Cartage Carriers Facility

Liberty

Cartage Carriers Facility
Overview
o LIU have been writing Cartage Carriers Facility with Transport and General since 2010.
o The facility is transacted on OQS platform supplied by LIU.
o Transport and General have an agreement in place with LIU to place all Cartage Contractors with LIU on an offer and acceptance basis on agreed rates and wording.
o This annual agreement is negotiated between management, and is due on the 15th August each year for the forthcoming year where we discuss figures, claims, actuarial etc. and make changes/amendments accordingly.
Underwriting Guidelines
o The Cartage Carriers facility is designed to accommodate small to medium cartage contractors who can operate Australia wide. The online quotation system (OQS) can currently automatically quote risks with a turnover of up to AUD2,000,00. Anything with a turnover of greater than AUD2,000,000 is automatically referred to an LIU underwriter for review and acceptance
Staff Structure
o LIU
o Team of 3 consisting of Frank and Kay (Natalie on Maternity Leave effective 5th October)
o Turnaround times for a quote is 24 hours
o For urgent matters, it is always best to call and let us know accordingly and we will do our best to get it back as soon as possible
o All correspondence needs to be sent via OQS or if an email is required best to send to liucasualty inbox, as this is constantly monitored, rather than our personal emails. There is no need to copy in our personal emails when sending an email to the liucasualty inbox.
o Contact Information
o Frank Salvatore 03 9619 9848
o liucasualtyprogrammes@libertyiu.com
GWP
o LIU have partnered with T&G since 2010
o GWP for the portfolio has remained between $900,000 - $1,000,000 at its peak.
o 2017 GWP for the calendar year was $925,818 with 777 policies
o New business figures annually however between $80,000 - $250,000 with 2017 writing $80,000 of new business.
Product Offering
Standard Coverage
o Comprehensive tailored liability policy
o $20m & $25m CGL limit available
Optional Coverage
o Statutory Liability Extension
o Wording standard is $1,000,000
o Can be increased for extra premium up to $5,000,000
Deductibles
o Minimum CGL Deductibles are per OQS as follows: -
o You will be responsible to pay the first AUD 500 of each claim or series of claims in
respect of Damage arising out of any one Occurrence (cost inclusive) except for;
o Injury to contractors/ subcontractors and/or labour hire where the deductible will be
calculated as per the following:
o If the payments are less than 25% of turnover & GFE is less than AUD 750,000, a
$500 Injury to contractors/ subcontractors and/or labour hire Deductible will be
applied.
o If the payments are more than 25% of turnover, please refer to LIU for applicable
Injury to contractors/ subcontractors and/or labour hire Deductible.
o Statutory Fines and Penalties
o The deductible is AUD NIL each and every Claim (costs inclusive).
Business Description
o Standard:
o Cartage Contractor, property owners, cartage contractors, depots, storage facilities
and mechanical repair activities up to $5,000 of the turnover, excluding cartage
and/or storage of hazardous good where a licence or placard is required
o Hazardous:
o Cartage Contractor, property owners, cartage contractors, depots, storage facility and
mechanical repair activities up to $5,000 of the turnover including cartage of
hazardous goods
Other Activities
o Provided that a minimum 80% of the Insured’s turnover is derived from cartage contracts,
LIU will be able to look at other activities however these will be treated on their own merits
on an offer and acceptance basis, using the LIU standard underwriting approach.
Declines
o Internal Labour Hire
o Furniture Removalists if they use contractors. If not subcontractors ok to write with a
higher standard excess of at least $5,000.
OQS Functionality & Questions
1. Please enter applicable Insured Name, that is connected to an ABN. If the client doesn’t have
an ABN ok to type in the name, however we will need ABN prior to binding.
2. Once Insured Name from above has been linked with an ABN, the system will populate the
entity and ABN number, you will need to type any other subsidiaries that require cover under
this entity.
Please note when there are a number of subsidiaries, can we please ensure we understand the
following for each subsidiary:
Business Activities
Turnover
Subcontractors
Labour Hire
This information can be included in a file note, or attached as submission support.
We also need to ensure the entities are not conducting any internal labour hire activities.
Internal Labour Hire companies are generally companies with a larger corporate group that are incorporated
to provide labour to another company within the structure
If the insured does conduct internal labour hire this is a decline from LIU, this is not an exposure
want to be covering.
3. Address information for the Insured, this goes into our processing system, and it is an APRA
requirement that we hold a street address of each client.
4. Contact Name and details – this is more for your information in relation to the client, LIU do
not use this information.
5. Business Description – please ensure the business description reflects the business activities of
the client. This question has provided an option for the “standard” business description, if this
is not accurate, please select “no” and amend accordingly.
