Notification Requirements

Some examples of what to notify us of...any changes in your business or circumstances:

· Acquisition of new subsidiaries, mergers or joint ventures in which you are involved in Australia or elsewhere

· Acquisition, construction or occupancy of new premises; alteration, vacation, temporary unoccupancy, extension or demolition of existing premises.

· Increases in value in excess of policy limits for buildings, plant, machinery or stock (whether due to acquisition, economic inflation or exchange rate fluctuation).

· Alterations to or disconnection of fire or burglary protection systems.

· Contractual liabilities assumed and legal rights contractually relinquished or diminished, any contracts which impose onerous conditions.

· Changes in processes, occupancy or products and extensions of business operations, including new products or processes.

· Granting of indemnities or hold-harmless agreements

· Hiring, leasing or borrowing of plant and equipment.

· Acquisition of substantial equipment.

· Movements of stock or equipment to new locations.

· Charter or operation of aircraft or waterborne craft

· External Funding – mortgages or other borrowings which create insurable interest of third parties in insured property.

· Foreign trade and travel – developments involving exposures beyond Australia, overseas acquisitions or exports of products.

If in doubt, tell us and we will advise yourself and ensure necessary requirements......

Insurance Definitions/Terminology

Definitions and Terminologys...some weird and wonderful insurance terms....

AFS LICENSEE
A company who possesses an australian financial services licence.
Required to transact financial services business.

AUSTRALIAN FINANCIAL SERVICES LICENCE
A licence issued pursuant to the Financial Services Reform Act 2001.

AGGREGATE LIMIT:
Usually the total amount of money an insurance company will pay under a Liability policy for all claims which arise during the period of insurance.

AUTHORISED REPRESENTATIVE
A party who provides advice or dealings relating to financial services business and includes both a corporate entity and natural persons.

AVERAGE OR CO-INSURANCE CLAUSE:
A clause in a policy requiring that, where property is insured for less than its full insurable value, the Insured is required to bear a proportion of any loss. The proportion is the amount by which the property is underinsured expressed as a percentage of its full insurable value at the time of the loss.

It is common practice for insurance contracts to be subject to Average or Co-Insurance which means that if the value of the property insured exceeds the sum insured, then you would be required to contribute proportionally to each and every loss.

BUSINESS INTERRUPTION
(Loss of Profits, Consequential Loss):
Covers loss of gross profit or revenue, to maintain the continuing or fixed costs of a business and increased working costs incurred to avoid or diminish a reduction in the business results and profitability following loss of or damage to property.

CLAIMANT:
The party making a claim under an insurance policy. The claimant may be the Insured. Under Liability policies, the claimant is a third party.

CLAIMS INCURRED BUT NOT REPORTED (“IBNR”):
Claims resulting from accidents or occurrences which have taken place but of which the Insurer has not received notice or report of loss.

COMMERCIAL PACKAGE
This insurance package is typically designed for small business enterprises and provides coverage for both Assets and Liabilities within the framework of one policy.

COMPULSORY THIRD PARTY (“CTP”):
Insurance covering accidental bodily injury to or death of third parties as a result of road traffic accidents. All owners of motor vehicles using public roads in Australia are required to have CTP cover taken out in the State in which their vehicles are registered. The parties involved in a road traffic accident are:

· First Party – the Insured or policy holder.
· Second Party – the Insurer
· Third Party – other persons involved, except the driver of the vehicle at fault.

CONTRIBUTION
The amount provided by the Insured or others to a claim under the Contract of Insurance (Policy).

CONTRIBUTORY NEGLIGENCE:
Lack of care on the part of the individual injured or suffering loss which helped to cause the accident or aggravated the injury or damage.

COVER:
The scope of protection provided by an insurance contract.
COVER NOTE:
Temporary contracts to protect the Insured while the procedures for the preparation and issuing of the insurance policy are progressing.

DEDUCTIBLE:
A policy condition whereby the Insured is required to pay a portion of the loss, as stipulated in the policy (eg, the first $400 of a motor vehicle damage claim); the Insurer paying the balance over that amount.

