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Childcare Insurance Australia-Wide

Childcare Insurance with Statewide

Statewide first placed Childcare Insurance in March of 1988, and since then we have been known as the Childcare Insurance brokerage in Western Australia.

Today we continue our long-standing relationship with the WA childcare industry, and continue to be at the forefront of insurance solutions in the childcare insurance sector.  We are pleased to announce our recent Australia Wide Childcare Insurance Launch, expanding our offerings to all of Australia, in exclusive arrangement with Ansvar Insurance.

2016 sees the Launch of our Exclusive Agreement with Ansvar Insurance – to expand our Childcare Insurance offerings Australia-wide.  We are now able to write Childcare Insurance in every state, and look forward to assisting the rest of Australia for the next 25years and beyond.

Our packages INCLUDE Public Liability and Professional Indemnity for Molestation –  an often overlooked and hard to obtain cover.  Please contact us for a discussion on any ChildCare Insurance needs.

 

Our packages are tailored to suit the industry, particularly from a Liability insurance component, covering the unique liability aspects of Childcare business.  We insure hundreds of Childcare Centres throughout WA, and continue to be well known and highly regarded throughout the industry.

We Cover any Childcare or Community Care based business:

  • General Child Care
  • long day care
  • outside school hours care
  • before and after school care
  • vacation care
  • pre-school
  • kindergarten
  • playgroup
  • mobile children’s service
  • family day care
  • in-home care
  • nanny
  • home based care
  • babysitter
  • mothercraft nurse
  • mother’s helper
  • housekeeper, nanny

Business Pack Inclusions:

  • Property/Fire/Perils/Accidental Damage
  • Business Interruption
  • Burglary/Theft
  • Money
  • Glass
  • Transit
  • Electronic Equipment
  • Machinery Breakdown
  • General/Mobile Property
  • Tax Audit
  • Employee Dishonesty
  • Workers Compensation
  • Volunteer Personal Accident
  • Public and Products Liability
  • Professional Indemnity
  • Sexual Molestation
  • Officials Liability
  • Employment Practices

Please contact us with any childcare requirements – we cover childcare, daycare, before and after care, aged care, community groups and more.  We insure centres direct, and wholesale to brokers.

Documents

ANSVAR – PROPOSAL

ANSVAR – CARE FACILITIES PDS

ANSVAR – COMMUNITY PDS

ANSVAR – SEXUAL ABUSE EXTENSION

ANSVAR – COMBINED LIABILITY DECLARATION

ANSVAR – EARLY CHILDHOOD, RISK MANAGEMENT

ANSVAR – EARLY CHILDHOOD, LEGISLATION

ANSVAR – Property Risk Management Manual

ANSVAR – Abuse Prevention – Risk Management

ANSVAR – Abuse Prevention – Checklist

Occurrence-v-Claims Made

QBE BUSINESS PACK PROPOSAL

QBE BUSINESS PACK PDS

First Report of Injury Claim Form – Workers Compensation

Employer’s Report Claim Form – Workers Compensation

Workers Compensation, Injury Mngt Handbook

WorkCover WA Brochure

WorkCover WA 2B Claim Form

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Understanding Management Liability Insurance

The National Insurance Brokers Association takes a look at Management Liability Insurance.

It’s not just big businesses that face the prospect of long, drawn-out court battles over everything from unfair dismissal and regulatory discrepancies to occupational health and safety concerns. Small-to-medium enterprises are being drawn increasingly into the quagmire of litigation and business interruption – and the quickly escalating associated costs.

But, for as little as $500, those small-but-going concerns – and even the larger enterprises – can cover themselves against such potential problems, as well as the standard business insurances of fire, crime, and public liability.

“As soon as businesses start employing staff, have a director or shareholders, or handle monies on behalf of third parties, they should look into taking out management liability (ML) insurance,” says David Porteous, General Manager for Brooklyn Underwriting.

Porteous says ML has moved on from the traditional directors and officers liability insurance as Federal and State legislations and regulations became increasingly more complex, and leave not just ’bosses’ at risk of exposure, but employees as well.

“We are seeing the largest number of claims in the management and employment practices areas,” says Porteous. “Employment practices liability insurance can be taken out as part of a package for ML, and can cover things such as unfair dismissal, lack of advancement or even sexual or workplace discrimination.

“Anyone who operates a business is exposed to hundreds of pieces of legislation, and businesses are becoming more aware of the sheer breadth of exposures they face in the day-to-day operations of running their business. These days a ML policy can even extend to cover such things as crisis management, theft and fidelity and pollution defence.”

All business great and small

Grant Cairns, Financial Lines Manager Australia and New Zealand for ACE, says prior to ML being available, small business owners would often choose to go uninsured instead of purchasing separate policies for directors and officers liability, employment practices liability and employee crime risks.

“Management liability has incorporated many of the areas covered by these standalone policies and other extensions into one convenient policy,” he says. “Management liability insurance is now designed to meet specifically the needs of the SME market across the vast majority of industry classes.”

Cairns says when it comes to ML, underinsurance is an issue across Australia. Surveys have shown that a low percentage of businesses adequately protect their owners, directors and management from the legal consequences of liability risks that may arise from their daily actions.

In the global business environment managing business risks is critical to the overall performance of a business.

John Ward, National Portfolio Manager Casualty and Specialty at Lumley Insurance, says: “Most companies insure the tangible exposures of property damage and bodily injury but neglect to insure against economic loss. Any business can experience unwelcome surprises that could potentially threaten their financial position leaving their managers and owners exposed to personal liability, and putting the business under threat.”

According to Ward, the demand for ML insurance continues to grow, due to increased demands from regulatory bodies, recent changes made to work health and safety harmonisation legislation, coupled with high-profile cases reported by the media.

“We are also seeing more regulatory investigations in the media,” he says. “Recently we’ve seen high-profile employment practices claims, such as the David Jones sexual harassment case, employee theft in the form of the $20m employee fraud at Clive Peeters, and occupational health and safety actions.”

The fourth pillar

Ryan Thomas, Senior Technical Specialist at Suncorp, says that while most business owners understand the need for insurance cover for fire, public liability and business interruption, they are ignoring the  ‘fourth pillar’ of ML insurance: owners and directors insurance.

According to a recent industry survey conducted by Cameron Research, only 17% of business owners have chosen to protect their owners and directors with the appropriate level of cover.

“Many business owners are being held increasingly responsible for events that occur within the workplace,” Thomas says. “They are ‘chancing their hand’ by ignoring ML cover.”

An increasingly litigious business climate is placing a greater focus on this insurance category, with the variety of law suits being pursued against business owners by employees, shareholders, creditors or others on the rise.

Thomas says claims can involve unfair dismissal, sexual harassment, workplace bullying, occupational health and safety breaches, or general allegations of improper conduct.

“With SMEs facing an ever-rising rate of claims, including ML in an insurance package is no longer something that can be put off until tomorrow,” he says. “Most people are familiar with wrongful dismissal, discrimination and harassment, but have you considered the cost to your business of a simple regulatory investigation?

“Even the most frivolous of cases can cost a great deal of money and time to defend.  SMEs are especially vulnerable to the cost in defending themselves and could go under as a result, even in the event of a positive finding. Anyone in business is a potential target – whether your business is a ballet school, a bottle shop or a butcher – no-one is immune.”

Simply the best

Jarrod Wilson, National Commercial Manager of CGU Insurance, says nearly all professional lines insurers provide some form of management liability.

“This is particularly important for SMEs as they can experience rapid business growth and contraction, employee numbers fluctuating, management structures changing and finances becoming more complex,” he says.

Stephen Bonnington, Head of Financial Lines for Zurich, says, in its simplest form, management liability is a combined ‘financial lines’ product designed for small to medium, private (non-listed) companies and includes six main areas of coverage or ‘insuring clauses’ that are typically sold as standalone products for medium to large corporations – insured persons liability, company liability, employment practices liability, statutory liability, commercial crime and internet liability (see box out).

