- YOUR DUTY OF DISCLOSURE
- PUBLIC LIABILITY INSURANCE
- UTMOST GOOD FAITH
- AVERAGE OR CO-INSURANCE
- AVERAGE/CO-INSURANCE BUSINESS INTERRUPTION POLICIES
- SUBROGATION AND/OR HOLD HARMLESS AGREEMENTS
- UNNAMED PARTIES
- CLAIMS MADE DURING THE PERIOD OF INSURANCE
- CLAIMS OCCURRING PRIOR TO COMMENCEMENT
- NOT A RENEWABLE CONTRACT
- LEASING, HIRING AND BORROWING PROPERTY
- CHANGES AND DEVELOPMENTS
- NEW BUILDINGS AND ALTERATIONS
- MOTOR VEHICLES
- TRAVELLING HERE OR OVERSEAS
In relation to policies which are not governed by the Insurance Contracts Act 1984 such as Marine Insurance (other than Marine Inland Transit Insurance) and insurance required by statute, the Insured still owes a Duty of Disclosure to the Insurer. This is a duty to disclose to the Insurer before the contract is concluded, every material circumstance which is known to the Insured. Every circumstance is material which would influence the judgment of a prudent Insurer in fixing the premium or determining whether he will take the risk.
The Insurer may avoid the contract from inception if the Insured fails to make such disclosure. In the case of insurance required by statute, such as Compulsory Third Party Motor Vehicle insurance, the Insurer may have rights of recovery against the Insured in the event of misrepresentation, misstatement or non-disclosure. Before you enter into a contract of general insurance with an insurer, you have a duty, under the Insurance contracts Act 1984, to disclose to the insurer every matter that you know, or could reasonably be expected to know, is relevant to the insurer’s decision whether to accept the risk of the insurance and, if so, on what terms. You have the same duty to disclose those matters to the insurer before you renew, extend, vary or reinstate a contract of general insurance.Your duty however does not require disclosure of matters;That diminish the risk to be undertaken by the insurer,That is of common knowledge,That your insurer knows or, in the ordinary course of his business, ought to know,As to which compliance with your duty is waived by the insurer.
Non-DisclosureIf you fail to comply with your duty of disclosure, the insurer may be entitled to reduce his liability under the contract in respect of a claim or may cancel the contract. If your non-disclosure is fraudulent, the insurer may also have the option of avoiding the contract from it’s beginning.
Where Public Liability Insurance is the subject matter or part thereof of the schedule of cover outlined, the contract is on a claims occurring basis and not a claims made basis. Should the subject matter of this insurance be Professional Indemnity Insurance, the contract will be on a claims made basis and not a claims occurring basis.
Every contract of insurance is subject to the doctrine of utmost good faith which requires that the parties to the contract should act toward each other with the utmost good faith. Failure to do so on your part may prejudice any claim or the continuation of cover provided by Insurers.
Some policies contain an Average/Co-Insurance clause which means that you must insure for the full insurable value of the property insured. If you under-insure, your claim may be reduced in proportion to the amount of the under-insurance. A simple example, illustrating the basic principle, application and effect of the Average/Co-Insurance clause is as follows:
|Full (Replacement) Value||$1,000,000 |
|Sum Insured||$ 500,00|
Therefore you would be self insured for 50% of the full value
|Amount of claim say ||$ 100,000 |
|Amount payable by Insurers as a result of |
the application of Average/Co-Insurance
(being 50% of the $100,000)
|$ 50,000 |
Some policies contain an Average/Co-Insurance clause which is fully set out in the Basis of Cover or Policy Specification of the policy. For the types of cover most usually provided, the Average/Co-Insurance calculation is arrived at by applying the Rate of Gross Profit, Revenue or Rentals (as applicable) to the Annual Turnover, Revenue or Rentals (as applicable; these factors first being appropriately adjusted as provided for in the Trend of Business or Other Circumstances clauses. If you are in any doubt regarding this clause insofar as it applies to your policy, please contact your Account Manager for assistance.
You may prejudice your rights with regard to a claim if, without prior agreement from your Insurers, you make any agreement with a third party that will prevent the Insurer from recovering the loss from that, or another party who would be otherwise liable. Some policies contain provisions that either exclude the Insurer from liability, or reduce its’ liability. If you have entered into any agreements that exclude or limit your rights to recover damages from another party in relations to any loss, damage or destruction that is the subject of a claim under the policy. Examples of such agreements are the hold harmless clauses which are often found in leases, in maintenance or supply contracts from burglar alarm or fire protection installers and in repair contracts. If you are in doubt please consult your Account Manager.
If you require the interest of a party other than the Named Insured to be covered, you MUST request this. Most policy conditions will exclude indemnity to other parties (eg. Mortgagees, lessors, principals etc) unless their interest is properly noted on the policy.
