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Insurance Presentation Specifically Tailored For Australian PACK & SEND Franchises

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Presentation on theme: "Insurance Presentation Specifically Tailored For Australian PACK & SEND Franchises"— Presentation transcript:

1 Insurance Presentation Specifically Tailored For Australian PACK & SEND Franchises

2 Sear Insurance Brokers and PACK & SEND Sear Insurance Brokers commenced transacting insurance business in 1975. Our company has exceptional experience and superior knowledge of the insurance sector Australia wide. We specialise in the analysis, placement and management of commercial insurance programs and individual insurance products for business clients. We also provide a wide range of retail products and services for our private clients. As brokers, we act on behalf of clients and represent our clients interests when placing cover, throughout the policy lifecycle and in the event of claims. The PACK & SEND Insurance Facility has evolved over the past 11 years to specifically suit PACK & SEND Franchisees and is exclusively available to participating Australian and New Zealand Franchisees. In close alignment with PACK & SEND Head Office, this specific insurance program has been tailored to match the risks that PACK & SEND Franchisees are exposed to on a daily basis. The Facility is designed to provide PACK & SEND Franchisees with security against loss, damage and liabilities associated with their business activities world wide. This presentation provides information about the following recommended minimum cover for a new PACK & SEND Franchise operation: Business Package (Property & Liability Cover) Personal Accident & Illness Marine Transit (Australia Wide) Marine Cargo (International) Freight forwarders Liability Before Signing The Lease, Store Fit Out and Opening:– Contact Sear Insurance Brokers For Full Consultation and Induction We Will Provide Comprehensive Information About All General, Specific and Statutory Insurance Requirements and arrange all necessary cover in accordance with your instructions. PACK & SEND – Procedure Summary AU 2010

3 Contents What can go wrong? Page Number Risks You Will Be Exposed To4 Business Insurance Facility - Cover Summary Property Loss & Damage5 Business Interruption6 Burglary7 Money8 Plate Glass9 Broadform Liability10 Portable Property11 Personal Accident & Illness 12 Optional Coverage13 Basic Risk Management14 Marine Insurance Facility - Cover Summary Cover And Trading Preamble & Formula Of Coverage15 Cover Limits and Sums Insured & Special Arrangements16 Cover Exclusions17 Gold Service Warranty & Trade Practices / Fair Trading Laws18 Consignment Notes19 Conditions Of contract20 Risk Management 21 Premium Calculations22 Online system 23 & 24 Memorandum Of Agreement25 Claims Procedure 26 & 27 PACK & SEND – Procedure Summary AU 2010

4 Risks You Will Be Exposed To Somewhere in your PACK & SEND life, you may ask yourself why you need all the insurances you pay for, and again why has there been such an emphasis on ensuring the cover is as broad as it is? Naturally, you may have periods of time where you may not require your insurances, or need to claim for some time, but for those once off occasions where you need to fall back on the cover, you will be glad you arranged it. Being involved with PACK & SEND for over 10 years now, we are confident we have seen almost everything that could go wrong, actually go wrong. That’s why over the last 10 years, Sear Insurance Brokers have been working exceptionally hard to continually improve and broaden your program. Extraordinary effort has been put into ensuring our cover is broad enough to cover risks that a PACK & SEND Franchise will be exposed to whilst going about their business. We are confident we have anticipated just about everything that can go wrong. In the freight industry, it is well known that there are many risks and factors that need to be taken into account. Not only are you responsible for sending other peoples belongings, by being part of PACK & SEND you are expected to Pack goods in such a way that they arrive at the other end in good condition. 4 PACK & SEND – Procedure Summary AU 2010