6. Types of Cargo – this section is split into 3 categories:
a) General Goods (as per the drop down box, which is just tick a box of what the client
would be transporting on an annual basis)
b) Hazardous/Dangerous Classed Good where a licence &/or placard is required – this is a
% based on the annual cartage the insured would do on a yearly basis that would be
classed as per above.
i. This drops down further, into class 1 goods which are explosive for
example:
- Ammunition/cartridges
- Fireworks/pyrotechnics
- Flares
- Blasting caps/detonators
- Fuse
- Primers
- Explosive charges
- Detonating cord
- Air bag inflators
- Igniters
ii. Do you have a licence to store dangerous goods for your own use or for
third party goods? This is an exposure we do not intent to cover, due to
the exposure of storing explosive goods.
c) Other – this category is for any client that conducts any other activities outside cartage
activities. Ie earthmoving (please ensure you type the occupation as it will show up on
the policy schedule)
7. Estimate annual gross freight earning for the forthcoming year – is the total gross income less
GST but without deductible of any other experience from carrying the goods
8. Subcontractors –
a) Estimated payments to subcontractors – what the insured pays to an individual or
business that signs a contract to perform a specific task or work and is paid for services
provided.
b) Percentage of Payments is then split into:
i. Subcontractor Driver who drive their own truck to conduct work for our
insured. This is a reduced risk, as the Insured is not responsible for the
maintenance of the truck.
ii. Subcontractor Driver who drives your truck to conduct work for our
insured, is a higher exposure as we are responsible for the maintenance of
truck. Ie if the step to the truck breaks causing injury to the driver, that is
our responsibility.
iii. Other – this is for any other subcontractor the Insured engages to conduct
work on their behalf, please provide a description of the work these
subcontractors conduct, in order for LIU to assess the exposure accordingly.
9. Labour Hire – Estimate payments to Labour Hire which are staff sourced from an entity to
provide services for our Insured. Ensure you provide a description of the type of work the
Labour Hire will conduct so LIU can assess the exposure accordingly.
10. Stamp Duty – this will default to the state based on the address enter in on the first screen,
however this should be amended to where the work/GFE is generated. Ie if 50% of income is
coming from QLD and 50% from NSW, then this needs to be amended to 50/50.
11. Claims & Insurance History - this is the declaration by the insured confirming the standard of
NIL claims and confirm Insurance History. If any of these questions below are answered
positively you will need to provide further details in order for LIU to review accordingly. Ie if
the client has had previous claims not with LIU we need to obtain a claims experience on
Insurer letterhead outlining the below details:
o Net or gross of deductible and what the deductible is
o If it is open or closed
o Date of loss
o Date reported
o Incident details
12. Limit of Liability – two options under the primary policy offering, which is also recommended
to quote both options, as the jump in premium from $20m to $25m isn’t a lot, and a lot of our
competitors are unable to provide $25m under a primary policy.
If a larger limit of liability is required, this will be having to be written through our Open Market
Team, if you just leave a note at the end of the submission, we will be able to provide terms,
with the primary $25m sitting in the facility and the excess layer sitting in OMP. LIU can
provide up to $50m LOI any one policy.
13. Optional Statutory Lability Coverage – this is option to provide the insured cover as a result of
civil fines and or penalties in accordance with the terms and conditions of our wording.
LIU can provide options from $1m to $5m in coverage for SLP, and encourage quoting at least
one SLP option on each quote, as this is an offering a lot of the market is not providing.
14. Policy Period – this is the duration of the policy the Insured is after, please note:
a) We cannot back date cover
b) Minimum policy period is 6 months
c) Maximum policy period is 18 months
15. Declaration – this is stating that all information you have inputted into the system is a true
reflection of what the Insured has declared to you, as you are acting on behalf of your client.
This is also the place in which you can select if the client is exempt from NSW stamp duty,
please ensure you have a declaration signed on your file prior to binding.
16. Additional Comments: - this is the space to write any further comments you need to
communicate with LIU and uploading supporting documentation.
Pricing & Competitors
o LIU understand the pricing competitiveness on this product, however we need to also
understand what we are up against, and is the product like for like. A few points to review
before requesting a discount:
o Is SLP included?
o What are the deductibles?
o What is the business description, are they picking up all activities i.e. hazardous
goods, other activities?
o Does the policy wording include loading and unloading?
o What is the CCC sub-limit?
o What is the insurers service, knowledge and claims service like?
o Are terms based on currently information or expiring information?