DEPOSIT PREMIUM:
Certain policies are written under conditions which provide that the final premium is not determined until the policy has expired. The premium charged at the inception of cover is the “advance”, “provisional” or “deposit” premium. The term is also sometimes used to refer to the initial premium paid by an applicant for life insurance which is held in suspense by the life company pending its acceptance or rejection of the proposal.

DISCLOSURE
Every matter that the Insured knows or could reasonably be expected to know that is relevant to the Insurer’s decision to accept the risk and if so on what terms.

ENDORSEMENT:
A written or printed recording on the Policy or an annexure to the Policy which alters provisions (terms and conditions) of the Contract of Insurance. Documentary evidence of a change to an existing policy, for example, change of address, increase in sum insured etc. An endorsement may result in an additional premium, a return premium or no premium adjustment.

EXTRA COST OF REINSTATEMENT:
Provides protection for additional costs necessary to comply with government regulations following a loss, eg previous premises may have had a wooden staircase whereas current regulations require concrete, thus the sum insured should allow for reinstatement in concrete.

FINANCIAL SERVICES REFORM (FSR)
The financial services reform programme implemented by the Financial Services Reform Act 2001 together with regulations promulgated pursuant thereto and Policy papers issued by ASIC.

FIRE AND EXTRANEOUS PERILS:
This composite policy can include a selection or all of the following perils: Fire, Lightning, Explosion, Aircraft, Earthquake, Storm & Tempest, Rainwater, Water Damage, Flood, Malicious Damage, Riots & Strikes, Impact by Vehicles or Animals.

FIRE SERVICES LEVIES
Amounts payable by insurance companies to meet the operating costs of Fire Brigade authorities as determined by the various State Governments are passed onto policyholders as premium loadings known as Fire Service Levies.

INDEMNITY:
The principle of indemnity is to place the Insured in the same financial position after a loss as that which applied immediately before the loss. That is, the Insured does not receive “new for old”. The potential recovery that the Insured has under a Contract of Insurance (policy) which is payable by the Insurer in the event of a claim.

NON-DISCLOSURE
A failure of the Insured to provide disclosure to the Insurer.

PRODUCT DISCLOSURE STATEMENT (PDS)
A Policy description statement issued by the Insurer and provided to the Insured by the Intermediary pursuant to the requirements as set out in the FSR.

PROFESSIONAL INDEMNITY / ERRORS AND OMISSIONS:
Covers legal liability to compensate third parties for loss sustained by them arising out of negligent acts, errors or omissions or civil liability on the part of the Insured in the conduct of their business.

PROXIMATE CAUSE
The most directly related uninterrupted cause which causes the injury or damage.

PUBLIC AND PRODUCTS LIABILITY:
Legal liability to pay compensation (including legal expenses) to third parties in the event of the Insured causing injury, death or loss of or damage to property arising out of business operations or products.

RELEASE:
A signed document accepting settlement for a loss.

REINSTATEMENT AND/OR REPLACEMENT:
This is a method of insuring property on a “new for old” basis. In the event of a physical loss or destruction of property insured under these conditions, settlement would be based on the cost of replacing the property or restoring the damage in new materials without any deduction for depreciation.

RENEWAL
The reinstatement of a Contract of Insurance for a further period of insurance.

RETAIL PRODUCT
A financial product falling into one or either of the following categories:
– motor vehicle Policies
– home building and/or home contents Policies
– sickness & accident Policies
– consumer credit Policies
– travel Policies
– personal & domestic product Policies
– any other Policies as may be prescribed by the FSR

STATEMENT OF ADVICE (SOA)
A statement of advice issued pursuant to the requirements as set out in the FSR.

SUBROGATION:
The common law right of an Insurer to recover from a third party who is wholly or partially responsible for a loss paid by the Insurer under the terms of a policy. For example, when an Insurer has paid the Insured for loss sustained to his car as the result of a collision, the Insurer may collect through the process of subrogation from the person whose car caused the damage. Subrogation recoveries are treated as reductions of losses paid when calculating claims experience.

TERMS
The conditions of a Contract of Insurance

UNDERWRITER:
One who determines the degree of acceptability and the pricing of insurance business.

UTMOST GOOD FAITH
Each part must enter into the Contract of Insurance with good faith and communicate every fact and circumstance which may influence the other in entering the contract.