5 Property Loss or Damage Material Loss / Damage: Contents Of Every Description, Stock & Customers Goods $ 150,000 Removal Of Debris $ 10,000 Total $ 160,000 Covers: Physical Loss Destruction Of Or Damage To The Property Insured As A Result Of An Insured Peril. Basis Of Settlement:Replacement / Reinstatement Additional Benefits: Accidental Damage $ 250,000 Flood – Set Sum Insured Up To $ 50,000 Capital Additions – Limited to 20% Of Sum Insured of $ 500,000 Alterations & Additions – Limit to 20% of Sum Insured or $ 200,000 Personal Effects Of Directors / Employees $ 20,000 Fire Brigade Costs $ 50,000 Removal Of Debris $ 50,000 Temporary Protection & Security Guards $ 25,000 Temporary Removal – Up to 90 days - 20% of Sum Insured Property In Open Air $ 10,000 Prevention Of Imminent Damage $ 50,000 Seasonal Increase In Stock (or 50%) $ 75,000 Landscaping – 20% of Sum Insured or $ 50,000 Limited Transit – 20% Of Sum Insured or $ 50,000 Loss of Land Value $ 100,000 Re-Writing Of Records $ 50,000 Architect & Consultants Fees & Costs $ 10,000 Major Perils Covered:Fire Explosion Lightning Or Thunderbolt Earthquake Impact Malicious Damage Storm &/Or Tempest Water Or Other Liquid Leakage Rainwater, Run Off, Sprinkler Discharge Excess / Deductible: Standard Excess $ 250 5 PACK & SEND – Procedure Summary AU 2010

6 Business Interruption Consequential Loss:Loss Of Gross Profit (Including Payroll) $ 100,000 Increased Cost Of Working $ 50,000 Professional Fees $ 20,000 Payroll Included Total $ 170,000 Covers:Loss Which Arises From The Interruption Of The Business As A Direct Consequence Of Damage To The Insured Property Covered Within Fire, Burglary Sections. Basis Of Settlement:Annual Gross Profit Basis Turnover Less The Cost Of Goods Sold Indemnity Period:12 Months Additional Benefits:Customers & Suppliers Premises $ 100,000 Public Utilities $ 100,000 Computer Installations – Limit 10% Of Sum Insured Prevention Of Access - 50 kilometres Storage Sites & Temporary Removal - 10% Of Sum Insured Explosion Of Pressure Vessels Infectious Disease Claims Preparation Costs Transit – 10% of Sum Insured Documents – 20% of Sum Insured Excess / Deductible:Standard Excess $250 / 48 Hours 6 PACK & SEND – Procedure Summary AU 2010

7 Burglary Burglary: Contents, Stock And Customers Goods Of Every Description $ 30,000 Covers:Loss Or Damage To Insured Property Directly Caused By Theft Consequent Upon Actual Forcible Entry To The Insured Premises Or Armed Hold Up Including Threat Of Violence Or By A Person Feloniously Concealed On The Premises. Alarm Warranty: Burglary Coverage Is Limited To $20,000 Until A Monitored Back To Base Alarm Is Installed And Operational At All Times That The Premises Are Left Unattended. When A Monitored Alarm Is Not Installed And Operational At All Times At The Premises An Excess Of $750 Applies To Each Burglary Claim Over $20,000. Basis Of Settlement:Replacement Value At The Time And Place Of Loss Additional Benefits:Personal Property Of Directors & Employee $ 20,000 Theft Without Forcible Entry $ 20,000 Theft In The Open Air $ 5,000 Theft of Permanently Fixed (Non Portable) Apparatus $ 10,000 Employee Dishonesty $ 10,000 Keys, Locks & Combinations $ 10,000 Safes & Strongrooms $ 7,500 Temporary Protection & Security Guards $ 25,000 Temporary Removal $ 30,000 Damage To Tenanted Premises $ 10,000 Re-writing Of Records $ 10,000 Death Following Assault $ 10,000 Seasonal Increase - 50% Of Sum Insured Excess / Deductible:Standard Excess $ 250 7 PACK & SEND – Procedure Summary AU 2010

