Key takeaways:

  • Professional indemnity (PI) insurance is vital for anyone who provides professional services or advice to clients in exchange for a fee.
  • PI is a wide-ranging insurance claim solution that protects individuals against legal costs and claims for damages due to an error or act of omission throughout the course of business. Basically, it is cover that protects you and your business if you “fail to present work to a professional standard"
  • PI is mandatory in some industries, such as medicine, accounting, law, engineering, real estate, photography, building, marketing, architecture or finance.
  • Check the ‘sunset clause’ in your policy – this part of the contract states a specified period of time in which a claim can be lodged after a policy has expired.

Have you ever questioned whether you really need PI cover? Unless you have endless disposable income or you can predict the future, then this cover is vital should you or your employees provide professional advice to your customers or clients.

In our blame-culture society, professional indemnity insurance becomes a crucial component in helping protect consultants, directors, or owners of a business against claims of professional misconduct, malpractice, errors or omissions, and breach of contract.

 

What could lead to a claim?

Without PI cover, such claims can end up having devastating affects on your business or even cripple it altogether. It not only puts your business at risk either. Your personal assets, such as your house, can be affected, as well as the people you work with, including partners, employees and volunteers.

The greatest value in a PI policy is the cover against legal defence costs.

Even if you pride yourself on meticulous work, there's a chance you could still be sued unfairly by a client who is merely dissatisfied. Even though they might have no valid claim, the allegation could still involve you in substantial legal costs and non-productive time.

Whether you're found liable or not, if a claim is brought against you, a PI policy will be able to pay for all of your legal costs to defend that action.

A professional indemnity policy can save you from personal bankruptcy or permanent closure of your business.

 

 

A few things to consider...

What does “claims-made” mean (aka a ‘sunset clause’)?

One particular topic that most policyholders may not be aware of is something called a “sunset clause.” A sunset clause is part of your insurance policy that is related to the time limit in which your client is able to make a claim and be considered for coverage.

For example, let’s say your professional indemnity policy was effective 1st Aug 2020 and expires 1st Aug 2021, and has a 2year sunset clause. So, if a latent “defect” on your work performed sometime between 1st Aug 2020 to 1st Aug 2021 is not discovered until 2nd Aug 2023 (2 years and 1 day after expiration) or later, then your policy won’t cover you.

 

What's the difference between Public Liability and Professional Indemnity?

Public liability insurance covers compensation claims if you’re sued by a member of the public for injury or damage, while professional indemnity insurance covers compensation claims if you’re sued by a client for a mistake that you make in your work.

However, neither policy will provide cover for intentional or dishonest acts.

Professional Indemnity in practice...

Example: A landscape architecture firm is sued by their client for the costs of rectifying an extension built from a flawed design. The PI policy reacts and the insurer pays out $50,000.

Example: A customer purchases the plants you have recommended and later discovers that they have an aggressive root system and are destroying underground pipes and the foundations. There would likely be a large claim for the rectification work and replacement of the plants for which you would be held responsible.

Similarly, if a landscaper followed your design plans and it is later discovered that insufficient drainage was incorporated into the plans, you as the designer would be held responsible for the customer’s flooded premises; not the landscaper.

Example: A construction company discovers a fault in the plans, and the building then needs to be demolished and rebuilt from scratch. The property developer sues for $500,000 in damages due to loss of income and value of business. The PI policy reacts and pays out the $500k in full.

Mistakes can (and do) happen in every line of business. Professional indemnity insurance means peace of mind for you and your clients if things don't go exactly to plan. You work hard to provide the best service you can and that’s what your clients expect, so don't let a silly mistake define your business. Make sure you have the right cover in place so you can keep moving and focus on doing what you do best.

COVID 2020 - a thank you to the transport industry.

From all of us at Midland Insurance Brokers, we wanted to say thank you to all workers within the transport industry for your commitment and support throughout the COVID-19 pandemic. 
Through social distancing rules to keep infection rates down, panic buying of toilet paper & hand sanitiser, a sudden wave of trackpant sales, and the benching of all televised sport, the transport industry remained vigilant and committed to doing what it does best - keeping the country moving.

As the National Transport Industry's CEO, Tony Clark put it, "these are the people who work tirelessly every day to ensure Australians get what they need. We’ve seen an amazing response from these workers during the COVID-19 crisis and it’s now more than ever we can see how vital their work is." 
As transport insurance specialists, we understand that each business has its own complexities and it is our role as insurance brokers to work with our clients to customise an insurance policy for each individual business. Then on your behalf, we will negotiate with numerous insurance companies to achieve a suitable premium and coverage for you, our client.

We specialise in providing tailored insurance for the transport industry, and strive to uncomplicate the complexities of the insurance world.

 

This year has been one of the toughest in living memory for the Australian alcohol industry, and with government restrictions around COVID-19 beginning to ease, many will be hoping to put the worst behind them.

Reopening a business in the post COVID-19 era presents a host of challenges, and we have tried to address the main ones below. However above all, it’s essential to keep abreast of current guidelines issued by federal and state governments via www.safeworkaustralia.gov.au and your local state government website respectively.