The above information assists us in understand not only what our competitors are doing, but
also allows us to drill down into is there a turnover band that we need to review our rating
structure on?
o LIU have technical rates, and we can discount where and if required however we do need to
maintain the portfolio at leave 90% of technical pricing. What does this mean, it means we
can only provide so many discounts. Therefore, in order to assist in providing more
discounts we need to obtain loadings where it makes sense to do so. Areas in which we can
look at loadings are:
o What was expiring GFE and Premium compared to estimate GFE – can we look at
rate on turnover. Although there may only be a small increase it all makes a
difference. Ie $200k GFE for $660++ expiring this year $220k GFE declared
technical premium is $660++ can we charge $726++ charges this is the same rate on
turnover.
o Is there difference in expiring business activities, subcontractors, labour hire
payments that we can increase pricing with?
o We need to also look closely at Insured that have had claims, although we are here to
pay claims, they do need to penalized as we have plenty of clients with NIL claims
on the portfolio and why should they pay the same as a client who has had a claim.
Contractual Liability
o LIU have broad capabilities around contractually assumed indemnities and realise it is part of
our clients doing business
o It is important that you encourage your clients to seek independent legal advice prior to
entering into these contracts so they are aware of any potential gaps between the contact and
extent of policy response.
o LIU will ask for the full contract, to understand
o Scope of work our client is providing
o Duration of work
o Income derived from contract work
o LIU do not read the entire contract – just the indemnity and insurance provisions and
provide feedback accordingly.
o Timeline: Contract reviews are not quick turnaround, please allow at least 48 hours for LIU
to review and respond accordingly.
Renewal Business
o If the Insured has had a claim with LIU please request an updated claims experience as
reserves can increase/decrease dramatically
o If it is a renewal and at new business a claim was declared and the status was open, we need
an updated claim experience on underwriter letter head, as:
- Claim may now be closed
- Reserve may have decreased or increased
o The system cannot recongnise if an account was discounted last year, so if the premium
looks incorrect please refer through, and provide your recommendation for pricing,
remembering we are trying to reduce historical discounts where possible.
Hold Covers
o If you need to hold cover please send through to LIU to review and approve. Once you
have instructions to bind, we will have to back-date the inception date.
o Standard hold cover timeframe is 7 days.
Lapses
o Where a renewal lapses, where possible please attempt to find out why. This allows us to
track if there is a trend to why we are losing renewals. For example:
o Business Sold
o Business no longer trading
o Broker lost the account – do we know why?
o Client went elsewhere – do we know why?
o Price - do we know where they went, and what price they got?
Mid-term Endorsements
o These can include additional activities undertaken, additional turnover to be declared,
increased limits requested, and SLP added mid-term (for example). We have had a number
of mid-term endorsement requests that are based on a contract or tender our Insured is
going after.
o If a mid-term endorsement is requested details must be provided to LIU and LIU will review
and ask questions, or provide EP figures details. This must then be confirmed if the Insured
wants to proceed. All terms are offer and acceptance and this applies to mid-term details as
well.
o Please ensure that confirmation is sent to LIU after details have been confirmed and
accepted by client.
Mid-term cancellations
o We need correspondence from the broker/client in writing in order to cancel the policy
o We will cancel from the date that LIU receives the above correspondence.
o Please ensure that the cancellation request is uploaded onto OQS.
Cancellations due to non-payment
o We need written directions from the broker/client in order to cancel from inception due
to non-payment.
Cancellations due to premium funder request
o We need the signed premium funding contract (including the terms & conditions), along
with the funder’s cancellation request which we then have to send to our legal
department to ensure that the contract does in fact confirm they can cancel the policy on
the client’s behalf.
o LIU will only cancel from the date the premium funder advises. The premium funder
will want us to cancel from the date they stopped receiving payments, however we will
not agree to this as we have to stay on risk until the date we were notified & therefore
that will be the date of cancellation. This is an inherent risk of a premium funder.
Extending a policy
o Usually this occurs when a client wants to common due date all their insurance policies,
or extend cover as they are selling or closing the business.
o Please note that our maximum policy period is 18 months and our minimum policy
period is 6 months.
o Before requesting extension please ensure you advise LIU:
o Why they want to extend
o The date they want to extend to
o There will be an additional premium charged, and we will always revert back letting you
know the additional premium before processing. We will then wait for the client’s
instructions before proceeding.
Amending Policy Limits
o This is usually done because of contracts
o LIU can increase limits mid-term however we require the below information:
o Effective date (please note that we cannot back date)
o Why?
o Limit required
o The limit will be effective for the remainder of the policy period and the change
will incur an additional pro-rata premium.
Updating the Insured Name
o This can be done mid-term however we require the below information:
o Exactly what the insured name needs to be changed to
o Why is it changing?
o Is there any additional turnover or activities associated with this change? I.e. an
entity acquisition, and if this is the case a newly completed proposal form is the
easiest way to capture all the information required.
o Do they have any internal labour hire? A company organisational structure can
be a good tool to use.
o Depending on the above additional premium may be applicable.
