Q: Why does a Broker charge a fee when they receive brokerage/commission from the Insurer?
A: The commission received by the broker from an insurer is to cover the initial expense involved in setting up the policy/policies.
The Broker Fee is an administration fee that is calculated on the ongoing management/service required for an account. The services would include at least the following and more:
- General service provided by the Account Manager and support staff through the year including the renewal process
- Claims management
Q: What are Statutory Charges that appear on my Invoice ?
A: Statutory charges are the compulsory "Government Charges" that are placed upon premiums and collected by the Treasury.
The Insurer and Broker receive none of the funds collected. These charges include the following and all but GST vary from State to Sate:
- Fire Service Levy (FSL)
- Goods & Services Tax (GST)
- Stamp Duty (SD)
- Supplementry Levy
Q: What do I need to pay an invoice by EFT?
A: Our bank account details are included in correspondence to you. Please remember to include invoice number as the bank reference & email or fax a remittance advice to shirleyt@gsaib.com.au or fax 02 9252 5882
Q: Can I pay by credit card?
A: Yes, however we do ask you to fill out an authorisation form, and please note there is a credit card charge of 0.90% for visa & MasterCard and 2.8% for American Express. This is a charge imposed by our credit card providers & GSA do not profit from the charge.
Q: What are our credit terms?
A: All invoices are due & payable within seven days of receipt of invoices
Q: What are the benefits that are offered by Credit Insurance?
A: Numerous benefits are available
1. Increased sales in the confidence that credit is protected. The company's major asset (usually debtors represents in excess of 40%) is secured.
2. Balance sheet and cash flow protection.
3. Improves budgeting (a known cost versus unknown loss)
4. Reduces bad debt reserves thus freeing trapped capital.
5. Claims can be assigned to financial institutions enhancing the business's ability to secure financing at preferential terms.
6. Credit management discipline/assistance and dedicated support through an advised up to date information network.
Q: Is cover only provided when a buyer becomes insolvent?
A: No, Credit Insurance can also provide cover for delayed payment (Protracted Default) ensuring cash flow disturbance is kept to a minimum.
Q: How long after a credit insurance loss is a claim paid?
A: The aim of most Insurers is to pay the claim ASAP. With fully completed Claim forms, insolvency claims are paid within 30 days after receipt of external proof of debt. In the case of Protracted Default claims, following the policy endorsed waiting period (usually 4 months after protracted default has occurred).
Q: Are all debts from buyers covered in a Trade Credit Insurance Policy?
A: Whole turnover cover is suitable for most businesses wishing comprehensive cover and credit management support. This means all debts from buyers are covered unless the underwriter who considers the risk unsuitable for credit insurance excludes a buyer. In some instances, blue chip risks are mutually agreed exclusions.
Q: What does credit insurance cost?
A: Costs 0.1% to 1 % of Credit Sales excluding cash and GST. Premium Rates vary between 0.1% & 1% of annual sales depending on the market/trade sector, bad debt experience, spread of risks and total amount of sales to be insured. The level of own loss excesses may be used as a mechanism to reduce the cost of premium.
Q: What is meant by a "claims made" insurance policy?
A: An insurance policy written on a "claims made" basis is a type of insurance policy that requires the insured to notify all claims and any facts or circumstances that may lead to a claim to the insurer within the period of insurance. The mistake on which the claim is based can occur either during the period of insurance, or earlier depending on the retroactive date of the policy.
Q: How do I make a claim?
A: Please contact our claims team by phone or e-mail on;
Gordon Tipene
Claims Manager
Phone: 8274 8114
gordont@gsaib.com.au
Angela Speranza
Claims Executive
Phone: 8274 8134
angelas@gsaib.com.au
For Michel's Patisserie & Gloria Jeans stores, please contact;
Angela Speranza
Claims Executive
Phone: 8274 8134
angelas@gsaib.com.au
Alternatively, you can contact them by fax, post or by speaking to your Account Manager.
Q: Will I need to complete a claim form?
A: Some vehicle and property claims can be lodged over the phone and will not require a claims form.
To find out if a claims form is needed, please contact our claims team. If required we can then forward a form to you by e-mail, fax or post.
Q: I am sending workers interstate, do I need to arrange a policy for them?
