineers have specialities much the same way as the medical profession has. Yet for some reason, insureds often think specialisation doesn’t apply to insurance.

Insurance Brokers and Insurers alike have specialities and it is critical to engage a broker that understands the nuances of your particular profession, the contractual issues you may encounter, can explain how the cover works so you know what your obligations are, has been involved in the claims and knows the insurers that are best suited to your risk.

Dealing with inexperienced insurance brokers can lead to your claim being limited or denied.

As a simple illustration, we recently looked at an engineering risk for a prospective insured. The insured had been with a large broking firm for many years, they diligently filled out their documents and sent them back to the broker, who in turn sent them their quotations each year which the client accepted.

The insured was involved in storm water and sewerage design. The cover recommended by their broker contained amongst other things, a pollution exclusion.

The exclusion was extremely broad in that it was “any pollution or contamination” and there were no definitions surrounding what constituted pollution or contamination so it was open to a “reasonable person’s” interpretation. In effect, if any claim arose that involved pollution or contamination, the client had no cover.

Not exactly ideal if you are designing stormwater or sewerage systems.

A broker experienced in engineering risks would know that such an exclusion is unacceptable and would not have presented such terms for consideration.

The prospective client was horrified that after many years of being with this broker they had failed to understand the risks of their business.

Signing a declaration versus completing a full proposal

We often hear complaints from clients and prospective clients about the length of proposal forms and the information required by us.

“Other brokers don’t want us to fill out forms they just ask us to sign a declaration”.

Professional Indemnity is a complex cover. There are significant risks in simply signing a declaration versus completing a full proposal form.

What many insureds fail to understand is that the documentation you submit forms the basis of the insurance contract and insurers will rely on that documentation in determining whether or not a particular circumstance is covered.

Simply signing a declaration doesn’t make you think carefully about your past and proposed business activities and risks, nor does it allow an insurance broker to reasonably assess those risks and develop appropriate cover. Declaration renewals are generally not reviewed by brokers or insurers as to whether cover is appropriate.

Completing a full proposal not only allows you to carefully review and document both your past and proposed business activities and risks but also allows your insurance broker to assess your particular risk profile, changes thereto and ensure that cover is developed for your particular risk.

Working through a comprehensive proposal each year should be part of every business’ risk management and mitigation process. Simply signing a declaration is a lazy way of renewing your insurance that exposes you to significant risk.

Over the years and through our significant experience, Perrymans have developed and continue to develop our bespoke documentation for our specialisations that delve into particular business practices and deal with policy exclusions and industry changes so that we understand your risk and develop the appropriate protection.

Arranging Professional Indemnity Online

As we become time poor and technology progresses, many insureds have looked to buy insurance covers online.

This is fraught with danger as clients are not experts in insurance nor do they fully understand the pitfalls of certain covers.

Whilst we look to embrace technology, it cannot replace the invaluable experience and advice offered by a suitably experienced insurance broker.

Online insurance facilities simply can’t cater for the nuances of many occupations nor do they allow for explanations or the provision of advice.

Invariably insureds purchasing online covers use what they consider to be the “nearest fit” occupation, which doesn’t allow for explanations or expansion of activities, nor does it allow for covers to be modified to suit.

Despite this, many think “they have insurance so they are covered”.

A simple example of this is a risk presented to us some years back. The business involved a travel agent who took their clients on mountaineering expeditions. They did everything from arranging travel to leading the expeditions.

We requested detailed information given the exposure, reviewed with specialist markets and provided the prospective client with terms and recommendations that covered the proposed activities.

The prospective client then advised us that they had obtained quotations online for less than $1000. Our terms naturally were significantly more.

As it transpired, the prospective client had selected the occupation that in their opinion was the “nearest fit” as this was all the online system would allow. It didn’t allow for all activities to be declared, particularly the mountain expeditions.

The prospective client was of the view that they were able to obtain “insurance at a much cheaper price” irrespective of whether it was suitable and going to provide protection.

We evaluated the “online” documents and detailed to the prospective client the major issues of why the cover would not respond to the significant risks of their business.

Without the benefit of our knowledge, experience and advice the prospective client would have been left considerably exposed.

How Can Perrymans Help?

As an experienced and capable Professional Indemnity insurance broker, Perrymans will work with you to:-

• assess your risk,
• develop and script cover that responds to your risks,
• market and negotiate with recommended insurers that deliver when needed most,
• deliver successful claim outcomes

For help in determining the professional risks your business faces, contact Perrymans today.

The post Why Using an Experienced Professional Indemnity Broker is Essential appeared first on Perrymans.

The latest cyber risk causing significant losses to businesses is social engineering.

A social engineering loss is one whereby a party, through the use of deception, manipulates another party into divulging confidential or personal information that may be used for fraudulent purposes.

An example of this is where a company employee is tricked into transferring funds into a fraudster’s account, under direction from what is assumed to be a vendor, client or one of the company’s supervisors. The fraudster will usually send an email claiming to be one of the above-listed people and will then ask the email’s recipient to change banking details where company funds are currently being transferred.

On the surface, these types of fraudulent emails appear to be authentic, with all of the correct company information and logos being displayed. Only careful inspection of the email and the account details listed within the communication will reveal the scam. However, unsuspecting and trusting employees have already unwittingly cost their companies millions of dollars by actioning the instructions of these emails.

Don’t Assume it is Covered by Your Insurance

Contrary to what a lot of business owners think, losses incurred through this particular type of scam aren’t always covered under traditional insurance policies including cyber and crime policies.