8 Money Money: On Premises During Business Hours $ 2,500 On Premises After Business Hours$ 500 Transit To & From Bank$ 2,500 Personal Custody / At Private Residence$ 2,500 Safes & Strong rooms (24 Hour)$ 2,500 Covers: Current Coins, Bank Notes, Currency Notes, Cheques, Credit card Vouchers, Money Orders, Postal Orders, Unused Postage and Revenue Stamps, Telephone Cards, Transport Tickets, Lottery Tickets, Negotiable Securities, Notes and Instruments Belonging To You Of For The Custody Of Which You Are Legally Liable. Additional Benefits: Property Of Directors & Employees $ 1,000 Employee Dishonesty $ 5,000 Damage To Safes & Strongrooms $ 7,500 Temporary Protection & Watchmen $ 10,000 Locks, keys & Combinations $ 10,000 Seasonal Increase 50% Death Following Assault $ 10,000 Excess / Deductible: Standard Excess $ 250 8 PACK & SEND – Procedure Summary AU 2010

9 Plate Glass Glass: Internal Glass $ Replacement External Glass $ Replacement External Signs $ 10,000 Covers:Accidental Breakage of Glass Basis of Settlement:Replacement Additional Benefits:Temporary Shuttering Burglar Alarm Tapes Reflective Material Door & Window Frames Overtime / Express Delivery Sign Writing / Ornamentation$ 10,000 Stock Breakage $ 15,000 Excess / Deductible:Standard Excess $ 100 9 PACK & SEND – Procedure Summary AU 2010

10 Broadform Liability Liability:Public Liability $10,000,000 Products Liability $10,000,000 Care, Custody, Control $ 250,000 Covers:Amounts you become legally Liable to pay as compensation for Personal Injury and or Property Damage during the period of Insurance as a result of an occurrence happening in connection with the Business and or products sold or supplied. Additional Benefits:Care, Custody & Control Of Property $ 250,000 Cross Liability Principals Indemnity Hoists, Cranes & Unregistered Vehicles Legal Costs Charges & Expenses Recoverable First Aid Expenses Major Exclusions:Employee Liabilities Aircraft / Watercraft Asbestos Contractual Liability (Other than those implied at law) Design Defect, Faulty Work, Product Defect Product Recall Breach Of Professional Duty Known Defects Hold Harmless Agreements Libel & Slander (Other than accidental utterance) Property In Physical & Legal Control (Insured By Marine) Loss Of Use Registered Vehicles Pollution Deductible:Standard Excess $ 500 10 PACK & SEND – Procedure Summary AU 2010

11 Portable Property Portable Property: Contents Of Every Description & Stock $ 5,000 Item Limit $ 2,500 Covers: The Loss Or Destruction Of, Or Damage To Insured Property Caused By An Unintended Or Unexpected Event – Anywhere In Australia Major Exclusions: Theft Unless Resulting From Actual Forcible Entry To A Securely Locked Premises Or Vehicle Moths, Termites, Insects Or Vermin Rust, Mould, Rot Or Other Atmospheric Conditions Wear, Tear, Fading, Scratching Or Normal Upkeep Error Or Omission In Design Faulty Materials Or Workmanship Testing Or Overloading Unexplained Inventory Shortage Fraudulent Or Dishonest Acts Unauthorised Access To Computers / Data Flood; Water From The Sea, Storm Surge Damage Whilst Undergoing Repair Mechanical Or Electronic Breakdown Loss Of Use Or Loss Of Earning Capacity Excess / Deductible: Standard Excess $ 250 11 PACK & SEND – Procedure Summary AU 2010

12 Personal Accident / Illness Coverage: 1. Death And Capital Benefits $ 50,000 2. Weekly Accident Benefits $ 500 3. Weekly Illness Benefits $ 500 Insureds Occupation: Postal, Packing & Freight Services Special Benefit: It Is Hereby Declared And Agreed That Notwithstanding The Definition Of "Earnings" In This Policy We Will Pay The Weekly Benefits Shown In The Certificate As A "Set Sum Insured" After The Happening Of An Injury Or Illness Giving Rise To A Claim For Such Weekly Benefits, Subject To The Terms And Conditions Of The Policy. "Set Sum Insured“ The Set Sum Insured Will Replace The Standard Definition Of "Earnings" Under The Policy For A Period Of 24 Months From The Date Of First Establishment Of The Business, Thereafter The Standard Definition Of "Earnings" Will Apply. Benefit Period: 104 Weeks Maximum From The Commencement Of Payments Standard Exclusions: War, Invasion, Civil War, Rebellion Or Insurrection Intentional Self Injury / Suicide Flying Or Other Ariel Activity Unless As Passenger In Licensed Aircraft The Insured Persons Criminal Or Illegal Act Participation Or Training In Any Professional Sport Drink Driving Over The Local / Legal Limit Practice Or Playing Organised Football Of Any Kind Driving Or Riding In Any Race Or Trial Motor Cycling Except For Agricultural Or Pastoral Purposes Or Commuting Directly To Or From Work or Home Excess / Deductible: 14 Days 12 PACK & SEND – Procedure Summary AU 2010