“ML was developed as an alternative to purchasing these six separate policies, which were often too expensive for small businesses with high overheads and tight margins,” Bonnington says.

“And realistically, a company may only expect a claim to trigger any one of these policies infrequently, so having one policy which covers all of these areas means a more cost effective solution.”

One size can’t fit all

Bonnington says companies in the manufacturing, mining, construction and transportation sectors are generally seen as higher risk and may have a greater exposure to occupational health and safety risks.

“These companies typically have claims that trigger the insured persons liability, employment practice liability or statutory liability sections of the policy. In recent years, there has been an increase in claims alleging failure to provide a safe working environment. That has resulted in fines levied against directors and officers, as well as the company itself.”

In another area, claims for corporate manslaughter are more commonplace in industries with employees exposed to hazardous materials or activities, and these sectors usually attract higher premiums and excesses as a result.

“Companies that accept and process high levels of credit card transactions – like a retail business – may well have a higher exposure to the Commercial Crime section of the policy,” continues Bonnington. “The retail sector is also subject to claims for unfair dismissal and discrimination and these fall within the Employment Practices Liability section.”

Keeping pace with change

Cairns says a recent development in the area of ML risks has been the push to harmonise the various state-based occupational (workplace) health and safety laws to implement uniform legislation in each state and territory. In January 2012 the Model law was introduced in the Commonwealth, ACT, NSW, Queensland and NT governments, and from 1 January 2013 Tasmania and SA have also adopted this law.

“Among other matters, the laws place an onus on the directors and officers of a company to exercise due diligence to ensure the company complies with its health and safety responsibilities. Failure to do so can result in substantial penalties. Investigations by regulators are costly to defend and this is likely to have an impact on the claims environment in the ML market,” he says.

Wilson says exposures in the ML space have changed materially in recent years, in things such as the Fair Work Australia Act (2009) which placed new rules around employment issues such as unfair dismissal and sexual harassment.

“There is also increased ASIC, ACCC and ATO (audit) investigations,” he says. “Cover for legal costs in the event that there is no formal claim can fall under investigation/representation costs.

“And recent amendments to the Privacy Act also have had an impact. The key areas that are impacted are privacy policies and privacy collection statements, direct marketing and privacy compliance through procedures and systems. Poor management of increased volumes of personal data could lead to a claim.”

ML and D&O: what’s the difference?

Management liability and directors and officers insurance (D&O) are often seen as similar products.

However, D&O is a product designed to protect the personal assets of company directors and officers in the event they were sued while acting in their capacity as a director or officer. Management liability protects the company as well as its directors and officers against legal liabilities and statutory obligations.

Grant Cairns, Financial Lines Manager Australia and New Zealand for ACE, says across the market there are variations in management liability insurance offerings, and the critical thing is for policyholders to understand their coverage and the claims handling abilities being offered by their insurer.

David Porteous, National Underwriting Manager for Brooklyn Underwriting, says it became apparent about 10 years ago that, with the ever-changing landscape of State and Federal legislations and regulations, there were a number of exposures that were being left with traditional D&O insurance policies.

“Management liability on the other hand creates a blanket cover, not just for directors and officers but can also cover employees among other things,” he says.

Wrongful dismissal

This case deals with a small family-owned company performing finishing work for garments for fashion manufacturers.

The Managing Director of the insured company was advised by the Supervisor that one of the employees had stolen some garments.

The Managing Director accused that employee of theft and told her to leave.

On her way home, the employee consulted an employment lawyer who initiated proceedings against the company for unfair dismissal in the Australian Industrial Relations Commission.

The wrongful dismissal claim was defended and lost by the company.

No theft was found against the employee. The employee was reinstated to her employment with the company with full back pay of $9,000 plus costs of $15,000. The company’s legal costs (including barrister’s fees) came to $64,000.

Regulatory investigation

The insured company provided management consultancy to a large product/distribution company. The production/distribution company attracted media attention for involvement in fraudulent activities and was investigated by ASIC.

To assist in its investigations, ASIC issued notices to each of the directors of the insured company to produce certain documents and attend compulsory examinations.

The directors engaged solicitors to review their documents, advise them, and be present at the ASIC examinations. The directors were required to attend over a period of five days, and they incurred legal costs of $60,000.

The six components of management liability

Insured persons liability

Covers loss arising from claims brought against the directors, officers or employees acting in a managerial or supervisory capacity within the company.

Company liability

Loss arising from claims made against the company.

Employment practices liability

Loss arising from claims brought by past, present or prospective employees alleging discrimination, sexual harassment or failure to promote, for example.

Statutory liability

Claims for loss arising from any breach of a Commonwealth Act made by the company, or its directors or officers.

Commercial crime

Claims for loss arising from any fraudulent or dishonest act committed by an employee or a third party.

Internet liability

Loss arising from an actual or alleged electronic publishing claim. This includes claims made with respect to libel, slander, plagiarism, violation to right of privacy, or infringement of copyright.

Need More?

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The Top 6 In Australian Insurance

Insurance News takes a look at the Top 6 in Australian Insurance

 

Robert Kelly, Managing Director and Chief Executive, Steadfast

The founding father of Steadfast is realising his vision for the company at a bewilderingly swift rate. Since listing in 2013, Steadfast has become a company capable of dealing in practically any branch of insurance, including personal lines and life. It has around 304 brokerages and about 750 offices around, Australia, with its consolidated revenue growing 80+% in the 12 months to June 30 to reach close to $6billion in Insurance Premium.

Kelly is building a juggernaut that has an increasing capacity to provide straight-through services for clients via its force of directly owned and affiliated brokerages, underwriting agencies and specialist services. Maintaining a pace that would exhaust much younger men, the industry’s ultimate wheeler­ dealer shows no sign of slowing down as he adds new bits and pieces to the Steadfast operation just about every month.

Kelly has been one of the go-to people in the Australian insurance industry for many years, and that hasn’t changed. Despite the constraints imposed on him by virtue of his company’s listed status, he remains the insurance industry’s most candid advocate. Like a modern trade union leader, he’s as much at home talking shop with ordinary insurance people as he is hammering out agreements in the industry’s boardrooms.

 

Peter Harmer, Managing Director and Chief Executive, IAG:

He’s not likely to go slow in taking a new broom to the region’s largest insurer, because Harmer carries into the top role at IAG an attitude that’s savvy, sharp and challenging. Inheriting a solid and successful company from his predecessor Mike Wilkins, Harmer is well placed to exploit IAG’s large customer base.

His enthusiasm for Big Data and customer-centric development will see the market scrambling to keep up with what will almost certainly be new distribution strategies. There’s also room for greater efficiencies within IAG – from a rearrangement of IAG’s “silo” approach to much of its management, for example. Harmer is the right person to cut through internal resistance using precision and persuasion.

His experience at the top of Aon’s UK operations and his transformation of CGU from a ponderous traditionalist into a commercial insurance market leader – all the time while juggling with the integration of Wesfarmers Insurance’s business into the mix – is a fair example of the sort of dynamism he can bring to the whole IAG group. Expect the unexpected.

 

Mark Milliner, Chief Operating Officer­ designate, IAG:

This was a tough one to call, but every insider Insurance News consulted had the same thing to say: The decision in November by Milliner, the chief executive personal lines at Suncorp, to quit the group and join Peter Harmer at IAG is a game­ changing event in a market where Suncorp and IAG are tough competitors.

Milliner built his reputation as the mastermind behind the Brisbane-based insurer’s back-office overhauls, its auto repair revolution and his willingness to go head-to-head with powerful politicians over mitigation issues. Passed over this year to replace Patrick Snowball as group chief executive at Suncorp, Milliner is tipped to be a masterful deputy for Harmer, bringing 22 years of change management experience with him when he starts at IAG in mid-2016.

