Many businesses invest considerable time and effort to ensure the safety of their customers. But in the event that an accident does occur, what you do immediately afterwards is critical to achieving a positive and timely outcome for everyone involved. In this three-part series, Risksmartwill highlight three key steps businesses can take to be ready to respond effectively to an incident.
STEP 1: INCIDENT REPORTS
It is prudent for all businesses to complete an Incident Report in the event a member of the public suffers an injury or property damage from their business activities. Incident Reports should form the foundation of any business’ risk management procedures because Courts will consider these when assessing the liability of a defendant.
WHY ARE INCIDENT REPORTS IMPORTANT?
The importance of Incident Reports was emphasised in the recent case of Baker v Bunnings Group Limited  NSWDC 310, wherein a customer tripped and fell on a raised kerb as she traversed the carpark at Bunnings. In its decision, the District Court of NSW considered the Incident Report completed by Bunnings shortly after the incident. The Incident Report outlined that the area was inspected by staff and that it was free from slipping hazards. It also went on to outline there were no obstructions around the kerb.
The Court ultimately found in favour of Bunnings, concluding that the kerb presented an obvious tripping hazard to the claimant, which she ought to have avoided. Whilst the Court considered other evidence such as photographs and oral statements to reach their decision, this case demonstrates that Courts will carefully consider Incident Reports when investigating the facts of an incident and assessing the liability of a defendant.
CRITICAL INFORMATION TO CAPTURE
Incident Reports are designed to capture critical information pertaining to the incident. They should be completed as soon as possible after the incident to ensure that any relevant facts are not forgotten. Information in the Incident Report should be factual, accurate and objective – free from opinion and emotion.
REPORTS SHOULD INCLUDE THE FOLLOWING (AT THE VERY LEAST):
Date, time and location of the incident. It is helpful here to include a diagram or map detailing the exact location. Photographs should also be taken of the incident area (more on this later).
A detailed description of the incident as reported by the member of the public, including their alleged damage or injuries.
Visual observations of the incident area.
Name and contact details of all parties involved.
REPORTS SHOULD NOT INCLUDE:
An opinion on liability or a statement conceding that your business was responsible for or caused the incident.
Assumptions or inaccurate information about the events leading up to the incident or the incident itself.
Reference to any similar or prior incidents.
A final note
Risksmartcan utilise Incident Reports to track your long-term incident data, which can be used to identify trends in your business’ key risk areas and help prevent future incidents.
Feel free to contact Risksmart today to discuss how our Incident Reporting solutions can be tailored to your business.
After a year that has challenged us all in different ways, we wanted to close out 2020 with some heartfelt holiday cheer… with a Honan twist! So we asked some of the Honan team from each of our offices around the globe to share their holiday highlights (or mishaps)… and the responses (and outfits) are full of surprises.
We hope you enjoy it and from all of us at Honan, we wish you a safe, happy and healthy holiday season!
Honan has been working with Rip Swim for over two years, and in what began as a night-time swim many years ago for Founder and open water swimming coach – Grant Siedle, Rip Swim now offers Australia’s most original open water swimming events. We caught up with Grant to learn more about the iconic events and how far the business has come.
THE CRUX OF YOUR BUSINESS?
To give people an exciting and truly unforgettable open water swimming experience.
YOUR PARTNERSHIP WITH HONAN COMMENCED BACK IN 2018. TELL US A LITTLE ABOUT WHAT RIP SWIM LOOKED LIKE THEN VERSUS WHERE YOU ARE NOW.
The event has grown steadily throughout that time. We’ve now completed 6 seasons of swims and more than 450 swimmers have braved the crossing from Point Nepean to Point Lonsdale. We’re reaching a wider audience than ever before, including triathletes and adventure enthusiasts, as well as the traditional open water groups. We also have aByron Bay swimming trip coming up in April 2021!
AT HONAN, WE’RE ALWAYS INSPIRED BY BUSINESSES WHO ARE BRAVE ENOUGH TO DO THINGS A LITTLE DIFFERENTLY. TELL US SOMETHING UNEXPECTED OR TRULY DIFFERENT ABOUT YOUR BUSINESS.