13 Optional Coverage Available Motor Vehicle:Cover For Business Vehicles Specially Arranged To Suit PACK & SEND Activities Cover For Private Vehicles House & Contents:Cover For Residential Buildings and Contents Sear Insurance Brokers Have Arranged Leading Coverage Which is Usually Superior To That Available Through The Direct Market Insurers Work Cover:Employees Indemnity ElectronicElectronic &/or Mechanical Breakdown & MechanicalAccidental Loss Or Damage Breakdown:Restoration Of Data Increased Costs Of Working Income Protection:Coverage For Key Persons. Please Contact Our Office If You Would Like More Information On This Type Of Cover. Death / Disability:Coverage For Key Persons Superannuation:Statutory Requirement @ 9% On Employee Wages Important:The Information Above Is An Outline Of The Coverage Provided. Full Details Of The Cover Are Provided In The Insurers / Underwriters Policy Document. Monthly Premiums:Are Available By Direct Debit Instalments Via Premium Finance Providers Further Information:Please Contact Sear Insurance Brokers For Any Additional Information Or Assistance 13 PACK & SEND – Procedure Summary AU 2010

14 Basic Risk Management Monitored Back To Base Alarm To Be Installed Burglary Cover Will Be Restricted To $20,000 If A Monitored Alarm Is Not Installed Physical Security Of Premises To Be Bolstered Install Deadlocks To All External Doors (Within Fire Authority Guidelines) Consider Fitment Of Bars / Grills To All Accessible Rear Windows Install And Maintain Fire Extinguishers As Required By Local Authorities Power Surge Arrester Installation To Be Considered Data Back Up Procedures To Be Fully Implemented Equipment Maintenance / Warranty Agreements To Be Checked For Adequacy Waste Disposal Procedures To Be Implemented Check All Contractors / Sub-contractors Maintain Liability Insurance Check All Contractors / Sub-contractors Maintain Workers Comp. Insurance Ensure All Contractual Obligations Are Understood (Eg. Lease Or Other Contracts) Cover For Additional Contractual Liabilities You Accept Must Be Specifically Arranged Per Contract Check Schedule Of Standard Cover And Sums Insured For Accuracy & Suitability Consider Optional Covers Available Report Incidents And Claims To The Insurance Broker Immediately Do Not Admit Liability To Others Do Not Accept Liability For Others Due Diligence To Be Applied At All Times 14 PACK & SEND – Procedure Summary AU 2010