His industry nous and his straight-shooter attitude have earned Milliner high status in our Top 20 over the past few years, and we reckon nothing much will have changed, except his place of work. Suncorp’s loss is a very significant gain for IAG. Game on.

 

Ajit Jahn, President, Berkshire Hathaway Insurance:

Another out-of-the-box choice, perhaps, but Ajit Jahn has the ability to change the Australian insurance industry, if he’s inclined to.

Jahn shook up the local market twice this year – once with the arrival in Australia of Berkshire Hathaway Specialty Insurance, an insurer with the financial and technical wherewithal to disrupt the market in pretty much any way it sees fit – and then with the acquisition of 3.7% of IAG for $500 million. That deal carries some unprecedented side-deals.

The media-shy Jahn is often tipped as a successor to Warren Buffett. He wields considerable influence in the industry through his management of Berkshire’s massive reinsurance operations.

This year he has had to drastically tweak or cancel some deals in his empire to counter falling revenues, and there has been some change in strategies as well. That’s what makes the IAG deal so globally interesting. It was a one-off, and is seen as the spearhead of Jahn’s typically innovative – but untypically late – charge into Asian insurance, where IAG is very nicely placed.

 

Mark Searles, Chief Executive, AUB Group

Even though the reputation of AUB – until last month Austbrokers – for consistently increasing returns to shareholders may have lost a little lustre recently, Mark Searles shrugs it off as he adds greater ability and flexibility into his partner brokers’ armouries.

Searles is focused on diversification, building new support services that will increase the range of services brokers can provide their clients. That has seen Austbrokers taking up stakes in companies specialising in workers’ compensation, injury management and ancillary risk management activities over the past year.

His diversification drive is assisted by the growth of the New Zealand broking arm and the continuing success of Austagencies, whose underwriting agencies continue to pump out increasing amounts of revenue. Austbrokers now derives 23% of its profit from non-broking sources.

Searles is confident he and his team will be in the right place if/when premium rates recover through 2016.

His bold strategy is being closely watched by partners – some of whom are wary – and the wider market. With broking under assault from emerging alternative distribution systems, he might just have hit on a solution others can emulate.

 

Heinrich Eder, Managing Director, Munich Re Australasia

When reinsurance takes a bath, it often does it in spectacular style. But in a year of disappointing reinsurance returns, Eder can count on the increasing influence of his general insurance operation, Great Lakes Australia, to counteract some of the other side’s negative results. Great Lakes has been around for long enough for insurer clients of Munich Re to get used to a subsidiary that competes with them.

It’s underwriting an increasing amount of new business, most recently Sports Underwriting, Solution Underwriting and Calliden spin-off Calibre. Eder has been around the local market for 12 years – 10 of them as MD responsible for all Munich Holdings’ life and general operations in Australia, New Zealand and the Pacific Islands. He’s totally immersed in the market’s issues and associations, is well-liked and, as you’d expect, totally trusted.

 

Other Articles of Interest

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Statewide Cyber Insurance Report Q1 2016

Wondering what all this Cyber fuss is about?

Keep up to date with our quarterly Cyber Insurance News Guide.  Produced every quarter by Statewide Insurance Brokers, its your definitive insurance guide to what is happening in the Cyber Insurance Market – the hottest of current insurance topics.

Need a Cyber Quote?  We think you may after reading the news.  Contact Us and we would be happy to discuss.

 

Cybercrime reporting network reveals startling numbers
20 Jan 2016

The Australian Cybercrime Online Reporting Network (ACORN) revealed that it received more than 39,000 reports of cybercrime throughout 2015.

ACORN continues to boost law enforcement efforts as it provides an easy way for those affected by cybercrime to report their issues but cyber threats are expected to increase over the coming year.

It was also found that Victoria received the highest number of cybercrime reports with Queensland and New South Wales making up the top three.

Michael Keenan MP, the minister for justice and minister assisting the Prime Minister on counter-terrorism, revealed the startling number this week as the both individuals and businesses come to grips with cyber risk.

“As Australia’s reliance on technology grows, and online shopping remains an increasingly attractive option for busy Australians, the cost and incidence of cybercrime is expected to increase” Keenan said.

“I encourage all members of the public to be vigilant online and to work together to ensure a safer and more secure digital environment for all Australians by reporting to the ACORN.”

Keegan noted that the leading types of cybercrime reported to ACORN are online fraud and scams which account for over 19,000 reports or 49% of the total number.

“Online trading issues which affect Australians who buy and sell goods online were the second highest type of cybercrime reported; the ACORN received 8,368 reports which accounts for 22 per cent of total reports in 2015,” Keegan continued.

Different tactics employed by cybercriminals were also noted by ACORN as Keegan listed the most used areas used online.

“Over the past year, email, social networking, and website advertising have been the top three reported online channels used by cybercriminals to target their victims.”

 

Lloyd’s appeals to brokers for help on cyber
22 Jan 2016

Lloyd’s has collaborated with modelling firms AIR Worldwide and RMS with the Cambridge Centre of Risk Studies to announce a set of common core data requirements for cyber risks, the insurance institution has announced.

Both AIR and the RMS/Cambridge team have agreed to highlight common elements when they publish their data schemas later this month, with each agreeing to use similar terminology and precise definitions, Lloyd’s said.

Now it is turning to key brokers to do their bit.

Lloyd’s director of performance management, Tom Bolt, said: “Cyber insurance is an important new area of coverage and it is essential that we have good quality standardised data to track exposures.

“I am delighted that the RMS/Cambridge team and AIR, in consultation with the Lloyd’s Market Association, have worked with us to propose standard definitions for some common data.

“I have written to major brokers to ask them to endeavour to provide this data to Lloyd’s underwriters.”

Lloyd’s general representative in Australia, Chris Mackinnon, told Insurance Business that the new framework should help the Australian industry to better evaluate cyber risk.

“The framework introduces common core schema for cyber exposure data and common core features for input data used in cyber risk tools in the market,” Mackinnon said.

“This will enable Australian brokers and insurers to better evaluate cyber risks, with increased access to good quality standardised data to track exposures.”

Mackinnon noted that the new framework is aimed to help standardise an ever-changing and evolving risk as the business looks to keep up with an emerging risk with huge potential opportunities and challenges.

“This new framework will provide better clarity for the calculation of risks and this is a significant step forward,” Mackinnon said.

“At Lloyd’s we have been modelling catastrophes for hundreds of years, and our data enables us to create very effective modelling forecasts.

“But cyber security risks are a relatively new class of business and the entire insurance industry needs to ensure that it improves data aggregation to build more reliable models that enable underwriters to properly price risk.

“Lloyd’s underwriters are some of the most experienced in the world, and we are pleased that we have been able to use our experience to help build a consensus on the standardisation of data that will benefit the whole sector.”

 


PM announces strengthened cyber ties with US
27 Jan 2016

Australia and the United States will work closer together in a bid to combat cybercrime, it has been announced by the Prime Minister.

Malcolm Turnbull announced the partnership last week as the countries will look to work together to curb online crime.

In a statement, the Government announced a series of measures the partnership will bring including an annual Australia-US Cyber Security Dialogue which will “engage senior representatives from both countries’ business, academic and government sectors to discuss common cyber threats, promote cyber security innovation and shape new business opportunities.”

The partnership will also look to promote “peacetime ‘norms’ for cyber space,” which will lead to “practical confidence building measures that help to reduce the incidence of malicious cyber activity and the risk of conflict.”

The deal will bring law enforcement efforts between the two nations closer together as both will be able to use experts in the field.

“To meet the growing threat of cybercrime, we will also enhance cybercrime cooperation between our nations, including through increased exchanges between respective law enforcement and cybercrime experts and more collaboration on cybercrime investigations,” the Government statement continued.

It is not just Australia and America that will benefit from the partnership as the Government said the ramifications of the deal will be felt throughout the region.

“Finally, we agreed to enhance the coordination of our cyber capacity building efforts in the Indo-Pacific, to help our partners in this region increase their cyber security and their capacity to combat cybercrime.”