The swim across “The Heads” at Port Phillip Bay was always considered illegal. We convinced the authorities that we could safely navigate our way across the shipping lanes (even though ships come in at the same time!) This feature is one of the many exciting elements in the event, and it’s quite an adrenaline rush!
A COMMITMENT TO ONGOING EVOLUTION IS A HALLMARK OF SOME OF THE MOST SUCCESSFUL BUSINESSES TODAY. WHAT DOES EVOLUTION LOOK LIKE/MEAN TO YOUR BUSINESS?
Every year we seek to improve our safety and streamline the entry, training and team selection process. This is a team event, so making sure everyone is working together is critical to our success.
YOU’RE A HIGHLY EXPERIENCED PRO-SWIMMER AND COACH, DO YOU THINK A HIGH-PERFORMANCE MINDSET STANDS YOU IN GOOD STEAD IN THE BUSINESS WORLD/IN SEEKING OUT NEW CHALLENGES?
Having completed several very long swims, many triathlons and surf life-saving races has given me specific knowledge about how to take on these sorts of projects. The discipline of training does help in business, but I believe it is more about having a strong vision and not worrying about the setbacks along the way.
AT HONAN, MAINTAINING QUALITY CONNECTIONS WITH OUR PEOPLE, PARTNERS AND THE COMMUNITY SITS AT THE HEART OF WHAT WE DO. WHAT RELATIONSHIPS & CONNECTIONS HAVE BEEN CRITICAL TO YOUR BUSINESS SUCCESS IN RECENT YEARS?
Having a loyal sponsor in Honan helps from both a financial perspective and from a confidence perspective. Knowing that a larger organisation (particularly one that works in the area of risk) will stand alongside you reinforces that what you are doing is well-executed and worthwhile.
YOU HAVE A PERFECT TRACK RECORD, BUT OPEN WATER SWIMMING NATURALLY HAS ITS RISKS! HOW HAS HONAN HAS SUPPORTED YOUR BUSINESS OVER THE TIME WE’VE BEEN WORKING TOGETHER?
Providing our Public Liability is the main factor here. The process of putting that in place involves working through a detailed plan and each year, we seek to streamline that plan as we talk with the team at Honan.
WHAT ARE YOU MOST EXCITED ABOUT FOR THE BUSINESSOVER THE NEXT 6-12 MONTHS?
After the lockdown of 2020, I’m eager to see the increase in popularity of outdoor and adventure-related events. So far we’ve seen a lot of demand. I am also very excited about a swim we are likely to be running for teenagers from the Anglesea Lifesaving Club. This is a very positive initiative to engage younger people and encourage them to stay involved in lifesaving.
“Work hard, have fun, make history” – Jeff Bezos (Amazon founder).
Tell us about yourself
My first role at Honan was as the Financial Accountant back in 2012, meaning I was an accountant in my former life. In 2016 I moved to broking and have enjoyed it ever since. I am constantly meeting new people and gaining further understanding of my clients’ businesses. The fast pace of broking means every day is different. Outside of work, I am trying to catch up with family and friends…or most likely watching too much sport on the couch!
What does the Head of Global & Networks do?
My role has three key components:
Placement of new business for clients locally, as well as inbound referrals from overseas
Servicing our portfolio of clients and building relationships with our global networks, including the Worldwide Broker Network (WBN)
Managing the Global team at Honan to continue providing our clients and our overseas partner brokers a truly market-leading service.
What are 3 things you find most motivating about your role?
Understanding what makes our clients tick
Finding the right insurance solution for each of our clients
Working with a young and vibrant team.
Biggest learning from your time at Honan?
To fully engage with the people and resources available both at Honan and our partner brokers overseas. It is important to share ideas, identify past problems and develop future-focused solutions.
Your core focus for the year ahead?
I believe our clients will continue to ask to be further educated on the state of the market and the mechanisms that drive premiums and limits etc. We will be be providing that material regularly (via webinars, Thought Leadership publications, and LinkedIn updates) to help our clients have meaningful discussions within their own organisations about the insurance landscape.
Recommended further reading / a great online resource?
I know it’s a bit of a cliché, but I still read the Australian Financial Review (AFR) every day. It’s the best daily update on what’s happening in the economy and how it’s affecting our clients.
