Berkley Insurance Australia has provided insights into financial lines claims trends, revealing key concerns, common mistakes, and best practices crucial for brokers and their clients.
These insights aim to ensure proper coverage and efficient claims management in a changing business environment – something that insurance professionals could share with their clients.
Berkley emphasised the importance of accurate business descriptions in professional indemnity policies.
“They should encompass all the activities the insured undertakes or have undertaken in the past, particularly any that are unusual for their profession,” it said.
Retroactive dates in claims-made policies determine the start period for claim coverage, making it essential for clients to set these dates correctly to prevent gaps.
The indemnity limit is the maximum the insurer will pay for a claim.
Berkley advises insurance professionals to educate their clients about whether legal costs are included within this limit or are separate, as this affects settlement amounts.
“The excess, or deductible, can also be inclusive or exclusive of costs, impacting the timing of when an insured is required to incur out-of-pocket expenses,” it said.
Berkley emphasised that prompt notification to the insurer when aware of a claim or potential claim is crucial.
“Delays can lead to complications and potentially affect coverage. Providing comprehensive information at the time of notification helps the insurer assess the claim. This includes incident reports, correspondence, legal documents, and any other relevant evidence,” it said.
Using panel lawyers is generally more advantageous than using the insured’s own legal counsel.
“Panel lawyers have expertise in specific areas of law relevant to the claim and offer competitive rates, ensuring efficient and cost-effective resolution of the claim,” Berkley said.
EPL claims, including those for unfair dismissal, harassment, and discrimination, have been notable, with heightened awareness of employment rights and recent legislative changes contributing to rising claims.
ATO investigations into GST, R&D tax offsets, and other tax matters have resulted in significant accounting costs for businesses. These investigations often span several years and can be quite expensive.
Claims related to workplace safety violations are another critical area. Delays in notification and failure to follow procedures can worsen these claims.
Early notification and adherence to policy conditions are essential for managing these complex and costly claims.
Claims against architects often arise from project management activities rather than design errors.
Real estate agents face claims mainly related to property management, particularly for failing to arrange repairs for unsafe properties. Ensuring accurate business descriptions and adequate coverage for these activities is crucial, according to Berkley.
Claims against IT consultants frequently involve cyber-related incidents, such as social engineering attacks. These claims underscore the evolving risks in the IT sector and the importance of comprehensive coverage that addresses both traditional professional liabilities and emerging cyber risks.
The construction industry has seen a rise in insolvency appointments, which is expected to continue.
“These situations often lead to claims under various policies, including management liability and professional indemnity. Understanding the interplay between different types of coverage is crucial for brokers and their clients,” Berkley said.
New legislation under the Fair Work Act, which restricts contacting employees outside work hours, may lead to an increase in EPL claims.
Berkley said monitoring how this legislation impacts workplace dynamics and claims will be crucial in the coming year.
Rising legal and associated costs, often referred to as social inflation, are a growing concern.
Berkley suggests that early engagement with insurers and proactive claims management can help mitigate these costs and improve overall claim outcomes.
The release of Berkley’s sector insights follows the announcement of its partnership with an organisation committed to alleviating global energy poverty.