 


Asian cyber cover ‘set to soar’
1 February 2016

Almost one-third of Asian insurers expect cyber insurance to grow 50% in the next three years, a Munich Re survey shows.

Some 83% have already noted increased demand, but just 10% offer coverage for cyber risks, according to the poll taken at the Singapore International Reinsurance Conference in November.

New technologies such as automated vehicles and the Internet of Things, plus the introduction of stricter laws and regulations, are driving a spike in cyber exposure, the reinsurer says.

About 40% of survey respondents are developing new cyber covers, but 43% have yet to market policies.

“Compared with Asia and Europe, the US markets are already relatively far advanced,” Munich Re board member with responsibility for Asia Ludger Arnoldussen said.

“According to our own estimates, the market volume for cyber covers in Asia is likely to reach $US0.5-$US1.5 billion ($0.71-$2.14 billion) by 2020.

“Our aim is to assist our clients in tapping into this attractive market.”

 


Cyber: What are the emerging issues?
04 Feb 2016

Cyber attacks on Australian organisations rose by 20 per cent in 2014, according to the Australian Signals Directorate, a timely reminder cyber threats are growing. Moreover, the Australian Crime Commission reported in June this year Australians lose about $110,000 every hour to cyber criminals, or more than $2.6m every day.

This demonstrates how serious cyber security is for every business. As such, it is critical organisations are aware of the growing risk of cyber intrusions and are actively putting in place steps to reduce this risk.

At Marsh, we have observed many rising threats, including criminals targeting data by stealing or disclosing personally identifiable or financial data, modifying or corrupting data or blocking legitimate users’ access to data. However, external threats from hackers are just some of the risks about which organisations need to be aware. Many perils are actually internal.

For instance, a culture of trust within an organisation’s work force, traditionally thought to be a benefit, now creates a threat. Many high quality phishing emails appearing to be legitimate correspondence from banks, the ATO and other trusted sources may inadvertently be opened by employees, exposing the business to hackers.

Therefore, employees must be trained to spot and delete such communication to thwart the intended intrusion.

Some of the other internal risks are known as ‘man in the middle’ intrusions. These are where attackers electronically eavesdrop on email conversations undetected and alter communication between parties who believe they are writing to each other in confidence.

Aside from emerging cyber security threats, the legislative environment is also changing the nature of cyber risks. It was anticipated mandatory data breach notification laws would be in place by the end of 2015. While this did not happen, the recommendation for data breach notifications by the Joint Parliamentary Committee on Intelligence and Security remains. As such it is expected that data breach notification legislation will be introduced to Parliament in 2016.

Additionally, the advent of the Internet of Things (IOT) is introducing new cyber perils. For instance, it has been reported the majority of cars stolen in France are targeted using electronic hacking. Indeed, anything connected to the internet could be targeted by hackers. Worryingly, it’s likely many businesses are overlooking vulnerabilities in devices such as printers, video conferencing equipment and thermostats.

While many organisations now understand potential cyber threats expose them to financial regulatory and reputation repercussions, many don’t appreciate some of the other, more serious consequences of a cyber intrusion. For instance, ratings agency Standard & Poor’s has noted a major cyber attack on a financial institution could put its credit rating at risk.

Plus, a perceived misalignment between an organisation’s published privacy policy and implementation of that policy could lead to allegations the organisation engaged in deceptive practices. It has also become almost obligatory that, following a cyber intrusion, the CEO resigns or is terminated. This was the case with the Target event in the US in December 2013 and the more recent Ashley Madison event.

It’s important for organisations to explore ways to protect their electronic ramparts in light of the growing risks around cyber. As part of this it’s important not to overlook third party vendors or customers when it comes to cyber security. As an example, it was determined that the massive Target breach in December 2013 originated through a vulnerability in an air conditioning contractor’s system.

It’s also essential to seek assurances from third party vendors or customers on their level of cyber security resilience and ask for a Cyber Insurance Certificate of Currency from them. You may also be asked to provide documentary evidence your organisation purchases cyber insurance.

While we are still developing a detailed understanding of the full spectrum of threats to Australian networks, a number of trends will manifest globally in the near future, as outlined in the Australian Cyber Security Centre Threat Report 2015. Importantly, the number of cyber criminals, and their sophistication, will increase, making detection and response more difficult. We also expect incidences of spear phishing will continue to grow and the use of ransomware will continue to be prominent.

It’s also expected there will be an increase in the number of cyber adversaries with a destructive capability and, possibly, the number of incidents with a destructive element. There will also be an increase in electronic graffiti, such as web defacements and social media hijacking.

What this shows is that cyber intrusions are a growing and increasingly complex peril businesses must face. It’s essential for every organisation to recognise this and put robust mitigation strategies in place to reduce the risk of a cyber threat undermining or even destroying their businesses.

 


Risk modellers set out cyber strategies
8 February 2016

Insurers can follow five cyber-loss processes to build up coverage in what is expected to be one of the industry’s fastest-growing markets, according to a new report.

The processes cover cyber-data exfiltration, denial-of-service attacks, cloud service provider failure, financial transaction cyber compromise and cyber extortion.

The research was conducted by catastrophe risk management group RMS and Cambridge University, and is supported by leading industry specialists including Aon Benfield, Axis Capital, Renaissance Re, Talbot Underwriting and XL Catlin.

RMS CEO Hemant Shah says the report aims to help the industry “understand the correlation space for this new class of exposure”, because cyber threats know no bounds, unlike the coverage for natural hazards and industrial risks.

“We know to be wary of writing two industrial risks along the same river basin, and the role flood defences play in mitigating loss,” Mr Shah said. “With cyber risks, the contours of systemic accumulation are not as clear.”

The five cyber-loss scenarios have the potential to cause wide and correlated losses, and the report lays out ways to structure the data an insurer should be accumulating.

“These scenario models provide a capability for insurers to carry out routine monitoring of their aggregation risk, assessing what their likely claims payout would be to these benchmark extreme events as their portfolio grows,” the report says.

“They provide useful pointers to use in setting a company’s risk appetite.

“We believe using these scenarios will help companies improve their knowledge of the cyber peril and help them gain confidence in establishing their risk appetites for insuring cyber.”

The report says the regulatory landscape is undergoing dramatic change, as governments and judiciaries look to stiffen penalties for cyber crimes. Australia is among the countries developing their own information security laws and regulations.

 


Cyber dominates top ten legal risks for business in 2016
09 Feb 2016

As the lines between work and personal use of increasingly prolific technology become more and more blurred, the exposure to risk, for businesses of all types, grows in parallel. According to the recent findings of a wide ranging report released by Borden Ladner Gervais LLP (BLG), a Canadian law firm, half of the top ten legal risks affecting business in 2016 are cyber related.

Speaking to Insurance Business, Andrew Harrison, managing partner at BLG, said that: “More and more, the lines between work and personal technologies become so blurred that many employees no longer make a conscious distinction between work and personal.”

Of the various risks identified, Harrison notes that the average cost of a data breach is US$3.7m and larger organisations will be at the higher end of the scale.
There is increasing fraud in e-payment systems; IT security failures due to people (mis)using workplace computer systems; and compliance risk.
“Cyber has ramifications beyond the scope of the initial business in case of malware or a cyber breach, and one of the interesting things about the insurance business is that it is so wide ranging in its scope,” Harrison said.

On the data security front, businesses, particularly small to mid-size entities, often lack breach response policies, proper governance tools, and employee privacy training programs to prevent or promptly respond to breaches. They lack cyber security preparedness, which makes them vulnerable to privacy class actions following a security breach involving personal information.

In this era of Big Data, new business models and marketing techniques are emerging, including facial recognition and personalization reaching new levels of sophistication, as well as dynamic pricing practices, to name but a few. Businesses need to consider whether personal information is properly “de-identified”, what type of information should be considered as “sensitive” in various contexts, how to obtain valid consent in compliance with the “reasonable expectations” of customers, and how to deal with technological innovation, shifting social norms, and building customer trust through proper privacy practices.