Alongside the promise of annual leave and great escapes, Australia’s long hot summer marks the height of natural disaster season – a notoriously stressful time for many business owners across the country. While the potential wrath of Mother Nature can leave us feeling powerless at times, significant steps can be taken by business leaders to mitigate the potential impacts to their operations, bottom line, and indeed livelihoods, in the event of a disaster. In the following piece, we’ll explore the two fundamentals for natural disaster risk-minimisation:
Physical risk protection through mitigation
Ensuring a comprehensive, truly ‘catastrophe-fit’ insurance program is in place.
PHYSICAL RISK PROTECTION VIA MITIGATION
Businesses can take the following preventative steps to ensure their physical assets are protected as much as possible in the face of disaster:
Ensure all buildings, plant and equipment (including surroundings) are adequately insured for their replacement* value
Keep sites clean, with flammable materials stored off-site
Where possible, construct premises from fire-resistant materials
Assess business interruption exposures to key customers and suppliers in the event of bushfire.
Have a cyclone emergency plan in place and familiarise your entire staff with the plan
Regularly monitor weather and associated alerts
Back up all electronic files
Secure all stock and equipment indoors if currently outdoors
Have a business continuity plan in place.
STORMS / FLOODING
Ensure your building(s) and surrounding properties are in a good state of repair
If possible, have alternative (backup) power sources available such as generators
If situated in a flood prone area, ensure stock / raw materials are stored at height
Secure all loose items indoors
Source an adequate number of sandbags (if more permanent flood barriers are not an option) for use in the case of emergency.
ENSURE A TRULY ‘CATASTROPHE-FIT’ INSURANCE PROGRAM IS IN PLACE
In the event disaster strikes, having a robust, ‘catastrophe-fit’ insurance program in place is critical to ensuring business continuity interruptions and implications are minimised. Strong insurance programs will cover off the following four pillars:
1. RISK SURVEY & ASSESSMENT
It is recommended that clients look to conduct a detailed risk survey of their key operating or business critical sites. These are typically completed either by a qualified risk engineer who will identify and qualify certain vulnerabilities that may exist within a business, as well assessing:
The likelihood of these hazards causing a loss
The severity of a loss incurred by such hazards
The effectiveness of existing controls within the business to mitigate these hazards.
In some cases, existing controls do not completely mitigate identified losses, meaning additional levels of protection are needed. For instance:
Improved fire protection
Hot / cold working permits
Introduction of business continuity plans.
Risk surveys will typically cover off:
Hazards (natural, man-made or operational)
Construction materials used
Existing levels of risk management.
Additionally, a risk survey will set out a number of recommendations (to mitigate risks) in an implementation plan.
2. ACCURATE & UP-TO-DATE PROPERTY VALUATION(S)
According to the Insurance Council of Australia, many properties destroyed in the summer bushfires earlier this year were underinsured, meaning they had cover but inadequate levels to replace or rebuild what was lost. Having accurate and current valuations of your buildings, plant, equipment, and stock will help businesses to ensure they’re adequately covered for their repair and / or replacement in the event of a loss.
*Being underinsured can bring about financial hardship and a shortfall in cash flow. Thus, understanding the costs to replace all critical items of your business versus the original written or purchase value is imperative. Any capital expenditures (CAPEX) should also be taken into account when considering replacement costs of business assets.
3. BUSINESS INTERRUPTION (BI) REVIEW
Similar to a valuation of the business’ physical assets, a Business Interruption (BI) review focuses on the financial impact (profit or revenue) of the business and its ability to return to a pre-loss position following an event. Regardless of whether a business is affected directly, indirect losses can arise as a consequence of large-scale catastrophes, therefore understanding what exposures exist is vital. A BI review will assess factors such as:
Adequacy of current indemnity periods and whether they align to plant rebuild timeframes
Alternative location(s) to conduct business or source raw materials
Scenario-test existing scope and levels of cover
Exposure to key customers and suppliers
Ensure base cover adequately protects the business.
4. IN-DEPTH POLICY ANALYSIS
As businesses grow and expand, so too does their direct and indirect footprint. An in-depth insurance program review by your broker will help ensure all required policies are in place, and adequate for the protection of the business. This analysis will also uncover any uninsured risks or perils that may be excluded or limits/sub-limits that require adjustment. This review should be completed in conjunction with the output from risk assessments, valuations and business continuity plans.