There have been a number of cases where Insurers have rejected claims made by businesses that have fallen victim to this particular type of social engineering because the loss did not result from “direct fraud”.

As a general rule, insurance policies providing cover for fraudulent behaviour only apply if a fraudster directly penetrates the company’s systems and illegally accesses the businesses money without consent. However given a social engineering loss occurs with knowledge and consent, albeit via fraudulent methods, insurance policies may contain exclusions in relation to such voluntary parting of funds or property.

Alternatively, they may contain outright social engineering exclusions.

We, therefore, recommend that insureds assume there is no cover unless specifically specified and that you contact Perrymans on 08 8362 7127 to discuss how to protect yourself or your company from this risk.

The post Social Engineering Losses and Insurance appeared first on Perrymans.

The post Builders, Construction Professionals or Property Owners – Could the use of ‘Non-Compliant Building Products’ be an issue under your insurance? appeared first on Perrymans.

No business is immune from of a data breach or cyber attack and the probability of your business being impacted is increasing dramatically. According to PWC’s 2016 Global Economic Crime Survey 65% of Australian businesses responded that they had experienced a cybercrime, having increased from 33% in 2014. The Australian Institute of criminology found that in 2015 the average cost in Australia of a cyber crime was $276,323. Such incidents are increasingly impacting the profitability, competitiveness and reputation of Australian businesses. According to a study by the U.S. National Cyber Security Alliance 60% of small companies are unable to sustain their businesses over 6 months after a cyber attack.

While it is imperative that you consult with your IT provider and implement appropriate security protocols, cyber liability insurance offers an additional layer of protection for your data. Cover extends to a broad range of network, privacy and multimedia related exposures and is an essential component of your business cyber risk management. Some of the key benefits of a Cyber Liability Policy include:

• Business Interruption Loss – Coverage for income loss or loss of profits as a result of interruption to your computer system.
• Data Recovery Expenses – Coverage to recover and/or replace data that is damaged, altered, corrupted, distorted, stolen, misused or destroyed.
• Privacy Regulatory Costs and Penalties – Coverage for defence costs and fines/penalties (where insurable) as a result of a privacy/security breach or breach of privacy regulations.
• Cyber Extortion – Extortion monies and expenses as a result of an extortion threat.
• Liability – Coverage for third party claims arising from transmission of malware, alleged infringement of intellectual property, defamation, invasion of privacy, denial of service and privacy breaches.

In this increasingly hostile environment the two main questions to ask yourself are ‘Could my business continue trading without its IT systems’ and ‘Can I afford to not have cyber insurance to protect my business’?

For more than 40 years Perrymans have been delivering insurance broking services to professionals, business and corporate sectors. Perrymans are specialist insurance brokers for cyber liability and continue to develop a range of innovative, cost effective insurance and risk management solutions that also address market, environmental and regulatory changes.

Contact Perrymans about Cyber Liability insurance today.

The post Cyber Liability: What if you couldn’t access your data tomorrow? appeared first on Perrymans.

The post Insurance Brokers: Your Crucial Claim-Time Companion appeared first on Perrymans.

Many companies have bespoke template contracts, which they use whenever engaging consultants or sub-consultants for a project.

Invariably, these contracts are designed to cover as many foreseeable contingencies as possible and are deliberately worded to transfer as much risk as possible away from the principal and onto the consultant.

There is often a misconception that a consultant’s insurance cover will attend to the risks under contract however this assumption is incorrect and can leave consultants with little or no protection.

Consultants should therefore seek and obtain qualified legal and specialist insurance broker advice prior to entering into any such contract. This is to ensure that as many potential risks, which might arise under these types of contracts, are transferred back to the principal or, at least, reviewed to determine if they are or can be covered by existing insurance policies.

Insurance cover may not be available in all instances in respect of the risks or, if available may come at a very high cost. Furthermore, given the claims made nature of the policy, cover agreed to today, may not be available in the future.

On the other hand, fair and reasonable requests for contract amendments are often agreed to.

Uninsured exposures and potential high(er) costings can be avoided by establishing a business protocol that every “non-standard” contract is scrutinised by a lawyer experienced in construction and insurance matters before it is signed.

Such a risk management process is also considered favourably by insurers and can positively impact costs if the consultant can demonstrate that it has mechanisms in place to limit the potential exposure.

The following examples illustrate the issues caused by increased contractual conditions.

• A large claim was brought against one of our clients by their principal, based on the terms of a contract initially sought. Fortunately before commencing the work, the client sought advice on the contract though our Contract Review Service, resulting in a number of amendments to the contract. When the principal’s legal counsel was advised of the amended contract, the claim was withdrawn.
• By contrast, another client simply executed a contract put before them, assuming firstly that all would be well in the completion of the project; secondly, that its principal would not seek unreasonable contract conditions and thirdly, that in any event, they had insurance coverage to deal with any potential claim. The client was wrong on all counts. It is alleged that the consultant made significant errors and is now facing a multi-million dollar claim. Had the terms of the contract been checked and amended, that potential liability could have well been avoided. The client now faces significant uninsured losses as a result of the increased contractual conditions that they inadvertently agreed to.

Perrymans provide services to consultants engaged in the project management and construction sectors. With more than 30 years of advising clients in these sectors, we can assist in structuring broad competitive covers through our worldwide markets.

Our clients have access to a significantly subsidised and integrated insurance/legal contract review service through our close association with legal counsel who specialises in insurance, construction and manufacturing matters.

The post Common Contract Traps For Project Managers appeared first on Perrymans.