The advent of mobile and digital wallets coupled with contactless payment methods and the ever-increasing growth in on-line payments have made e-payments become ubiquitous and have increased the need to develop effective authentication protocols, technology, policies and procedures to mitigate and reduce the risk of fraud.

2015 saw a number of high-profile cyber-sex related security breaches. Most prominent being the Ashley Madison scandal, in which the personal details of over 37 million people were exposed. Worryingly for employers, many subscribers to the website had signed up using their professional email accounts.

“It’s worth pausing at the beginning of the year to work out what people need to be sensitive too,” said Harrison.
“We’re not trying to be dramatic but ignoring these risks is not helpful either. Whenever there’s a risk there’s an opportunity for insurers, because often that’s a way of sharing risk.”

 


Global ratings agency discusses difficulties with cyber
10 Feb 2016

A.M Best has discussed the challenges insurers face when writing cyber liability and what they can do to ensure their own safety.

Speaking to A.M Best TV, senior financial analyst Fred Eslami, said that the next few years will be crucial for cyber risk as interconnectivity continues across the globe.

“In the next few years, there are going to be nearly 50 billion devices connected to the Internet; therefore, expectation is that frequency and severity are going to increase,” Eslami said.

“With this realisation, companies spent US$70 billion in 2014 and US$75 billion in 2015 to protect and address cyber risk.

“We have been focusing on increasing the awareness of cyber security and cyber risk within the community of our rated entities as well as to understand and determine what impact such a risk will have on the financial strength of our companies.”

Eslami said that companies that write cyber liability face three major challenges thanks to a lack of data on the topic as the emerging risk continues to be top of mind.

“There is no, for example, actuarial analysis or result orientated data to do proper pricing, reserving and aggregation so that is one of the challenges,” Eslami continued.

“The next one is the evolving nature of the regulatory and legal environment which the industry is dealing with right now.

“The last one is, of course the rapid transition of legacy systems that we have to more advanced and open-source information technology.”

Eslami noted that once more data for cyber risk becomes available, businesses will be able to operate in the space more successfully and backed a stand-alone product as the way forward.

“I think once the actuarial information is gathered and articulated properly, the legal framework is defined better, there are three ways that we cans see how companies can improve their position vis-e-vis cyber.

“One is to devise and design specific cyber policies instead of including it as part of their CGL or D&O or property coverage. That helps, if nothing else, to reduce the legal costs of defending these cases.

“The next one would be for the companies themselves to come up with a single risk limit.

“These policies that they issue are kind of interconnected and typically you want to have a limit relative to your subclass on the policies that you issue so that is another element that would help eliminate unnecessary expenses.

“The last one would be, again, lack of actuarial studies, to come up with a contingency reserve on the polices or aggregate policies that they issue, again there is no IBNR (incurred but not reported) for cyber so with the contingency reserve that would be covered.”

 


IT, data security top business concerns in 2016
25 Feb 2016

Top financial executives across all Australian companies ranked IT and data security as their primary business concerns in 2016, according to a new survey conducted by leading global recruitment firm Robert Half.

The latest study found that 28 percent of 160 CFOs and financial directors were most worried about IT & data security. The economy was the second major business concern at 26 percent followed by skills shortage at 18 percent and regulatory and compliance changes at 15 percent.

Only finance leaders of small businesses did not rank IT and data security as their chief concern, with 34 percent citing the economy as their main issue for 2016.

David Jones, Robert Half’s senior managing director for Asia Pacific, noted that a breach of data security can lead to extreme financial and reputational consequences.

“It is therefore critical for all companies – regardless of size – to take a protective approach to IT security,” he said.

To protect corporate and customer information, Jones said Australian companies continue to use various tools and services such as security software, password management systems and hard drive encryption service.

However, Jones lamented that small and medium businesses normally use fewer data protection tools than large companies even if they all face the same online risks.

For one, the research found that only 24 percent of small companies and 18 percent of medium firms have network security systems, compared to 52 percent of large companies.

“In recent years larger companies have increasingly invested in cyber security measures, and this has encouraged cyber attackers to cast their gaze at more vulnerable entities,” Jones said.

“This further highlights the need for small and medium businesses, which have become an increasingly attractive target for hackers, to invest in the necessary IT security tools and specialised IT talent,” he added.

 

Many businesses ill-prepared for crises, study shows
29 February 2016

More than 50% of companies believe they are inadequately prepared for crises, according to a new Deloitte survey.

And about 70% of respondents say it takes up to three years to repair reputations following a crisis.

The Crisis in Confidence study questioned 317 non-executive board members worldwide.

The two most serious threats to business are loss of reputation and cyber crime, according to the respondents.

Deloitte Managing Partner Risk Advisory Harvey Christophers says 49% have capabilities or processes in place to achieve the best outcome following a crisis.

In the Asia-Pacific region only 34% are confident of their resilience.

In Australia almost 60% of big businesses surveyed say it takes one to three years to recover reputations and operations. Half say it takes the same time for financial recovery.

Only 32% of respondents engage in crisis simulations or training.

The report says the potential to lose customers and shareholder value due to reputational damage after a data breach, denial of service, or corrupted or stolen assets is significant.

Only 37% of Asia-Pacific businesses have a crisis resolution plan for natural disasters, while 40% have a plan for workplace violence.

“Given that stress levels have a significant impact on our decision-making abilities in times of crisis, it is absolutely critical that a pre-formulated, thoroughly tested response plan is in place to ensure the business takes quick action,” the report says.

 

Financial industry target in 10 data breach scenarios
07 Mar 2016

 

Businesses belonging to the financial industry are the targeted victims in 10 of the 18 data breach scenarios identified by a new report by Verizon Enterprise Solutions.

Verizon has released its first ever Data Breach Digest after investigating more than 500 cyber security incidents occurring in over 40 countries in 2015.

The report details 18 real-world data breach scenarios, 12 of which represent more than 60% of the 1,175 cases investigated by the company over the past three years

For each scenario, the report provides detailed analysis of how the attack occurred, the level of sophistication, the threat actors involved, the tactics and techniques used and the recommended countermeasures.

The report found that financial services are the targeted victims in 10 of the 18 data breach scenarios:
Financial pretexting – the use of false pretences to dupe a victim into performing a financial transaction or providing privileged data
Digital extortion
Insider threat – involves threat actors with some level of trust and privilege causing a data breach through malicious intent
Partner misuse – vendors and business partners may also control legitimate logical or physical access for unsanctioned access to data
Peripheral tampering – involves any tampering or physically manipulating a hardware device that connects to a computer system
Logic switch – the manipulation of account balances and withdrawal limits to create non-existent funds, bypass security measures and cash out quickly
SQL injection – methods of abusing an application’s interaction with its back-end database
CMS compromise -targeting and using content management system vulnerabilities as a foothold to install backdoor programs
Backdoor access – dropping additional malware to perform a myriad of tasks, including capturing keystrokes, that lead to compromised accounts, escalated privileges, and movement to other areas in the victim’s network
Credential theft – spyware/keylogger attacks involving unauthorized software or hardware introduced to a system to record user and system-generated information
Verizon expects that the report will help businesses and government organizations understand how to identify signs of a data breach, the important sources of evidence and ways to quickly investigate, contain and recover from a breach.

 

Businesses lack cyber insurance, fail to report attacks: survey
09 Mar 2016

 

Businesses see cyber security as important but majority do not take it seriously enough, with most companies lacking cyber insurance and only under a third of attacks being reported.

These were among the findings of the Cyber Security: Underpinning the Digital Economy report by Barclays and the Institute of Directors (IOD) which showed a “worrying gap” between awareness of the risks and preparedness among companies.

The report, which polled nearly 1,000 IOD members, found that only around 57% of business leaders have a formal strategy to protect themselves even though 91% say that cyber security is important.