IN THE EVENT OF A DISASTER…CALL YOUR BROKER!
Despite having minimised all physical risks, damage incurred by natural catastrophe is unavoidable. In the immediate aftermath of a bushfire, cyclone, storm or flooding, business owners should call their broker ASAP, and take the following steps:
Arrange for a contractor to undertake an ‘emergency make-safe’. This involves temporary repairs to ensure the property is watertight and to minimise/prevent further damage. If you’re unsure who to call, try the SES for emergency assistance.
If water has entered the property, do not switch on the electricity until an electrician has undertaken checks.
Avoid black water – this is unsafe, contaminated water and must be left to experts.
Dry out wet areas – contact a restoration expert to extract water and commence the drying process (i.e. removal of wet carpets and installation of blowers, dehumidifiers).
Prepare an itemised list of damage and take photographs to support your claims process.
Dispose of spoilt and destroyed items. Again, it’s important to take photographs.
Keep any items that can be repaired. If in doubt, speak to your broker.
Obtain quotes to repair damaged items, which will help in the claims process too.
WE’RE WITH YOU ALL THE WAY
To learn how Honan can support you in protecting your business, people and operations ahead of a potential natural disaster, please reach out at any time.
Uncertainties in the property market brought about by COVID-19 have prompted many home owners to take a detailed look at their insurance policies, often for the first time. It’s usually not until a disaster occurs (e.g. a fire, storm or cyclone) that people realise they don’t have adequate cover. Underinsurance is an area often overlooked by property owners, but it has the potential to cause severe financial hardship if you need to make a claim. In this article, we’ll explain how this common issue occurs and what you can do to avoid it.
The Insured has undervalued their property replacement value by 50%. If they suffer a claimable loss, the Insurer can limit the settlement payable under the policy.
Full Replacement Value of your property = $1,000,000 Sum Insured under your policy = $500,000 Value of claim = $100,000 Amount payable by the insurer as a result of the application of the ‘Average’/’Co-Insurance’ clause (i.e. 50%) = $50,000
WHY IS UNDERINSURANCE SO COMMON?
For most policy holders, this issue stems from a lack of information, rather than an intentional reduction in cover to save money on their premium. One of the most common causes of underinsurance is inaccurate building sum insured estimations, based on incorrect information such as initial building costs or using the market value of the property. For example, many insurance policy holders neglect to estimate on all components that are required when rebuilding a house. Often, the estimations do not consider the higher cost of building materials when compared with the original build and the additional services required for a total rebuild, including demolition costs and architectural fees.
HOW CAN WE HELP?
Whether you have an existing policy, or you are looking to secure insurance, Honan recommends seeking an independent valuation of your property to ensure you’re covered for the correct amount. A property owner can also use an insurance calculator for a desktop estimation. The Insurance Council suggests policy holders can review their property on a room-by-room basis to assess their contents and use an insurance calculator to estimate the building sum insured amount. The insurance calculator is an estimate and is not intended to replace a professional valuation. Please feel free to reach out, Honan can refer you to our partnered valuers / quantity surveyors to assist you with this process.
Risksmart is a subsidiary of Honan, providing specialised end-to-end claims management services for local and international businesses and insurers.
The team is comprised of both qualified lawyers and highly experienced insurance specialists. We caught up with Risksmart to learn what inspires them and sets them apart as a team.
THE CRUX OF WHY THE TEAM EXISTS?
We take the stress and resource drain out of claims, allowing our clients to get back to business.
A QUOTE TO CAPTURE THE TEAM’S ETHOS
“I’m not afraid, To take a stand, Everybody, Come take my hand. We’ll walk this road together, through the storm. Whatever weather, cold or warm.” EMINEM
We are with our clients…all the way.
IF YOU WERE A SPORTS TEAM, WHAT WOULD YOU BE CALLED?
Risksmart Rattlesnakes. Tssss.
GIVE A SHOUTOUT TO ONE CLIENT / CUSTOMER YOUR TEAM IS PARTICULARLY INSPIRED BY RIGHT NOW, AND WHY?
It’s hard to pick just one client as so many have inspired us with remarkable resilience during the pandemic, but if we have to select one…. we are always impressed by the innovation of ALDI Stores. We’re particularly inspired by their ongoing commitment to sustainability and environmental impact. It’s a critical issue and they are leading the way.