A: As you may not be aware each states cross border legislation differs, but for the purpose of initially identifying if you require an interstate policy is as follows:
- Identify the employees usual place of employment
- If you are unable to identify the employees usual place of employment, then you will need to identify the states in which the employee is usually based.
- If either of the above cannot be clearly answered, you will then need to identify the state in which the employer's principal place of business in Australia is located.
Example 1: Mr Smith runs an air conditioning installation business in NSW, which successfully obtained a contract in VIC. The contract will last 2 months but due to the fact that the employees main usual place of employment is in NSW and the VIC employment is only on a temporary basis, the employees will remain covered under the NSW and a VIC policy is not needed.
Example 2: Mr Smith air conditioning business is growing and decides to expand in ACT therefore he hires 2 installers that reside in NSW but 100% of there jobs are in the ACT. Due to the fact that the employees usual place of employment is located in the ACT, Mr Smith is required to place an ACT policy to cover the 2 new employees.
Q: How should I respond to a letter from a solicitor regarding an injured worker?
A: A worker is entitled to obtain independent legal advice post a work related injury and solicitors will require to gather information from all parties involved (insurer, employer etc). If you receive any such request, contact your insurer or broker/consultant immediately, not only can they provide you with expert advice but would be able to respond on your behalf, as the majority of information required can be issued by your insurer direct.
Q: What can I do to dispute my Workers Compensation Premium?
A: You may contact your insurer to resolve the issues and appeal to WorkCover to review the premium in dispute. Should you require assistance with a dispute or WorkCover appeals please contact our office for independent advice.
Q: Do I need to provide my corporation's financial statements?
A: If you are a director, officer or senior manager of a public corporation then you will need to provide the insurer with a copy of your latest financial statements in order to obtain a quote for Directors & Officers Liability (D&O) insurance.
If you are a director, officer or senior manager of a private "Pty Ltd" corporation there are Directors & Officers' Liability (D&O) insurers who are prepared to provide quotes for Directors & Officers' Liability (D&O) insurance without reviewing your latest financial statements. However, if you do not provide your financial statements then the insurer will impose an insolvency exclusion which means that you will not be covered for any claim alleging insolvent trading.
Q: Will the Directors & Officers' Liability (D&O) policy still cover me if I retire/leave the corporation?
A: Most Directors & Officers' Liability (D&O) policies provide cover for any past directors, officers or senior managers, so whilst the corporation maintains a current Directors & Officers' Liability (D&O) policy you will continue to be covered under this policy. However, if the corporation decides not to renew its Directors & Officers' Liability (D&O) policy then your cover will lapse.
Some Directors & Officers' Liability (D&O) insurers provide an extension under their D&O policies for retired directors. This policy extension provides up to 7 years run-off cover for any director who retires or otherwise leaves the corporation prior to the board deciding not to renew its Directors & Officers' Liability (D&O) policy.
Q: Does a Directors & Officers' Liability (D&O) policy extend to cover claims against the corporation?
A: Generally, a Directors & Officers' Liability (D&O) policy will not extend to cover claims made against a corporation as a legal entity. Directors & Officers' Liability (D&O) policies are only intended to cover claims against directors, officers or senior managers. However, where a corporation has indemnified a director, officer or senior manager, the Company Reimbursement section of the Directors & Officers' Liability (D&O) will reimburse the corporation where it has legally paid expenses on behalf of its directors, officers or senior managers.
Some D&O insurers will provide an element of cover to the corporation as a separate legal entity. This is known as "entity cover". Most typically, "entity cover" is provided in respect of employment related claims (e.g. wrongful or unfair dismissal, harassment or discrimination), however it can also extend to company securities claims.
Q: What are the most likely sources of legal action against directors, officers or senior managers?
A: Legal actions can be taken against directors, officers or senior managers by the following groups:
1. Employees ~ actions alleging discrimination, harassment, breach of employment contract, wrongful or unfair dismissal;
2. Shareholders ~ actions alleging that the directors, officers or senior managers have mismanaged the operations of the company and its funds;
3. Creditors ~ actions alleging that the directors, officers or senior managers allowed the company to trade knowing that it could not pay its debts;
4. Government Authorities/Regulators ~ actions alleging that the directors, officers or senior managers have breached a piece of legislation, statute or regulation that governs the company's activities.
5. Competitors ~ actions alleging that the directors, officers or senior managers have engaged in misleading, deceptive or unconscionable conduct;
6. Customer actions alleging that the directors, officers or senior managers have engaged in misleading, deceptive or unconscionable conduct.