The study also revealed that only 20% of British businesses hold cyber insurance and just 21% are considering cyber insurance within the next 12 months.

Of the companies that have been victims of cyber attacks, only 28% reported the incidents to the authorities even if 49% of attacks resulted in interruption of business operations and 11% caused financial losses.

“No shop-owner would think twice about phoning the police if they were broken into, yet for some reason, businesses don’t seem to think a cyber breach warrants the same response,” said Richard Benham, a cyber security management professor who authored the report.

The study also lamented that government efforts to tackle cybercrime seem to be failing to get through to businesses since 32% of IOD members were still unaware of Action Fraud Aware, the UK’s national reporting centre for fraud and internet crime.

Benham said the report proves that companies need to get real about cybercrime and its financial and reputational consequences.

“Our report shows that cyber must stop being treated as the domain of the IT department and should be a boardroom priority. Businesses need to develop a cyber security policy, educate their staff, review supplier contracts and think about cyber insurance.”

 

ASIC reports on ASX cyber resilience
14 March 2016

The Australian Securities and Investments Commission (ASIC) has released its first assessment report on the cyber resilience of the Australian Securities Exchange (ASX) and Chi-X.

“Cyber resilience is now widely regarded as one of the most significant concerns for the financial services industry and the economy at large,” the regulator says.

“The cyber resilience of our regulated population is, therefore, a key focus.”

The report concludes the ASX and Chi-X have met statutory obligations to hold sufficient resources for the management of cyber resilience, and notes some “encouraging practices”.

However, a consistent industry-wide approach is required to address developing cyber threats, ASIC says. “We will continue to work with government and other regulators to support industry to achieve this.”

The report calls on the wider financial services sector to recognise the growing cyber threat, and refine systems and processes to prevent and address critical issues.

It calls for senior management to closely manage cyber risk from internal and third-party sources, establish robust collaboration and information-sharing networks to access the best defensive intelligence and technology, and implement thorough cyber awareness training programs.

“Because of the dynamic nature of the cyber threat landscape, a comprehensive and long-term commitment to cyber resilience is essential to assist all organisations and the Australian economy to manage this threat,” ASIC Commissioner Cathie Armour said.

 

Cyber insurance still leaves breach victims out of pocket
15 Mar 2016

 

New research by a leading insurance analytics and information service has suggested that businesses with cyber coverage are still left out of pocket when it comes to a data breach.

The research from Advisen and ID Experts has found that “the vast majority” of cyber breaches fall below cyber insurance deductibles leaving businesses with costs.

Entitled, Mitigating the Inevitable: How organisations manage data breach exposures, the survey of more than 200 risk professionals found that 25% of respondents suffered a data breach over the last 12 months that fell 91-100% below their deductibles.

“In fact, of the respondents who purchase cyber insurance and have identified a data breach in the previous twelve months, nearly all fell below their deductibles,” the report states.

“While cyber coverage is increasingly viewed as an essential part of many corporate insurance programs, it is designed to protect against low frequency but high severity occurrences.”

The report notes that, as cyber is a relatively new form of coverage, organisations are still grappling with its application and their own cyber security concerns.

“Cyber insurance is a relatively new coverage and the number of claims filed is comparatively few compared with more mature lines of business,” the report continues. “But in reality, even if a data breach is large enough to trigger coverage under a cyber insurance policy, organisations will still often be required to assume some of the financial burden.

“For example, the cost of the breach could have exceeded the amount of coverage purchased, or the losses could have fallen under one of the policies exclusions such as intellectual property, infrastructure, and/or reputational loss.”

The report backs cyber coverage as a helpful tool in the fight against cyber attacks as the coverage often includes benefits that businesses can use in response to breaches pointing to the importance of these value-adds when dealing with the cover.

“In addition to loss indemnification, cyber policies also provide access to a variety of tools and services such as risk assessment tools, data breach incident response plans, and educational resources, to help manage cyber security risks,” the report states.

“Seventy percent of respondents said that their policy offers free tools to help manage their cybersecurity risks. Forty-four percent of the respondents said they have used them.”

 

Insurers ‘sceptical’ of booming cyber-risk market
21 March 2016

Increased digitisation and interconnectivity have made cyber threats “one of the top global perils” of this year and beyond, according to research group IDC Financial Insights.

This may spell bad news for businesses, governments and consumers, but it provides “tremendous opportunities for insurers to capitalise on this largely untapped market”.

However, IDC Financial Insights says insurers are “highly sceptical” of the cyber-insurance market.

Reasons include lack of historical data for underwriting and limited understanding about exposures.

Senior Research Analyst Sabitha Majukumar says inadequate coverage, high premiums, too many exclusions, restrictions and uninsurable risks are typical characteristics of cyber insurance products currently on the market.

“We strongly believe insurers should consider the available evolving tools and technologies in the cyber-risk exposure-monitoring and assessment space,” she said.

 

Physical cyber attack risk exposes gap in coverage
21 March 2016

Physically destructive cyber terrorism is a “real gap” in current insurance coverage, according to the head of Australia’s Reinsurance Pool Corporation (ARPC).

Speaking in Sydney last week at the Cyber Risk Seminar hosted by Finity and the Australian and New Zealand Institute of Insurance and Finance, ARPC CEO Chris Wallace said the risk of catastrophic physical property and infrastructure has increased as the physical world and cyberspace become more interconnected.

“Yet cyber terrorism is not covered by Australia’s terrorism insurance scheme because it is defined as a computer crime, which is excluded by the Terrorism Insurance Act 2003.”

Dr Wallace told insuranceNEWS.com.au the ARPC wants to highlight the existence of the gap so the market will develop policies to cover it.

“There have been some physically destructive attacks around the world,” he said.

“There are not many of these attacks, and we’re not saying terrorists have the capabilities, just that there is a gap in the cover that is available in the market.”

Dr Wallace gave the example of a German steel mill’s electronic control system that was hacked into in 2014, causing “massive damage” to the blast furnace.

According to the German Federal Office for Information Security (BSI) the attackers accessed emails to steal logins, giving them access to the electronic control system.

And in 2008 Russian hackers shut down alarms, cut off communications and super-pressurised a Turkish crude oil pipeline, causing it to explode and causing a major fire.

Finity Consulting Principal Stephen Lee also acknowledged the potential physical damage from cyber attacks.

“The cyber attacks carried out in the US against Sony in November 2014 and Target in December 2013 generated a great deal of global media coverage, as have other attacks since then,” he said.

“But in our increasingly connected world, a cyber attack can also mean disruption to utilities or cause malicious damage to property. With the ever-present risk of terrorism in today’s environment, this is a risk that businesses cannot afford to ignore.”

Mr Lee says getting board level involvement in cyber risk management is critical.

“Recognising the risks both to data, business interruption and physical assets is an important first step to tackling the problem,” Mr Lee said.

“Insurers have a key role in helping the business community and the wider economy to manage this risk.”

Dr Wallace says he expects the market to quickly develop appropriate cover over the next few years.

 

FBI warns vehicles are ‘increasingly vulnerable’ to cyber attacks
22 Mar 2016
The FBI has warned that modern vehicles are becoming “increasingly vulnerable” to cyber attacks and warned that the safety of plug-in telematics devices is paramount.

In a public service announcement released last week, the FBI and National Highway Traffic Safety Administration  (NHTSA) in the United States, warned that drivers need to be wary of cyber threats.

“Modern motor vehicles often include new connected vehicle technologies that aim to provide benefits such as added safety features, improved fuel economy, and greater overall convenience,” the PSA notes.

“Aftermarket devices are also providing consumers with new features to monitor the status of their vehicles. However, with this increased connectivity, it is important that consumers and manufacturers maintain awareness of potential cyber security threats.

Therefore, the FBI and NHTSA are warning the general public and manufacturers – of vehicles, vehicle components, and aftermarket devices – to maintain awareness of potential issues and cybersecurity threats related to connected vehicle technologies in modern vehicles.”

