An insurance policy is a legal contract between the Insured and the Insurer. The Insured provides information in response to the Insurer's questions, which the Insurer takes into account before deciding to offer or to decline to offer a policy, or to limit it in some way.
If the Insured fails to provide truthful, or incomplete information, or fails to tell the Insurer some detail(s) that would be considered relevant to the Insurer, the Insurer could reduce or refuse to pay a claim, cancel the policy, reduce the cover to what it would have accepted if it had known the correct facts, and if fraud is involved, treat the policy as if it had never existed.
It is therefore very important to make sure that the Insurer and your broker is aware of the Insured's details. It is better to mention anything that could be considered relevant, even if the specific question may not have been asked. e.g. if you were requesting insurance cover for a beef cattle property, you would be expected to mention that you also sometimes hired out your horses for the public to ride around the property. It is also the Insured's responsibility to keep the Insurer and your broker informed of any changes to their circumstances, and/or to make additions or deletions to the policy as soon as the Insured is aware of them.
Who, or what entity, is the Insured is an important issue. The Insured name normally is the same as the insured item's owner's name, unless there is a legal requirement that they have to insure another party's property, such as leased equipment or vehicles.
Example 1: If Bob and Mary Smith bought a property or a vehicle in their Company name, B & M Smith Enterprises Pty Ltd, it has to be insured under the Company name.
Example 2: If Bob and Mary lived in Queensland, and owned a home unit, they may well be able to take out a policy on their unit for building and contents damage, but they would not be paid for a claim for water damage to the ceiling, because the building is owned by the Body Corporate or the Strata Title Plan, which must have it's own policy on the property. Bob and Mary would, however, be able to claim for damage to their lounge suite – because they own it. Note: other States or Territories may have different rules to Queensland regarding Strata Title insurance.
Example 3: If Bob and Mary operate their Company business from the study in their home unit, would the theft of their Company owned laptop be able to be claimed on their personal contents policy? If you answered “No” you are correct. The Company should have its own business policy for the equipment, which usually would also include Public Liability cover. If they had Public Liability cover and a business client came to their home, or they called into a client's office, and accidently injure someone, the business policy would then respond to the liability claim. The Legal Liability cover which is included in most Home & Contents policies excludes any business related claims.
Some of the Products we provide
Some case Studies...
Business Insurance Package Scenario
Tim and Debbie have a retail shoe shop. They are tenants in a suburban shopping centre. It would cost them about $100,000 to completely fit out the shop with new glass shelves, stock racks, counters and ancillary equipment such as cash register, fridge, furniture, stationery, etc. The cost of their usual stock holding to them is $150,000. They don't believe that burglars would be capable of stealing more than $10,000 of their stock due to its weight and bulk. They bank their cash and cheques every day, leave a float of $500 in the register overnight, and take the rest of the cash home each night. In their lease the landlord requires them to have $10 million Public Liability and to insure the landlord's plate glass at the premises. They have a neon sign outside their shop for which they paid $2500. They usually get their stock delivered from Australian suppliers, but they often pick up stock from a local warehouse and bring it to the shop in their car.
Their Business Insurance Package has the following recommended cover –
Fire and Defined Events/Accidental Damage
Contents - $100,000 Stock - $150,000
Accidental Damage – $25,000 Removal of Debris - $15,000
Gross Profit - $268,000, allowing for a 10% increase over last year
Indemnity Period -18 months
Additional Extra Costs of Working - $30,000
Claim preparation costs - $50,000
Contents - $5,000 Stock - $10,000
Business premises, business hours - $3,000 In Transit - $3,000
Business premises, after hours - $500 At residence - $3,000
External & Internal Glass – full replacement value Sign - $2500
Public & Products Liability - $10,000,000
$10,000 goods in transit
IMPORTANT - Please note: The Case Studies and examples mentioned are fictional cases which we hope will illustrate some scenarios which may help you to understand the range of insurance advice and insurance products that we can assist you with.
They are presented in a simplified format which does not include the full range of information that we would consider essential prior to any actual recommendations. Please be aware that rarely are two client’s needs identical, and we take care to understand fully your circumstances before any advice is offered.
Warning: You should not assume that any of the scenarios below will be appropriate for you, even if they sound identical to your own situation. Please contact us to discuss your insurance needs.