Construction industry insurance

How The Construction Industry Will Be Impacted By The Capacity Crunch?

by with No Comment blog

The Australian construction sector is facing increasing pricing, higher excess levels and restricted insurance cover due to natural disasters and project failures. There is a looming potential for insurers to shift away from long term construction risks, instead replacing them with annually renewable risk exposures. 

At the beginning of the year treaty renewals experienced an increase in reinsurance costs. This lowered profitability and led to multiple insurers completely withdrawing their cover from the construction industry, decreasing the supply chain.

The construction market recap report from the past few years outlined “the construction industry is not immune to major events”.

This has created implications for long term contract periods, with capital reducing long term risk and alternatively opting for short term risk exposures. 

A sequence of high profile construction project failures globally, in combination with an array of natural disasters as well as COVID-19 has impacted the construction industry greatly. So much so that insurers are considering insurance coverage restrictions for the construction industry. 

A number of insurance companies have placed their construction books into run-off and in the last 12 months or so, 15 global leading markets withdrew from underwriting construction risks. This resulted in a $1.27 Billion loss in market capacity. 

These losses have led multiple insurers to review their long term participation in the construction industry. Insurance premiums increased by 30-35% last year, with construction liability insurance and excesses also rising significantly. 

The report suggests that insurers will become more selective with the terms and conditions that they offer for construction risk. Other areas of insurance including property and casualty are also on the increase, as major markets avoid risks that don’t adhere to strict underwriting guidelines. 

Head offices are adopting an underwriting approach that focuses on practicality and profitability. Many underwriters are waiting for lead terms to be finalised before considering their participation in the industry, as they are restricted to the original approved terms. 

An example of a key area for concern is water damage. Insurance companies have experienced high volumes of claims for residential and building projects relating to water damage. This has led to increased premiums and cover being limited or excluded completely.

Businesses within the construction industry weighing up their insurance cover options may achieve a more positive outcome by investing in an insurance broker. Demonstrating lower risk and associated capital spend will optimally position businesses to obtain the best cover available. 

Despite the challenging entrance into 2021, insurers have the ability to position themselves to improve outcomes and navigate the market optimally in order to limit cost increases. 

Craig from Business Insurance Consulting is a highly experienced insurance broker that can assist with finding optimal cover for businesses, within the construction industry, that have been impacted by the capacity crunch. Get in touch with Craig for more information in regards to adequate cover for your business.

Credit:

Insurance News – https://www.insurancenews.com.au/local/capacity-crunch-hits-construction-sector

Adverse Weather

Adverse Weather Events to The Sum of $35 Billion For Australians

by with 21 Comments Uncategorized

In the past ten years alone adverse weather events have cost Australians $35 billion. This figure has doubled since the 1970’s and is only set to rise. Having large implications not only for everyday Australians but also for business owners. Making it increasingly important to obtain business insurance with an adequate level of cover.

The harsh impacts of climate change and rising sea levels is set to cost our economy $100 billion per year, according to a recent report by the Climate Council. The cost of extreme weather events is set to rise rapidly, increasing the value of insurance products.

The council specifically said the world is transitioning into a “decisive and transformative” time for climate action. Immediate action needs to be taken to ensure Australia can halve emissions by 2030 and achieve net zero emissions by 2040.

The council also mentioned that Australia has a lot to lose from climate change induced extreme weather events. On the other hand, we will see a great benefit from the zero-carbon economy. From being one of the largest exporters of fossil fuels to becoming a global leader in clean industries and renewable energy. Success is the only option.

Did you know that Australian are five times more likely to become displaced from a disaster caused by climate change than individuals residing in Europe? The cost of climate change for Australians will rise even further in the coming decades, projected to surpass $100 billion p.a by 2038.

The past few years we have experienced a “era of megafire” throughout Australia and also globally. These disasters including floods, fires and storms caused economic losses of $272 billion in 2020.

General Manager at Risk Frontiers Andrew Gissing advocates insurance having an important role in managing the increase in natural disasters.

Any business owner who isn’t confident that they are adequately insured for adverse weather events may want to consult an insurance broker, such as Craig at Business Insurance Consulting. A broker can analyse relevant product disclosure statements and find the optimum insurance for your business.

Gissing told insuranceNews.com.au that “climate change will see the potential for more frequent extreme weather events and with that a rise in average annual losses associated with those”

He goes on to say that minimising the risk is essential, by reducing the impacts of climate change and reducing carbon emissions.

This will lead to more affordable insurance for everyday Australians as well as Australian business owners. Creating a positive outcome for all parties involved.

There have been calls from the insurance industry for a while for reform and action nationally by both Australians and the Australian Government. With some action being taken already by various states and territories.

Craig at Business Insurance Consulting can assist you with any queries in regard to adequate insurance, for your business, in the event of adverse weather.

Public liability insurance

When and Why You Need Public Liability Insurance for Small Business

by with No Comment Uncategorized

If you are a small business owner that makes or sells products or interacts with the general public, it is important to consider obtaining public liability insurance. Lawsuits could have a detrimental effect on any industry if a business isn’t adequately insured. 