The announcement follows news last year that hackers had infiltrated and taken control of a car whilst driving on the freeway in an experiment for technology site Wired.

The FBI acknowledged that this amount of control remains the biggest threat to vehicle owners but other issues are still prevalent.

“Although vulnerabilities may not always result in an attacker being able to access all parts of the system, the safety risk to consumers could increase significantly if the access involves the ability to manipulate critical vehicle control systems,” the announcement continued.

The security and safety of plug-in telematics devices, which use the cars OBD-II slot under the dashboard, were also mentioned for monitoring as Progressive suffered a hack of their device last year.

“More recently, there has been a significant increase in the availability of third-party devices that can be plugged directly into the diagnostic port,” the PSA states.

“These devices, which may be designed independent of the vehicle manufacturer, include insurance dongles and other telematics and vehicle monitoring tools. The security of these devices is important as it can provide an attacker with a means of accessing vehicle systems and driver data remotely.

“Vehicle owners should check with the security and privacy policies of the third-party device manufacturers and service providers, and they should not connect any unknown or un-trusted devices to the OBD-II port.”

 

 

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How to Set Effective Goals

A little primer as 2016 flys by…

A reminder that you can’t win the game of…football/business/life …without kicking enough goals!

Be Realistic

It’s easy to get carried away with gigantic aspirations; success is often attributed to thinking big. However, overzealous ambition has the ability to undercut true potential. Setting the bar too high or over committing your time can lead to creating a culture of collapse.

Avoid wishful thinking. Understand what you are committing to and what that commitment will look like throughout your daily or weekly processes. The first step to creating a realistic business goal is to ensure you have gumption to see it through to completion. Attainable goals rely on real temporal pressures, real budget constraints and a real wish to succeed. If you don’t have the time, resources or intention needed to hit your targets, you probably won’t.

Stay Specific

Being specific about how you will achieve your goal gives you a clear idea of where to save time, cut costs or losses, and increase productivity where it counts most. It also ensures you know what you need to do to be able to tick the goal off.

Being specific from the outset also prepares you for potential hiccups on the road to success. Nutting out the details at the start will highlight oncoming pitfalls and grant you the chance to seek out any necessary advice you may need to avoid disaster. Organisation never hurts, and knowing the finer details of your plan is a simple way to keep your goals from becoming hazy, unattainable dead-ends on the horizon.

Note Your Progress

It’s no good going through the process of creating a realistic objective and devising a specific plan to achieve it if you don’t pay attention to the results. Missing the target can teach you a lot about how to win on your second attempt. Keep an eye on your results; it’s worth the time spent doing it, especially if you don’t like what you find.

Another advantage of noting your progress is that when things begin to slip you know sooner. Staying on track requires a bit of feedback. Being aware of the development of your specific benchmarks allows you to employ the necessary amount of grit needed to keep things running smoothly.

Create Consistency

It is wise to keep your list of goals short, not only for the sake of realism, specificity and process, but also to ensure consistency. Having too many goals can create confusion, not only because of time constraints, but also because of company or team objectives. You need to make sure that your goals are consistent with the fundamental priorities of your business or team.

If your goals clash, or work against company values, something is going to fail. Increasing client satisfaction might not sync well with reducing staff time spent on the phone. Figure out what is most important and focus on that first. Being consistent irons out unnecessary creases, leaving you to actively focus on the process at hand.

Commit to Processes

Your goals should have a specific time frame and will probably have hurdles along the way. This is why you should commit to a process. Focusing on processes minimises the stress of looming deadlines, increases productivity, and focuses on the positives of what you achieve, rather than pointing to the areas where you fell short. In a way, committing to process requires letting go of your result. But it is more a matter of ensuring that you keep a steady eye on the small pictures, as well as the big.

Committing to process will also point to whether or not your goal is relevant. If you need to spend three out of five days a week working on a goal that has little to do with monthly KPIs, chances are it’s not relevant enough to implement just yet. Prune it down, refocus, revise your process and recommit. This will build long-term resilience and positive determination.

Enjoy

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5 Things Workers Compensation Covers, and Doesn’t!

5 Things Workers Compensation Covers, and Doesn’t!

 

In part 1 of our Workers Compensation series, we touched on what exactly Workers Comp is, how it is sourced and why its needed. Today we look at 5 things that Workers Comp can cover….and a few things that it doesn’t exactly cover!

So what exactly can Workers’ Comp do? How can it protect your business as well as your employees? Let’s take a look at five important benefits this policy offers.

1. Medical Costs to Treat Immediate Injuries and Illnesses

A business should take every feasible measure to prevent workplace injuries and illnesses, but sometimes, all the safety training in the world won’t prevent a sudden accident.

When an employee is injured and needs medical attention, the employer can be (and usually is) responsible for covering the cost. Workers’ Comp steps in to pay for those emergency room visits, ambulance rides, and other medical bills.

2. Missed Wages

So what happens when your employee has an occupational accident and can’t work for a while? Employment laws require you to pay for at least a portion of their missed wages while they recover. This can mean weeks of pay on top of finding, training, and paying for a temporary replacement worker.  All told, the lost work can be a huge expense. Workers Comp covers these missed wages and reduce your financial burden.

3. Ongoing Care

Sometimes, a work injury or illness is so severe that the employee needs ongoing care, such as surgery, rehabilitation, or appointments with specialists. Even if that employee never returns to work, your business may be responsible for the cost of their care. In the eyes of the law, it was your duty to ensure a safe working environment.

Workers Comp policies offer this exact ongoing coverage in the unfortunate instance of an employee requiring ongoing treatment.

4. Funeral Costs and Death Benefits

If a work tragedy ends with an employee’s death, Workers Comp Insurance can provide funds for funeral expenses, allowing you, your staff, and the employee’s family to grieve without stressing about the service.

Policies even provide coverage for death benefits, such as support payments to the employee’s dependants.  Offering these benefits can help you keep quality workers if you operate in a high-risk industry.

5. Legal Costs if an Employee Sues You Over the Injury

If an employee is hurt at work and thinks your business is to blame, you may face a lawsuit soon after the injury.  Unfortunately, the cost of a lawsuit can far exceed medical bills and treatment costs, depending on how the court rules.

Luckily, your Workers Comp policy has Common Law Liability up to $50million, so your insurance company can help you pay for attorney fees, court costs, and judgements or settlements.

And What Doesn’t Workers Compensation Provide for?

1. Wages for a Replacement Employee

When a valuable employee is the victim of a workplace accident, they might be off of work for a while. A hurt back is enough to keep a person home for a few days, and you might manage without the employee for that time. But severe injuries can take months to recover from, and the world doesn’t stop turning for an injured employee.

In the interim, you may need to hire a temporary replacement worker to keep your business moving. Keep in mind, though, that Workers’ Comp doesn’t cover the replacement employee’s wages. That responsibility is on you.

2. Funds to Improve Workplace Safety

As a business owner, it’s your responsibility to make a safe work environment for your employees, and that means you must mitigate dangerous conditions before they lead to injuries. For example, you may need to invest in safety equipment and training to ensure your employees have the gear and skills to do their work safely.

Even if an employee is injured in an accident, Workers Comp doesn’t provide funds for you to improve workplace safety. It’s best to take care of safety issues proactively to avoid a claim from the outset.

3. OSHA Penalties

You’re responsible for maintaining workplace safety, but Occ Health and Safety is there to make sure you’re following through on that responsibility.  Failure to follow safety standards can result in hefty penalties if your business is inspected by WorkCover or OHS inspectors.  Workers Comp doesn’t offer any coverage for paying those fines, even if an OSHA violation caused the employee injury.

4. Third-Party Damages

In especially unfortunate circumstances, a third party, such as a customer, client, or passerby, could get caught in the same accident that injures your employee. Maybe an out-of-control backhoe swings its shovel into a random car. Maybe a heavy box falls on a customer when the employee carrying it slips on a puddle.