Some policies provide cover on a claims made basis which means that claims first advised to you (or made against you) and reported to your insurer during the Period of Insurance are recoverable irrespective of when the incident causing the claim occurred, subject to the provisions of any clause relating to a retroactive date. You should also note that, in terms of the provisions of Section 40(3) of the Insurance Contract Act 1984, where you give notice in writing to the Insurer of facts that might give rise to a claim against you as soon as is reasonably practicable after you become aware of those facts (but before the insurance cover provided by the contract expires) then the Insurer is not relieved of liability under the contract in respect of the claim, when made, by reason only that it was made after the expiration of the Period of Insurance cover provided by the contract. In order to ensure that any entitlement under the policy is protected, you must therefore report all incidents that may give rise to a claim against you to the Insurers, without delay after such incidents come to your attention and prior to the expiration of the policy period.
Generally policies do not provide indemnity in respect of events that occurred PRIOR to commencement of the contract.
Cover under your policies terminates on the date shown in your tax invoice or adjustment note.Policies such as Professional Indemnity, Errors & Omission, and Directors & Officers are not renewable contracts. If you wish to effect similar insurance for any subsequent period, it will be necessary for you to complete a new proposal prior to the termination of the current policy so that terms of insurance and premium quotations can then be developed for your consideration
When you lease, hire or borrow property, make sure that the contract clearly identifies who is responsible to insure the property. This will help avoid arguments after a loss and ensure that any claims are efficiently processed. Your Industrial Special Risks policy automatically covers property you are responsible to insure, subject to the policy deductible. The decision as to who should insure the property is not left to your discretion. If the responsibility to insure lies with the owner, we recommend you try to ensure the lease or hire conditions waive any rights of recovery against you, even when the damage is due to your negligence. This will prevent the owner’s Insurer making a recovery against you. If there are no lease or hire conditions, you should write to the owner asking who is to insure the property.
Your Insurance Programme will be prepared in accordance with your instructions from known information about your business activities at a certain date. Changes and developments may occur which could have a bearing on the efficacy of your insurances. The following list should be used a s guide to areas or activity which should be notified to Insurance Brokers Australia immediately they are proposed or occur so that steps can be taken to ensure your organisation remains adequately protected. It is not exhaustive, so when in doubt please contact Insurance Brokers Australia for guidance:
- Acquisition of new subsidiaries, mergers or joint ventures in which you are involved in Australia or elsewhere
- Acquisition, construction or occupancy of new premises, alteration, vacation, temporary unoccupancy, extension or demolition of existing premises.
- Increases in value in excess of policy limits for buildings, plant, machinery or stock (whether due to acquisition, economic inflation or exchange rate fluctuation).
- Alterations to or disconnection of fire or burglary protection systems.
- Contractual liabilities assumed and legal rights contractually relinquished or diminished, any contracts which impose onerous conditions.
- Changes in processes, occupancy or products and extensions of business operations, including new products or processes.-Hiring, leasing or borrowing of plant, equipment, or motor vehicles.
- Acquisition of pressure vessels, lifting equipment or other substantial equipment.
- Movements of stock or equipment or vehicles to new locations.
- Charter or operation of aircraft or waterborne craft
- External Funding mortgages or other borrowings which create insurable interest of third parties in insured property.
- Foreign trade and travel developments involving exposures beyond Australia, overseas acquisitions, export of products or movement of directors or staff.
Details of any new building or alteration work should be advised during the planning stage to enable Insurance Brokers Australia to advise on: A sound and economical approach to construction insurance from your standpoint. Appropriate indemnity and insurance clauses to be incorporated in the contract for your protection.Standards of fire protection, safety and security. Financial loss exposures if completion of the new building or alteration work is delayed to determine your need for Advance Business Interruption insurance.
Details to be collected by you in written form and passed on to Insurance Brokers Australia at policy commencement, renewal, and periodic change during the policy term/year should include:
- Driving and traffic infringement history of any existing or new driver for commercial or business or private use vehicles
- Alteration of use or garaging
- Drivers under 25 years
- Policies that are restricted to Nominated Drivers or Drivers 25 years or older, or as endorsed by Insurer’s in their policy.
- Read the policy carefully to make sure you are aware of any excess and where it may apply.
- Ensure that any medical cover is adequate for possible expenses in the country you are going to visit. In regions such as North America, Europe, Africa and some parts of Asia medical costs can be very expensive.
- Ensure you declare any pre-existing medical conditions you may have.
Generally, cover for luggage and personal belongings will be limited. It is important to know the total amount of cover along with any per-item limit that may apply to any expensive items you may wish to cover, such as cameras, laptops and/or jewellery.
Credit Card Insurance
Some financial institutions provide travel insurance as part of their credit card service to their customers. It is important to read your credit card provider’s policy and the Product Disclosure Statement carefully to determine the extent of the coverage provided by this policy and whether certain eligibility requirements need to be met.
Like most insurance policies there are standard general exclusions on most types of travel insurance policies. These can include acts of civil unrest, self inflicted injury, loss/theft of unattended baggage, loss/theft of cash and pre-existing medical conditions.
Travel insurance policies may not also cover dangerous or extreme activity, such as snowboarding or surfing. Most extreme activities require an additional premium. It is also important to note that most dangerous activities may be classified as general exclusions in most policies and could include activities involving the use of an artificial breathing apparatus.
Prior to Travelling
It is important to review any special travel advisories issued at www.smartraveller.gov.au prior to booking your trip or travelling. Most policies do not cover cancellation as a result of government prohibiting travel to a particular destination or changing a travel advice.