REFLECTING ON THE YEAR TO DATE, HIT US WITH YOUR TEAM’S TOP 3 HEADLINES
We launched our new website and re-brand!
Helping our clients change their risk management practices to stay resilient during COVID-19
Learning that we can stay productive and connected while we are apart
HONAN’S ‘WITH YOU ALL THE WAY’ BRAND PROMISE IS ONE WE’RE PROUD TO HONOUR IN BOTH OUR DEALINGS WITH CLIENTS, BUT INTERNALLY ACROSS THE BUSINESS TOO. WHAT DOES ‘WITH YOU ALL THE WAY’ LOOK LIKE WITHIN YOUR TEAM? HOW DO YOU SUPPORT EACH OTHER THROUGH CHALLENGES AND WINS ALIKE?
The team banter is excellent! We share tips and views on claims strategy and celebrate each other’s wins – often combined with discussions about the best place to get dumplings and speculating about the weather for the weekend.
IF YOU COULD PICK ONE BRILLIANT PERSON – DEAD OR ALIVE – TO JOIN YOUR TEAM, WHO WOULD IT BE AND WHY?
Robin Williams. Brilliance, wit and humour.
“No matter what people tell you, words and ideas can change the world” – Robin Williams.
LOOKING AHEAD, WHAT IS YOUR TEAM MOST LOOKING FORWARD TO OVER THE NEXT 6-12 MONTHS?
Working with new clients, getting back into the office, and eventually seeing our clients face-to-face without a computer screen in the way! We will also be watching the outcome of the AFCA BI test case. We might have to start up a sports team too – who can let a name like Risksmart Rattlesnakes go to waste?
The summer of 2019/2020 brought with it some of the worst bushfires and hailstorms I have ever experienced as a manager for personal clients. Events such as these have significant impacts, even with the very best insurance policy in place. As I say to my clients, risk mitigation is key and actions can be taken to reduce the physical risks posed by these occurrences. Following these very basic steps can assist greatly in preventing or minimising losses.
BASIC HOME MAINTENANCE IS VITAL
Stormwater ingress is more likely to impact you during heavy rain events if your gutters and downpipes are blocked with leaves and debris. Ensuring these are both free from obstruction will limit stormwater build up, back fill and flooding through your roof cavity. If you live in a leafy suburb, gutter guards are a great option to consider.
Further to this, check your roof and windows are in good condition on a regular basis. Your home’s roof and windows are the only barrier between you and the elements. Melbourne in particular has experienced extreme hail events in the last 18 months – I would highly encourage any clients that have not engaged in roof maintenance over the last 2 years do so before the upcoming storm season. Small holes, cracks and deterioration in roofing or windows can lead to stormwater ingress over time (which can cause mould issues) or during heavy rainfall events.
ATTEND TO IMMEDIATE RISKS
Whether you live in the suburbs or in regional areas, removing imposing risks near your home or permanent structures (such as sheds and fencing) is important. Here are some considerations:
trim back any trees that may be too close or hanging over your home and structures
ensure you have adequate clearance around your property (if you are in a bushfire area)
remove any debris that may be a fire risk
store outdoor furniture and other items (e.g. BBQs) in a safe place, such as an undercover area or pack them away if not in regular use.
PREPARE FOR FLOODING
Flash flooding has become a much more common occurrence in metropolitan areas over the last decade. I would always encourage individuals to speak to their brokers to find out if their home is a pluvial flood risk. Homeowners who may be at risk of flash flooding can prepare for these events by:
storing sandbags in their garage for a worst-case scenario situation.
ensuring there is adequate drainage and flood protection measures (dual sump pumps, adequate waterproofing) in low lying areas of your home such as basements and cellars
checking all contents in low lying areas (e.g. basements and cellars) are stored off the ground.
PROTECT YOUR VEHICLE
It might make for great viewing on the news but do not attempt to drive through flood waters. In the event of extreme weather forecasts, I would encourage those living in apartments or complexes with car stackers to move their car to a covered multilevel carpark above ground.
AND LASTLY, TALK TO YOUR BROKER!
Your Insurance Manager has a wealth of knowledge when it comes to risk mitigation and can often engage with the relevant Risk Mangers at insurance companies if you have particular areas of concern.