In these instances, Workers Comp only covers the costs associated with your employee’s injuries. The good news though is that your Business Public Liability policy will step in and cover the third party’s injuries.  Public Liability can cover their medical bills and pay for your legal expenses if they try to sue you over the injury.

5. Get-Well-Soon Cards

Ah…no

Need More on Workers Compensation?

perth insurance brokers
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Workers Compensation Insurance WA

Nearly every business faces at least some risk of on the job accidents, whether it be carpal tunnel injuries, stress related incidents, a fall down the stairs or equipment malfunctions that cause loss of limb or even death.

If one of your employees is hurt while working for your business, you could be held responsible for paying related medical expenses as well as the wages he or she would have earned during his or her recovery period.

Workers Compensation laws are regulated at each state level in Australia, and in Western Australia we are regulated by WorkCover – The WA State Government Workers Compensation Regulator and Authority.

Workers Compensation insurance is obtained through brokers – who source coverage through 6 Workers Comp Insurers – who are all regulated by WorkCover.  Every business is required to have Workers Compensation insurance.

Workers Compensation Insurance Explained

Commonly referred to as “workers comp”, Workers Compensation Insurance in WA is designed to protect your business by paying the costs associated with workplace illness and injury. In most cases, those include medical bills and lost wages — that is, the wages an injured employee would have earned had he or she been able to work during his or her recovery period.

Without insurance in place, those costs can be prohibitive: in addition to compensating the injured employee, a business often has to pay wages to a replacement employee to perform the duties the injured person is no longer able to carry out.

Workers Compensation Insurance WA also includes Employer’s Liability Insurance, which helps pay for your legal costs in the event that you have to defend yourself in court against an employee’s claim of illness or injury.

Those costs can be very large – even if the court finds that your business is not responsible for the illness or injury in question, you will have to pay for your legal defense, which might include attorneys’ fees, court costs, docket costs, witness fees, and more.

How Statewide Makes Buying Workers’ Compensation Insurance Easier

  1. Secure the Coverage You Need Fast.
  2. Choose from all Major Insurers.
  3. Get our Expert Opinion.
  4. Receive a Tailored Quote.
  5. Discounts Available.

Business Tips

  • Consider Saving Money By Excluding Working Directors from Coverage.

In Western Australia it is not mandatory for Working Directors to include themselves in the cover, and by not including cover/wages, this can offer save tremendous amounts.

  • Conduct regular safety training for employees.

The best way to avoid a claim is to avoid injuries in the first place. Be sure to instruct employees in the proper use of all equipment and materials, as well as in proper lifting and other injury-prevention techniques.

  • Provide appropriate safety or ergonomic gear.

Whether your business involves keyboard time or heavy lifting, the right equipment can help prevent injury. Invest in appropriate safety or ergonomic equipment, and instruct employees in proper and consistent use.

  • Keep a clean and safe workplace.

Regularly review your workplace for hazards, such as slippery floors or objects that could fall or be tripped over. Ensure that necessary repairs are made quickly and that warning signs and / or barriers are used to restrict access to high-risk areas.

Other Articles of Interest

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Cyber Insurance

Cyber Insurance

If your business handles sensitive customer data (such as credit card or bank account numbers), data breaches pose a serious threat to your financial stability.

Cyber Insurance protects business against the expenses associated with a data breach, which can run into the hundreds of thousands of dollars.

A lawsuit resulting from a data breach means your business is responsible for paying legal fees, court-ordered judgements or settlements, and other court-related costs. In addition, your business will likely have to notify your customers of the breach, provide them with credit monitoring services, and invest in public relations efforts to repair your business’s image. In the absence of Cyber Insurance, these costs can quickly drain financial reserves.

When you do carry Cyber Liability Insurance, it protects your business assets by paying for a legal defence, court-ordered compensation, and other related expenses. In other words, cyber liability coverage allows you to focus on rebuilding and restoring your customers’ faith without worrying about the data breach-related expenses

Cyber Insurance Coverage Explained

For many startups and small businesses, Cyber Insurance is available both as a stand-alone policy and as an add-on to a Business Pack Policy.

The two major types of Cyber Liability Insurance are first-party coverage and third-party defense and liability coverage.

First-party coverage offers financial compensation to help you address immediate customer and business needs, such as those that result when your in-house IT network goes down.

Third-party coverage protects you in the event of a lawsuit brought by a customer or partner for a data breach that your business’s actions or negligence allowed. Depending on your business’s specific needs, you may choose either or both types of coverage.

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Key Details About Cyber Insurance

The type of data breach insurance you need depends on the specific kinds of work your business does. Below are key concepts to keep in mind when considering which type of Cyber Liability Insurance to buy.

First-party response may cover…

  • Legal and forensic services to determine whether a breach occurred and assist with regulatory compliance if a breach is verified.
  • Notification of affected customers and employees, including costs such as letter preparation and mailing.
  • Customer credit monitoring, as well as monitoring of fraud, public records, and other information as needed.
  • Crisis management and public relations to educate your customers about the breach and rebuild your company’s reputation.
  • Good faith advertising.
  • Business interruption expenses such as costs for additional staff, rented or leased equipment, use of third-party services, and additional labour arising from a covered claim.
  • Cyber extortion reimbursement for perils including credible threats to introduce malicious code; pharm and phish customer systems; or corrupt, damage, or destroy your computer system.

Third-party defence and liability may cover:

  • Judgements, civil awards, or settlements you’re legally obligated to pay after a data breach.
  • Electronic media liability, including infringement of copyright, domain name, trade name, service mark, or slogan on an intranet or Internet site.
  • Potential coverage for employee privacy liability as well as network security and privacy liability.

The Risks of Data Breaches Are Real

Many small business owners may not think they need this type of insurance, but startups and small businesses are actually the most vulnerable to security threats. Thousands of small businesses handle sensitive customer credit or bank account information daily, and many are also responsible for protecting customers’ medical information,  driver’s license numbers, and other sensitive financial data.

All it takes is one careless mistake by an employee, unauthorised access by a former employee or vendor, unshredded documents, skilled hacker, or stolen laptop, and your company could suddenly face a legal and financial challenge. Combined with strong security measures, cyber liability coverage is a cost-effective way to mitigate that risk.

Protect Your Business with a Rapid Response

If your customers’ sensitive information is compromised, there’s a good chance they’ll opt out of doing business with you in the future. Similarly, potential customers who hear about the security breach will be less likely to work with your firm. You can minimise the negative impact the data security breach has on your business by acting quickly. Swift, decisive action helps restore customer confidence and protect your bottom line.

Cyber Insurance allows you to focus on damage control and customer relations instead of worrying about how much damage your legal defence will have on your bank account.

 

Business Protection Tips

Implementing the following risk-management strategies will reduce the likelihood that your business experiences a data breach, and may even reduce your Cyber Liability Insurance premiums.

  • Keep sensitive information on a “need to know” basis.

Use passwords or physical locks to keep sensitive electronic data and physical files accessible only to those who need it to do their jobs.

  • Deploy encryptions, network security and firewalls.

If you have remote employees, limit the use of portable technology and provide a virtual private network connection for access to company computers.

  • Train employees on proper care and control of customer data.

Ensure employees understand the sensitivity and liability related to customers’ financial and personally identifiable information. Document processes and conduct regular training sessions as well as security audits to ensure compliance.

How Statewide can Help

  • Fast, Efficient Coverage.
  • More Choices. All Cyber Insurers sourced, multiple quotes.
  • Expert Insurance Brokers. Work with a broker who is familiar with your industry and can explain to you which types of coverage you need.
  • Customised Insurance Products. Find an insurance policy that’s tailored to your needs, so you never pay for coverage you don’t need.
  • Cyber Cover Website.  CyberCover will be launching in the first quarter of 2016, a dedicated online Cyber Liability placement website, developed exclusively by Statewide Insurance Brokers.