Public Liability Insurance 

This type of insurance covers general negligence, causing injury, as a result of your business. It is designed to protect your business against claims from accidents or injuries as well as accidental damage to property owned by someone else. A business owner or sole trader is accountable for customers, suppliers and anyone else who has involvement in the business. This should not be confused with professional indemnity insurance, which covers negligence in your business’ service.

If an accident or injury occurs your business may be liable for hefty legal fees as well as covering the cost of the damage or injury caused. If you are conducting business activities in public spaces, have people visit your work premises, work at other people’s premises or even manufacture goods your business may have legal liability in the event of damage or personal injury. Public liability insurance is the best defence against property damage or personal injury. 

Examples of claims:

A small toy business makes a toy that has a sharp edge and injuries a child playing with it. The parent may then make a claim against the toy business for the injury caused by the defective toy. 

If the toy business didn’t have public liability insurance they may have to foot the bill for legal fees and any other compensation.

A shop owner cleans their floors. It is mostly dry besides a small patch. A patron then enters the store and slips. The patron may make a claim against the business in the case of injury. 

This is another example where it is important to have the correct amount of public liability insurance cover for any legal fees and compensation.

Level Of Cover

Having an adequate level of insurance cover for your business needs is vital. Many events that occur leading up to claims being made towards businesses are unforeseen. Being sued for negligence can be costly to your business and have long-lasting negative impacts. It is important to find out exactly how much cover your business needs, as some industries require a certain level of cover in order to legally operate.

The Real Cost Of Public Liability

Although public liability insurance is not compulsory, by law, in Australia, some industries and occupations require business owners to obtain a policy. Depending on where you live you may be required to have public liability insurance in order to operate. 

If you hire a public venue you may also be required to obtain a policy in order to hire the space. Public liability insurance provides you with peace of mind in the unfortunate event of an accident or injury to another person in your workspace. Not having adequate cover could have a costly effect on your business. It may be in your best interest to engage with a business insurance consultant to decipher what kind of policy would suit your business.

Engaging With A Business Insurance Consultant

Public liability insurance cover is commonly purchased with the assistance of insurance brokers who specifically specialise in business insurance. Business insurance professionals have the ability to find a policy to suit your specific needs. They have the skills to negotiate insurance policy contracts and review relevant product disclosure statements.

Business Insurance Consulting offers a highly professional service for your business liaising with insurance companies, providing you with insurance quotes and can assist in finding you the right level of cover. If you have any enquiries regarding business insurance or to discover the optimum cover for your business contact Craig at Business Insurance Consulting today.

Business insurance coverage

Why Every Business Owner Should Have Business Insurance Coverage

by with 3 Comments Business

There are plenty of risks when it comes to running your own business. Accidents and incidents can happen from injuries to natural disasters. Having insurance to cover your business for unforeseen events is vital. 

Insurance is the optimum defence to protect your assets including business and personal. Here are important reasons why every business should consider business insurance cover. 

Maintain Your Reputation

Having adequate insurance cover can help to maintain your reputation in the business world. Professional indemnity insurance, liability insurance and workers compensation insurance can all contribute to being insured appropriately.

A business insurance consultant has the ability to assist you in deciphering the most beneficial insurance for your business needs. From the policy details to the terms and conditions a professional can analyse these factors and point you in the right direction when it comes to business insurance.

Prevent Cash Flow Loss

Cash flow is incredibly important for businesses to stay afloat during quieter periods. Something as small as machinery breakdown could impact your cash flow if your business doesn’t have access to the right insurance option. For small businesses, this business interruption could come as a major blow. 

For example, a plumber may incorrectly fix a pipe for a restaurant due to human error. If the restaurant is then forced to shut its doors for any period of time the plumber could be liable for any damages to the restaurant’s regular takings. This has the potential to ruin a business due to a genuine mistake. This only reinstates why business owners should seriously consider taking out business insurance.

Therefore finding an insurance company that offers relevant insurance for your personal business needs is key. In an adverse event, you will no longer need to utilise your business’ cash flow and can instead rely solely on your insurance cover. 

Ability To Survive If Disaster Strikes

In Australia alone, it is not uncommon to experience floods, bushfires and even storms. In the event of a natural disaster or incident, a business’ premises could be completely destroyed. That is why it is important to go through an insurance policy with a fine-tooth comb to make sure that you will be adequately covered if an incident were to occur. 

Digging into your own personal finances may not be practical in cases like these and there is always a chance of disaster striking again if you do. Therefore to be prepared and fully insured in the first place is the optimum scenario, to begin with.

Obtaining business insurance is dire to maintaining your reputation within your industry, preventing a loss of cash flow and recovering from disaster with minimal costs. There are plenty of cover options when it comes to business insurance and there is a policy to suit every business owner.

Finding the right business insurance for your needs doesn’t have to be a daunting experience. For more information about insurance cover for your business contact Craig at Business Insurance Consulting. With help from Craig, you will be able to make an informed decision and have peace of mind that you are covered for any unforeseen events.