Engaging with your insurance broker about any renovations (in progress, completed or planned) as well as improvements made to your property (e.g. solar panels, a new shed, fencing or the addition of a rare outdoor sculpture) is imperative in ensuring that the right insurance program is in place for you if something does go wrong.
WE’RE WITH YOU ALL THE WAY
Feel free to reach out to discuss your situation at any time – we’d love to hear from you.
Honan has been working with Australia’s Catapult for over 10 years. Now ASX listed, Catapult is one of the leading wearable technology companies in the world. We caught up with Boden Westover, VP Brand & Communications, to learn a little more about the brand, and how far they’ve come since 2006.
THE CRUX OF YOUR BUSINESS?
Our mission is to offer the most comprehensive set of solutions for teams and athletes to improve performance.
YOUR PARTNERSHIP WITH HONAN COMMENCED BACK IN 2008. TELL US A LITTLE ABOUT WHAT CATAPULT LOOKED LIKE THEN VERSUS WHERE YOU ARE NOW.
Founded in 2006, Catapult was only a five-person business in a windowless accelerator office when we first engaged Honan in 2008. Based in Scoresby (Melbourne), we had no overseas presence, and really no competitors having commercialised world-first GPS-based wearable technology for elite sports teams in late 2006. Catapult was listed on the ASX in 2014 and now boasts a team of 350 staff working in over 100 cities worldwide. We serve over 3,200 sports organisations in 40 sports across 139 countries, with annual revenue over $100m.
AT HONAN, SUPPORTING INNOVATIVE AUSSIE BRANDS ACHIEVING RAPID GROWTH AND INTERNATIONAL ACCLAIM IS ONE OF THE GREATEST PRIVILEGES OF OUR WORK. REFLECTING ON THE DECADE 2010-2020, HIT US WITH YOUR TOP 5 MILESTONES.
We have about a dozen league-wide deals with sporting competitions around the world, so any time we bring on an entire league (rather than an individual team) it’s considered a milestone as it helps us shut out competition and provide value to the teams within the league in a more scalable way. Our first league-wide deal was in 2015 with the AFL, followed closely by La Liga (Argentinian basketball competition).
Our Boston-based CEO, Will Lopes, joined the business in November 2019 and has already had an enormous impact on the strategic direction of the business. Will led our transition from a product-led business, to a solution- and customer-led one.
In 2015, Fast Company named us the most innovative company in the world in both “Fitness” and “Big Data”, and the 12th most innovative company in the world – ahead of Netflix, Tesla, and Samsung. In 2019, we were the fifth most innovative company in “Sport”.
In 2016, we acquired XOS Digital, the North American leader in video analysis technology, and PlayerTek, a GPS wearable technology engineered for amateur teams, at the same time.
We launched our first consumer business in mid-2018, PLAYR, which is a dedicated wearable technology product for individual soccer players.
WHAT ARE THE TOP 3 TRENDS IMPACTING YOUR BUSINESS RIGHT NOW?
LOAD MANAGEMENT – controlling how much physical stress professional athletes endure during competition.
COMPUTER VISION – the interplay between wearable technology and video analysis for elite sport.
PLATFORM / MARKETPLACE – the consolidation of the elite sports technology industry, with a couple of heavyweights owning the distribution channels.
AT HONAN, MAINTAINING QUALITY CONNECTIONS WITH OUR PEOPLE, PARTNERS AND THE COMMUNITY SITS AT THE HEART OF WHAT WE DO. WHAT RELATIONSHIPS & CONNECTIONS HAVE BEEN CRITICAL TO YOUR BUSINESS SUCCESS IN RECENT YEARS?
Catapult is a customer-obsessed organisation that places a lot of importance on our relationships with athletes, coaches, and management within sporting organisations. We seek to empower every athlete and team on earth with technology to perform at their best.
WHAT’S ONE PIECE OF ADVICE OR QUOTE THE CATAPULT TEAM CAN SHARE WITH AUSSIE STARTUPS CURRENTLY WRANGLING THEIR FORMATIVE YEARS?
James Demetriou from theAustralian Sports Technologies Network (ASTN) says it best when he tells new Australian start-ups to “go global or die local”. Yes, growing pains can escalate when you venture overseas, especially if you do so too early, but don’t wait until you’re “ready” to form a presence overseas. Take the leap.