Q: What are a director's duties/responsibilities?
A: A director has five core duties or responsibilities:
a) A duty to discharge their responsibilities with due care and diligence;
b) A duty to exercise their powers and discharge their duties in good faith;
c) A duty not to improperly use their position to gain advantage for themselves or someone else or to cause detriment to the company;
d) A duty not to improperly use information obtained as a director to gain an advantage for yourself or someone else or to cause detriment to the company;
e) A duty to disclose any material personal interest in dealings with the company.
Q: Who is covered under a Directors & Officers' Liability (D&O) policy?
A: A Directors & Officers' Liability (D&O) policy will cover any past, present of future director, officer or senior manager of a corporation. Generally, Directors & Officers' Liability (D&O) policies will also extend to cover any person who acts in the capacity of a director, officer or senior manager of a corporation even though they may not have been validly appointed as such, and will also cover the directors, officers or senior managers of any subsidiary company of the company in whose name the Directors & Officers' Liability (D&O) policy has been taken out.
Q: What is a Wrongful Act?
A: Under most Director & Officers' Liability (D&O) policies the definition of Wrongful Act includes any actual or alleged breach of duty, breach of trust, neglect, error or misstatement, misleading statement, omission, breach of warranty of authority, or any other matter claimed against a director, officer or senior manager solely because of their capacity a director, officer or senior manager.
Q: What does a Directors & Officers' Liability insurance policy cover?
A: A Directors & Officers’ Liability (D&O) insurance policy protects the directors, officers and senior managers of a corporation against loss they are legally liable to pay for claims made against them arising from allegations of a wrongful act in the conduct of their duties on behalf of the corporation. Generally, a D&O policy will cover any damages awarded against a director, officer or senior manager of a corporation, and will also cover any legal costs incurred by the director, officer or senior manager in defending a claim. In some cases, D&O policies will also cover fines and penalties awarded against a director, officer or senior manager of a corporation.
Q: How long should I retain a Professional Indemnity (Professional Indemnity (PI)) policy after I retire?
A: A professional’s legal liability for claims arising out of alleged mistakes in past advice or services does not disappear simply because they have retired. In most Australian states, a person has up to six years after the completion of the services to make a claim.
In the case of a professional who was a director, partner or employee of a firm that will continue to trade after their retirement, they will have protection under the firm’s Professional Indemnity (PI) insurance policy whilst the firm maintains a current Professional Indemnity (PI) insurance policy. It is therefore prudent practice for a professional who is about to retire, to enter into a written agreement with their firm which obliges the firm to keep them indemnified for any allegations made against them arising out of services performed whilst they were with the firm.
Covering this exposure is a little trickier for a professional who is a sole trader or where the firm is going to be wound up upon the professional’s retirement. In this case, the professional will have to arrange for a “run-off” Professional Indemnity (PI) insurance policy to ensure they have adequate insurance protection. The trouble is that Professional Indemnity (PI) insurers will only offer “run-off” Professional Indemnity (PI) policies on an annual basis. This means that a retired professional has to set aside adequate money to fund up to a minimum of six (6) renewals of their Professional Indemnity (PI) policy after they have retired.
Q: When should I notify my insurer of a fact or circumstance?
A: Generally, it is prudent to notify your insurer of a fact or circumstance if you receive a threat (either written or verbal) that someone is going to commence legal proceedings against you, or they are going to refer a matter to a tribunal which has jurisdiction over your profession/industry. Your insurer needs to be notified immediately if you receive a writ or summons to appear at a hearing.
Q: What is the retroactive date?
A: The retroactive date is a date included in all claim made policies. It determines whether a claims made will respond to a claim arising out of an act, error or omission that occurred prior to the inception of the policy. If the act, error or omission took place after the retroactive date but prior to the policy inception, a claim made policy may respond to claims arising out of this act, error or omission if the insured first became aware of the potential claim during the period of insurance and notified it to the insurer.
Q: Will a Professional Indemnity policy cover me for the actions of consultants, sub-contractors or agents who provide advice or services on my behalf?
A: Yes, a Professional Indemnity (PI) policy will cover a person for their liability arising out of acts, errors or omissions committed by consultant, sub-contract or agent who provides advice or services on their behalf. Generally, a Professional Indemnity (PI) policy will not cover the liability of the consultant, sub-contractor or agent who will be expected to hold their own Professional Indemnity (PI) policy.