Business Description
o This can be done mid-term due to the Insured changing their business activities usually
adding additional activities. In this instance we need to understand the below:
o We need to understand the additional turnover applicable per activity and if there is a
limit increase and effective date (please note that we cannot backdate).
o An additional premium will be applicable
COC
o If the Insured requires principal’s indemnities to be noted, LIU need to understand who,
why and the exact name to be noted. Please include these details in your request.
After binding requests
o After LIU have received bind confirmation from client we will not be reviewing a reduction
in turnover or pricing.
Major Exposures
Based on our current portfolio with T&G, we view the main exposures to be as follows:
Exposure: Storing and cartage of hazardous goods
Control: A storage risk would originate only from Insured’s with a depot, usually involving
warehousing and/or storage of chemicals. We would mitigate through questions
regarding dangerous goods, types, quantities, premise, storage and licensing
requirements.
We do not envisage writing bulk storage of hazardous goods under this facility, and
risks with a dangerous good component is still a very small component of the
portfolio.
Exposure: Injury to third parties
Control: There is minimal exposure to the general public for these risks, but significant
potential exposure to other third parties at premises where goods are loaded and/or
unloaded. This exposure is quite difficult to control, and really comes down to the
Insured’s own risk management procedures.
Exposure: Fire and/or escape of fire
Control: The main exposure to the LIU book would be escape of fire originating from and
Insured’s depot. This risk is of course greater if an Insured is storing dangerous
and/or hazardous goods.
Exposure: Cross Liabilities
Control: Multiple Insured parties being indemnified under one policy, particularly when
there is hire of staff between the parties is becoming a bigger risk to LIU in general.
Exposure: Unregistered Plant
Control: Minimal exposure under this book, mainly limited to Insured’s who have a big
enough depot to be using forklifts and similar equipment and some of the Insured’s
who also do a small portion of earthmoving and/or excavation works. The main
control on these risks is that the unregistered plant is operated by licensed
personnel.
Exposure: Injury to Contractors, Sub-contractors and/or Labour Hire
Control: This book of business has minimal use of contractors and sub-contractors and very
limited use of labour hire. The vast majority of risks with payment to contractors
and/or sub-contractors are sub-contractor drivers, with the system automatically
applying a $25,000 Injury to Contractors deductible once the payments to
contractors are over a certain percentage of the Insured’s GFE.
Exposure: Goods in Care, Custody or Control
Control: The agreed T&G wording has an additional clause within the Care, Custody or
Control Exclusion which excludes ‘liability in respect of Damage to property being
transported, stored, loaded and/or unloaded’ any goods which do not fit into this
exclusion are then provided up to an aggregated sub-limit of $100,000.
Exposure: Tenants Liability
Control: Exposure to the landlord for the damage to their premises as a result of the client’s
activities.
Exposure: Contractual Liability
Control: The agreed T&G wording includes contractual liability exclusion. In order to
consider providing any contractual liability coverage we would need to receive a
copy of the contract in question and underwrite as per normal.
Claims Examples
Insured: Maurice Walters
Net Incurred: $15,478
Description: Claimant has put his head between an unsupported portable home in the
process of being unloaded and a truck bed. The portable home has fallen and
caused significant facial damage. Our Insured had all the correct risk
assessments in place, however these have not been followed by the claimant.
Insured: Garousse Refrigerated Pty Ltd
Net Incurred: $80,975
Description: Insured has pumped fly ash into the incorrect silo.
Insured: Transport Plus Pty Ltd
Net Incurred: $22,988
Description: Claimant has injured his shoulder whilst operating an allegedly fault roller
door.
Insured: Rodimila Pty Ltd
Net Incurred: $97,530
Description: Water damage to third party property as a result of failing to cap a water
supply to an old dishwasher that had been removed. It is alleged that the
Insured used a plastic cap (designed only to keep debris out of the pipes) to
cap the pipe following the removal of the dishwasher., statements from the
driver and the drivers assistant, both of whom have denied that they capped
the pipe with anything. Both the driver and the assistant have provided a
draft statement that they turned the tap off, and left the pipe uncapped. This
would suggest that a third party has then put the plastic cap onto the pipe,
and turned the water back on.
Insured: Brad Meiers
Net Incurred: $1,000,000
Description: Contractor injured back whilst assisting Insured moving a heavy storage rack
Insured: David & Maree Menz
Net Incurred: $146,379
Description: Delivery driver working for Insured as host employer was injured when he
fell over a pallet at a customers premises
Insured: Drome Holdings Pty Ltd
Net Incurred: $60,508
Description: Insured was unloading a tipper of this trailer which backed into a stationary
truck causing damage
Insured: Envirohaul Pty Ltd
Net Incurred: $36,500
Description: The insured’s driver was raising the tipper body to gain access to the fuel
tank, it was raised too far and has caused damage to the petrol station
canopy.