Engage with your customers:
Check in on social media, leverage your existing customer base and get people excited about coming back to your cellar door, distillery or brewery. Anticipate how customers’ behaviour and expectations may have changed and try to accommodate their new expectations.

Think about how your processes will change:
Think about how staff will work differently than before. Put in place a cleaning roster and make sure everyone is across the rules on social distancing. Consider common touch points; menus or tasting lists may be laminated and disinfected between uses, shared condiments, water stations removed etc. Set up training sessions to introduce staff to these new processes.

Consult with your staff:
Many will have legitimate concerns about a return to work, from transport to at-risk loved ones, and shared facilities. It’s important to be open about your plans and address these concerns in order that staff can feel comfortable returning to work.

Check in on your assets and inventory:
If you haven’t looked in on your stock or cellar door for a while, then it’s probably time to do so. Leaks may have sprung up, stock could have been damaged or use by dates exceeded, or machines may need essential maintenance. Consider stock levels in terms of reduced demand and make sure any replacement stock is ordered far enough in advance, as supply times may have increased.

Diversify:
Many businesses have been forced to diversify their offerings, with increased delivery services, interactive online tasting experiences, and curated mixed cases giving customers the feeling of a cellar door experience at home. In some cases, these will continue as profitable side-lines, or even take over as a more significant part of the business.

Resouces: Brewery CheckSheet, CTT Application ,    

 

Midland Insurance Brokers has functioned as a family-owned and operated business for more than 30 years, priding themselves on providing professional, personal and authentic insurance advice and service to Australian small and medium-sized enterprises (SMEs).

Terry Lane was awarded the coveted Lex McKeown trophy in 2014.

Midland commenced in 1986 as Cilmi Insurance Brokers, with aspirations for the company to be seen by their clients as an honest, reliable and professional insurance adviser with service excellence. And it turns out these values have served the company well, with strong client growth and retention, coupled with a strong reputation across the industry for good business ethics and a personal approach to their clients.

Over the last 5 years alone, Midland has doubled their number of staff, currently employing 50 staff across offices in Melbourne, Mornington Peninsula, Sydney and Perth, with plans in place to open offices in Queensland and South Australia to help better serve their growing client base.

In addition to providing a full range of general insurance products, Midland have also worked with various insurance companies to develop a suite of tailored insurance programs specifically for the industries below. Creating these programs has enabled Midland to negotiate additional benefits and exclusive discounts for their clients.

  • Interior Fitout
  • Breweries & Distilleries
  • Cideries & Kombucha Manufacturers
  • Wineries & Vineyards
  • Photography / Film & TV
  • Transport & Logistics
  • Landscapers & Horticulturalists
  • Trades & Construction

Throughout his successful tenure at Midland, Terry Lane accrued countless achievements, one of which was the coveted Lex McKeown trophy in 2014. Awarded by the National Insurance Brokers Association (NIBA), Terry was recognised for his outstanding service and contribution to the industry. Although, he could have probably won the award on account of his larger-than-life personality alone.

Terry was heavily involved in educating the industry and promoting how SMEs could benefit from using an insurance broker. For starters, insurance brokers:

  • are autonomous of insurers
  • provide honest and non-partisan advice
  • negotiate better premiums & conditions
  • explain all aspects of your policy
  • offer a wide range of plans
  • provide extensive market expertise
  • save you considerable time and effort
  • meet with you face to face
  • help with making a claim
  • help with employee education & contract renewal
  • work for you

He also had a knack for being able to communicate and simplify the complexities of insurance contracts to his clients. Uncomplicating the complex has been instilled in the company’s culture to this day and has subsequently become the company’s brand tagline.

Since Terry’s passing in 2018, his two sons, Damien and Justin, stepped up to take over the reins of the business, both of whom have been committed in maintaining the culture, values and business acumen that have been the backbone of Midland’s service offering to clients and insurers for the last 30 years.

As Justin sees it, “even though we’ve taken on more of a leadership and managerial role over the last couple of years, we still love being brokers and we will always make time to meet with our clients”.

For Damien, he finds “our terrific staff, our expertise and our simplified approach that we take with our clients is what makes Midland unique”.

For brother’s who work together, they not only complement each other’s skillset, they show that they have the drive and the ability to ensure the success of Midland’s future.

In order to help bring Midland further into the insurance industry spotlight, they have recently given their brand a refresh after 20 years. Damien states, “with the launch of an updated logo, colour suite and new website, we are determined to showcase Midland as a progressive and modern competitor in the insurance broker market”.

And although COVID-19 has played havoc on the operations of many SMEs around the country, Midland’s staff have been lucky enough to maintain ‘business as usual’ operations.

“Thankfully, it’s been a fairly seamless transition for us. We place great trust in our staff, and other than having to adapt to working from home and replacing face-to-face client meetings with Zoom or Skype, the Midland team has been able to continue serving clients remotely”, says Damien.

How the COVID-19 pandemic will impact the overall insurance industry moving forward is yet to be seen. But considering a brokers’ bread and butter revolves around risk management and adapting to change, Midland look to remain focused on doing what they do best – uncomplicating the complex world of insurance for their clients, tailoring policies to suit the individual needs of businesses….and holding on to the pipe dream that Carlton will win another premiership.

 

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