WORKERS’ COMPENSATION:
All employees injured by accident or industrial disease arising out of, or in the course of their employment are legally entitled to compensation under the various Workers’ Compensation statutes. The Acts in each State and Territory require employers in Australia to maintain compulsory “no fault” insurance to cover their legal liability.

GST & Claims Settlements

Some examples of how the treatment of GST is applied to a claim:

Registered ABN Business
The Insured incurs $1,100 (including GST) property damage that is claimable under an insurance policy. The Insured has informed the Insurer of their ABN and a tax status of 100%.

1(a) The Insurer organises the replacement of property (a non-cash settlement).

· Insurer purchases $1,100 replacement property
· Insurer claims $100 GST from ATO.

1(b) The Insured organises the replacement of the property and claims reimbursement from the Insurer (a cash settlement).

· Insured buys $1,100 replacement property
· Insured claims $100 GST from ATO
· Insurer pays to the Insured $1,000.

1(c) The Insured is a registered business with a tax status of only 50%

The Insured organises the replacement of the property and claims reimbursement from the Insurer (a cash settlement).

· Insured buys $1,100 replacement property
· Insured can claim 50% of the GST (being $50) from the ATO
· Insurer pays to the Insured $1,050
· Insurer claims 50% of the GST from the ATO (being $50)

Unregistered Business (Private Individual)

The Insured incurs $1,100 property damage (including $100 GST) that is claimable under an insurance policy.

· Insurer purchases $1,100 replacement property
· Insurer claims $100 GST from ATO

General Claims Procedures

Claims Procedure

Statewide offers a full claims service, in the event you suffer loss or damage to your insured property. Please contact us in the first instance to discuss your claim.

General Procedures - All Sections

As soon as possible after the happening of any
occurrence, accident or event which may give rise
to a claim against you should:

(a) advise details to us and send written
confirmation with claim form

(b) take all reasonable steps to minimise the loss,
damage or liability and to prevent any further
loss, damage or liability

(c) use best endeavours to preserve any damaged
or defective appliances, plant or things which
might prove necessary or useful by way of
evidence in connection with any claim. No
alteration or repair shall be made without our
consent

(d) retain all damaged property for inspection

(e) advise the nearest Police Station in the case of
property lost, stolen or vandalised, and obtain
a written Police report if requested by us

(f) advise Us of any impending prosecution or
inquest

(g) forward to us every communication, writ or
summons at soonest.

Insurance Contracts - Changes to your Circumstances

Alterations to Your Business / Changes to your Circumstances

To ensure continued cover under an insurance policy,
it is important that you advise us immediately of any
changes to your Business or Circumstances, that may result
in an increased chance of destruction, loss or damage to
property insured or liability to third parties.

Some examples of changes you should notify us of are:

• changes in Your name or directors or partners;
• changes to the address or location of your Business;
• changes in the nature of Your Business or trade or occupation;
• alterations in construction of the premises;
• new business products not previously disclosed to us.
  

When we receive notification of a change we may have to adjust the premium or terms of the Policy. This will be advised to you at the time.

Insurance Contracts - Your Duty of Disclosure

Your duty of disclosure
Before you enter into a contract of general insurance
with an insurer, you have a duty, under the Insurance
Contracts Act 1984, to disclose to the insurer every
matter that you know, or could reasonably be
expected to know, is relevant to the insurer’s decision
whether to accept the risk of the insurance and, if so,
on what terms.

You have the same duty to disclose those matters to
the insurer before you renew, extend, vary or reinstate
a contract of general insurance. Your duty however
does not require disclosure of matter:

◆ that diminishes the risk to be undertaken by the
insurer;
◆ that is of common knowledge;
◆ that your insurer knows or, in the ordinary course
of its business, ought to know;
◆ as to which compliance with your duty is waived
by the insurer.

Non-disclosure
If you fail to comply with your duty of disclosure, the
insurer may be entitled to reduce its liability under the
contract in respect of a claim or may cancel the
contract.
If your non-disclosure is fraudulent, the insurer may
also have the option of avoiding the contract from its
beginning.

Please contact Statewide for further clarification if needed.