WITH YOU ALL THE WAY
From freshly founded side-hustle, to publicly listed multinational, Honan is ready to support organisations of all shapes and sizes. To find out how we can help your people and business, please contact us at any time.
Earlier this year, the Insurance Council of Australia and Australian Financial Complaints Authority launched a court case to resolve the uncertainty of pandemic exclusions in policy wordings, following the rejection of multiple Business Interruption claims brought by policyholders as a result of COVID-19.
The case involved two claims brought separately by policyholders Austin Tourist Park in Tamworth and the Thrive Health & Nutrition Store in Melbourne under policies with HDI Global (HDI) and The Hollard Insurance Company (Hollard) respectively.
The decision was handed down on 18th November 2020 in favour of the policyholders. Five sitting judges of the NSW Court of Appeal all determined that, though with varying reasoning:
COVID-19 is not a disease declared to be quarantinable under the Quarantine Act 1908 (Cth) since that Act was repealed on 16/12/2016, long before COVID-19 was listed as a human disease;
the Biosecurity Act 2015 (Cth) was a separate Act and therefore was not a “subsequent amendment”;
the Plaintiff insurer’s policy wordings did not refer to the Biosecurity Act; and
the references in the Plaintiff insurer’s policies to Quarantine Act were not an obvious mistake capable of rectification.
HDI and Hollard were granted leave to apply directly to the Court of Appeal for declarations that the exclusion clauses in their respective policies applied to COVID-19, in that the exclusion applied to any loss arising from diseases declared to be quarantinable diseases under the Quarantine Act, and were to be read as including diseases determined to be listed as human diseases under the Biosecurity Act.
Both the HDI and Hollard policies contained an additional benefit which provided limited cover where there was no property damage, which otherwise is a standard prerequisite to claim under property damage policies.
The HDI policy deems the occurrence of specified events to constitute “damage to property used by” the insured at the insured location with the result that interruption or interference with the business happening in consequence of such an occurrence is covered. Those events include:
3. The outbreak of a notifiable human infection or contagious disease occurring within a 20 kilometre radius of the location;…
The cover provided under part (1) and (3) of this Additional benefit does not apply to any circumstances involving ‘Highly Pathogenic Avian Influenza in Humans’ or other diseases declared to be quarantinable diseases under the Australian Quarantine Act 1908 and subsequent amendments.
The Hollard policy provided that it “…..will cover You for interruption to or interference with Your Business due to”:
….(b) an outbreak of an infectious or contagious human disease occurring within a 20 kilometre radius of the Premises, however there is no cover for highly pathogenic Avian Influenza or any other diseases declared to be quarantinable under the Quarantine Act 1908 (Cth) and subsequent amendments irrespective of whether discovered at the premises, or out-breaking elsewhere.
WHAT DOES THIS MEAN FOR YOU?
Importantly, there is now a solid precedent to argue for coverage of COVID-19 business interruption claims on behalf of our policyholders. This case will be used to challenge insurers’ reliance on the quarantine exclusion if the policy wording references diseases under the Quarantine Act alone, with no reference to the Biosecurity Act 2015 [Cth].
However, there are a few caveats to the above. The decision can be relied upon in NSW but is not as authoritative in other states and territories where it would be used as a guide only. In addition, coverage will be subject to a number of considerations, including the policy providing the additional benefit of cover, sufficient evidence the loss suffered arises from COVID-19, and other policy terms and conditions. Each claim will be assessed on its merits and the construction of the relevant insurance policy.
It is very likely that the insurer Plaintiffs will seek special leave of the High Court of Australia to appeal the decision.
The High Court will consider the application for leave to appeal in matters where new points of law are raised; of high public or general importance; involve questions of law that have been decided inconsistently; or involve administration of justice which requires consideration by the High Court.
If the High Court allows and then hears the appeal, they may quash the decision of the Court of Appeal, or uphold it, or uphold only parts of it.
The insurer Plaintiffs will have 28 days to file the special leave application.
WHAT SHOULD YOU DO?
There is no need to take immediate action as your Honan broker will contact you to discuss your policy coverage, your loss circumstances, and the next steps in making a possible claim.