15 Marine Insurance Facility - Cover & Trading Preamble Cover is provided to PACK & SEND Franchisees for all consignments undertaken (except those generally or specifically excluded). The structure of cover is designed to provide procedurally simple and cost effective methods of protection, to compliment PACK & SEND Franchisee trading activities. Coverage has been constructed on a tiered liability basis, it is specifically designed for PACK & SEND and revolves around the standard trading activities and standard trading terms of the PACK & SEND Franchise System. Marine Transit and Marine Cargo polices provide blanket at call cover, to all participating PACK & SEND Franchisees. These policies allow PACK & SEND Franchisees to operate the daily function of their business without the need to refer to their insurer for ordinary trading Matters involving the risks they contemplate in respect of customers goods. These 2 policies only provide coverage in respect of material loss or damage to customers goods accepted for carriage under a PACK & SEND Consignment note. These policies will at the request of the PACK & SEND Franchisee provide indemnity in respect of loss or damage to customers goods whilst in transit due to accidents or the deliberate acts of third Parties. Marine Freight Forwarders Liability policy provides coverage in respect of liabilities for loss or damage to customers goods together with a wide range of other consequential losses and liabilities that may arise from the handling of customers goods for packing and freight purposes. About the Formula of Coverage It is important to understand that whilst all 3 policies provide coverage, the Marine Transit and Marine Cargo policies do so whether the PACK & SEND Franchisee has a liability to its customer or not. On this basis the PACK & SEND Franchisee has the choice as to whether to provide indemnity or not, this element of coverage facilitates PACK & SEND Gold Service. Franchisees can “call up cover” even if their customer has not included gold service, thus the Franchisee has the choice of affording indemnity or not but only up to the standard limits and only in respect of goods that are not excluded. A higher excess applies to “call up cover” claims refer to MOA. Where losses fall outside the Marine Transit and Marine Cargo coverage the Freight Forwarders Liability policy stands behind PACK & SEND Franchisees to provide a second tier of coverage. Importantly this coverage is based on strict liability, whilst it intends to indemnify PACK & SEND franchisees it will only do so if the Franchisee or PACK & SEND Systems are libel at law. Like all insurance policies the PACK & SEND policies have exclusions and conditions. Whilst all has been done to contemplate and provide coverage for all the activities of PACK & SEND Franchisees the polices will only respond to claims that fall within the scope of cover. On this basis it is of utmost importance that PACK & SEND Franchisees ensure they understand the limits, exclusions and conditions of all policies taken, in order to avoid undertaking activities that are not insured / covered. 15 PACK & SEND – Procedure Summary AU 2010

16 Marine Insurance Facility - Cover Limits / Sums Insured 1. Marine Transit Covering Australia Wide Consignments & Marine Cargo: Covering International Consignments Automatic Cover “Blanket Limit” Any One Consignment: $ 25,000 Accumulation Limit Any One Conveyance: $ 100,000 Excess $250 Each & Every Claim 2. Freight ForwardersCovering Liabilities Arising From Provision Of Services Liability: Cover Limit: $ 5,000,000 Excess $1,000 Minimum Each & Every Claim Special Arrangements Must Be Made In Order To Comply With Procedures Gold Service Consignments Over The Blanket Limit $25,000 - Top Up Cover To be arranged by endorsement to the policy by accessing our online website (User name and passwords will be issued in a welcoming pack via email) or referred by phone or email for approval by Sear Insurance Brokers. Silver Service Consignments Over The Blanket Limit $25,000 - Online Registration To be logged via the internet for monitoring and risk management using your individual username and password previously provided (or referred by phone or email for approval) by Sear Insurance Brokers. Failure to make the necessary special arrangements will result in either imposed excess’s (as outlined in the M.O.A) or a failure of the policies to respond on behalf of the Franchisee all together. Items that fall outside our automatic approval system will need to be manually approved by Sear Insurance Brokers. This needs to be done when our online system refers you to call us. You can still complete your quote on the online system even when there is a refer, it just means the quote is subject to approval! 16 PACK & SEND – Procedure Summary AU 2010

17 Marine Insurance Facility - Cover Exclusions The three marine policies provide cover for most categories of goods available. There is a list of items which are automatically excluded. These items are not covered by any of your marine insurance policies and need to be referred to Sear Insurance Brokers for manual acceptance on a case to case basis. General Exclusions (Applicable To Marine Transit & Marine Cargo Policies) General Policy Exclusions & Conditions - Refer To Policy Wordings On Packnet Specific Exclusions (Applicable To All 3 Marine Policies) Bullion, Cash, Coins, Banknotes Jewellery, Gold Or Silver Articles Or Articles Containing Gold Or Silver Precious Stones Deeds, Bonds, Bills Of Exchange Or Other Documents Representing Money Livestock And Bloodstock Living Plants Imports Storage Other Than Incidental To Transit - Goods Held In Storage Upon Customers Request Non Freight Services - Do Not Offer Gold Service For Any Services Provided Without Freight Static Cover - Do Not Offer Gold Service For Goods Whilst On Display At Third Party Locations M.O.A - Additional Limitations / Penalty Excess (Do Not Offer Gold Service Without Prior Approval) Third Party Pick Ups - where the Franchisee does not sight or handle the customers goods Packed By Customer - where the Franchisee does not inspect & approve goods / packing Postal Items, Mail Or Documents - Including Reports, Titles, Certificates, Legal Documents Home Delivery / Authority To Leave 17 PACK & SEND – Procedure Summary AU 2010