Q: Who is covered under a Professional Indemnity (PI) policy?
A: A PI policy will cover any sole trader, partnership or corporation that provides advice or services for a fee or some other benefit (e.g. commission). If the PI policy is taken out in the name of corporation the policy will also extend to cover the corporation’s directors and employees.
Q: Who is a Professional?
A: If you give advice or provide a service of a specialised nature to another person or organisation, and there is an expectation that the person or organisation will rely on that advice then you may be regarded as being a professional. Generally, you will be regarded as being a professional if the advice you give or service you provide is of a skilful character according to a established discipline for which recognised qualifications are required.
Q: What does a Professional Indemnity insurance policy cover?
A: Professional Indemnity (PI) insurance policy protects a professional against legal liability for claims arising out of advice or services provided to clients for a fee or for some other benefit (e.g. commission). PI policies cover claims made under common law (negligence) and for breach of statutes which govern a professional's activities (such as Trade Practices Act 1974 (Cth).
Q: When I am calculating my Gross Profit Sum Insured for Business Interruption cover, should I deduct Wages and Payroll under the "Uninsured Variable Expenses"?
A: No. Firstly, if you have a major interruption to your business and production ceases, you still have to pay wages/payroll/super/bonuses for the first 4 weeks. When calculating your Gross Profit sum insured, we strongly recommend that you do not deduct any amount for Wages/Payroll (incl Super/Workers Comp prem/Payroll Tax/Holiday pay) and cover them 100% under your Gross Profit Sum Insured. The reason for this is that though your business could be interrupted for up to 12 months or more, you have invested a lot of money and time to train these workers and if you decide to make them leave, you will not get them back when the business is up and running again. However, there are other options in regard to companies who have a large payroll and you can decide to cover your payroll/wages on a partial basis (or Dual Basis). In this case, the company may decide to cover their payroll/wages 100% for the first, say, 8-10 weeks and then cover the remaining amount of payroll/wages for say, 30-50%, of the remaining weeks of the Indemnity Period. So the client is basically keeping the key directors/staff/workers and will look to lay-off the lesser key staff if they occur a major disruption to the business. In doing so, they also will save on their insurance premium. If you are not sure what staff you would keep or lay-off, as mentioned, the best and safest way is to cover your payroll/wages 100% and though you may pay a little extra in your premium, your workers will thank you for it!
Q: I have been asked for a Certificate of Currency, can you provide one?
A: Yes, we can provide you with a Certificate of Currency (COC), as long as your insurance policy is currently in force and has been paid in full. You should contact your Account Manager to organise a COC.
Q: Who is entitled to drive company cars (in the eyes of the insurer)?
A: Any authorised person who works for the company is entitled to have access to company vehicles. It is expected that these people would hold a current drivers license and would not be under the influence of drugs or alcohol, as the policy would exclude any claims related to those drivers.
Q: Who is covered under the corporate travel policy?
A: Most travel policies extend to cover all directors, managers, officers of the company that are on authorised company travel. These may also extend to cover children and spouses if they are travelling also. It would be recommended to refer to contact your account manager on policy wording prior to travel.
Q: Do I need to insure for Loss of Income/Profit or other costs incurred following a loss ?
A: The period following a loss can be the most important as you may not be able to continue trading, or find that your ability to carry on normal trading is adversely affected and therefore your income/profit is impacted.
It is also important to not only have insurance for the loss of income but for any additional cost that you incur to enable you to trade, such as, but not limited to the following :
- Renting of an alternative location
- Overtime salaries
- Extra costs in obtaining replacement raw materials
- Extra cost involved in expediently obtaining replacement equipment
A review of the clients business by the broker will identify what needs to be considered to ensure the trading is continued and impacted as minimally as possible.
Q: Why shouldn't I obtain insurance directly with an Insurer?
A: For some insurance needs, this is certainly a viable option but the expertise brought to you by a broker can mean the difference between being insured cheaply and being insured adequately.
Your broker will have an understanding of your business and have the expertise to identify what you need to consider for your business insurance.
If you have claims to make directly, you will have to rely on your own understanding of the policy rather than our Claims Manager who will run the matter for you and apply his full knowledge and optimise your recovery without you having the headache of the whole time consuming process