18 Marine Insurance Facility - Gold Service Warranty ** Refer to section 9 of the PACK & SEND Consignment Note Conditions of Contract ** It is the intention of the PACK & SEND Franchisees to offer all customers Gold Service in accordance with the consignment note conditions of contract. Do not offer Gold Service without using a fully completed consignment note. Not only is Gold Warranty a great way to offer your customers protection against the rigors of transportation, but a good tool for a Franchisee to add value and raise profit margins. PACK & SEND Franchisees must not offer to arrange insurance or advise on insurance. It is an offence to offer to arrange or advise on insurance if you are not a holder of an Australian Financial Services License or an Authorised Representative of a Licensee. Instead your PACK & SEND consignment note conditions of contract facilitate the option of offering Gold or Silver Service to customers. Gold service provides a loss and/or damage warranty to customers (not insurance) for the market value of the goods being sent. When Gold Service is provided to customers PACK & SEND Franchisees will be individually accepting responsibility for the loss or damage to customer’s goods as detailed on the consignment note. PACK & SEND Franchisees will in turn rely on the PACK & SEND Marine Insurance Facility to indemnify them for amounts they become libel to pay to customers. It is therefore imperative for Franchisees own protection, that a consignment note is issued and completed in full for each consignment and that the full market value of customers goods is declared for every consignment. Important – Trade Practices / Fair Trading Laws The structure of the PACK & SEND Marine Insurance Facility contemplates the provisions of the Trade Practices Act whereby the disclaimers and warranties contained in the PACK & SEND conditions of contract may not effectively disclaim liability against loss or damage to customers goods. These issues specifically and predominantly apply to “consumer goods / consumer transactions” consigned under Silver Service. Cover under the PACK & SEND Marine Insurance Facility therefore provides blanket cover up to the standard limits for all consignments (either Gold or Silver) this provides trading flexibility and ensures Franchises are reasonably and consistently protected whilst undertaking either commercial or consumer transactions. Goods consigned under Silver service are automatically included under the blanket cover. Whilst it should be the Franchisees intention not to indemnify (accept liability for, or pay for losses to) customers under the Silver Service, cover can be called upon under commercial discretion and if required to do so at law. This is referred to as “call up cover” and is always subject to the standard policy limits and to the verification of all reasonable considerations of the facts involved (refer to the M.O.A.). 18 PACK & SEND – Procedure Summary AU 2010

19 Marine Insurance Facility - Consignment Notes (Refer to Front & Rear of the PACK & SEND Consignment Note) The laws pertaining to the handling of freight within Australia and Internationally are complex. Common law, tortious laws, contractual laws and statutory laws apply. International treaties together with differing laws of many countries also apply. Once goods leave your possession your control of the their destiny is somewhat lost, hopefully the goods will arrive at their destination, undamaged. This creates a mine field of exposures to business involved in the handling of freight. As such, the freight industry operates with the use of contractual terms and conditions that endeavour to define and clarify the responsibilities being undertaken. The use of terms and conditions endeavour to provide you with certainty, security and legal protection. This is why you must always use a consignment note. The PACK & SEND consignment note provides a facility to provide either Gold or Silver service or a combination of both should the need arise. Care must be taken when completing the Consignment note, all goods should be clearly and accurately described and valued on the consignment note. Customers signatures must be obtained in all instances to ensure that agreed terms of service have been acknowledged and accepted by the customer. If the customer is unable to sign the consignment note in person “the Franchisee” will send the front and back of the consignment note for signing prior to providing the service. This also applies for post, fax, e-mail, telephone and annual agreement letters. Correct issuance of consignment notes together with adherence to proven procedures will ensure that all details of the goods being carried and your terms of trade are established at the commencement of your service contract. 19 PACK & SEND – Procedure Summary AU 2010

20 Marine Insurance Facility - Conditions of Contract Why is it so Important to have the Consignment Note Fully Completed and Signed? When a customer signs the consignment note, they are agreeing to scope of service provide on the front of the consignment note and to the terms and conditions on the back of that consignment note. Customers will have a clear understanding of your terms of trade. The consignment note provides you with protection at law. This translates into satisfied customers and safe business practices. Failure to have a consignment note fully completed and signed will usually render the Franchisee fully responsible for any loss of whatsoever nature regardless of liability. Consequently there may be no defense available to the Franchisee or their insurers. This scenario must be avoided to ensure adequate protection exists at law. In the event of a claim, the insurer needs to see that the customer agreed to the terms and conditions on the back of the consignment note before agreeing to settle a claim. We anticipate that whilst running a busy PACK & SEND franchise, there may be a time where you fail to issue or fully complete a consignment note. This does not necessarily mean there is no cover, it will constitute a breach of procedures culminating into a penalty excess. If procedural breaches are reckless or intentional the insurer may be positioned to decline indemnity under the policies. To see more information on the penalty excess’ refer to page 25. The consignment note will identify the market value and type of goods and assist you to identify any need to make special insurance arrangements to protect your exposures to loss or damage of Customer goods. The policies in place cover market value as follows "the insured goods are agreed to be valued at invoice cost or value or, if there is no invoice cost or value, at the market value or at the cost, at the time of commencement of transit, of replacing the insured goods by similar goods of same age or condition, limited to the sum insured“. It is important that Franchisee have customers declare the full market value of their goods when Gold Service is being selected. This will ensure that PACK & SEND Franchisees collect the appropriate fees for the actual risks being accepted and will ensure that customers can receive adequate payment for claims Franchisees must warn customers of the existence of clause 9.C.II. on the rear of the consignment note which imposes an averaging clause for settlements where goods are under valued. 20 PACK & SEND – Procedure Summary AU 2010

21 Marine Insurance Facility - Risk Management Particular care should always be exercised when offering Gold Service or simply when accepting certain types of customers goods, especially the goods listed in the special consideration category. The goods in this category have a high propensity to incur loss or damage. The Items listed in this category below are covered by the PACK & SEND policies, however, caution should always be exercised. If there are excessive claims / losses incurred by the insurer the value of the cover provided will diminish due to increased overall premiums and / or reduced benefits. All PACK & SEND Franchisees are encouraged to consider individual exposures to the risks of loss and / or damage. Franchisees should be cautious with decisions to accept liability for some goods. Franchisees may need to consider the type of packing, choice of carrier, mode of transport and all other logistical matters in order to manage and reduce the risk of loss and or damage. Goods Which Require Special Consideration and Applicable Clauses Household Removals (Furniture, Antiques, Artworks Clause 9.c.v) (Co-Insurance Clause 9.c.ii) Items Of High Value (Co-Insurance Clause 9.c.ii) Antiques (Furniture, Antiques, Artworks Clause 9.c.v) Collections (Pairs & Sets Clause 9.c.iii) (Furniture, Antiques, Artworks Clause 9.c.v) Curios Or Works Of Art (Pairs & Sets Clause 9.c.iii) (Furniture, Antiques, Artworks Clause 9.c.v) A valuation certificate not more than 3 years old should be sought from customers for any antique, collection, curio or work of art, valuations will avoid disputes after loss or damage occurs Machinery & Electronic Equipment – (Mechanical or Electronic Malfunction Clause 9.a.v) High Risk Items - Special Consideration Items of a fragile nature (Insufficiency of Packing Excess - M.O.A) Motor Vehicles Of All Kinds (Precondition reports / digital photos required prior to acceptance) Cigarettes And Other Tobacco Based Products Liquor, Wine & Spirit Other Special Consideration (Do Not Offer Gold Service Without Prior Approval) Packed By Customer - The goods must either be personally packed by Pack & Send or approved by Pack & Send.(For pre-packed goods to be approved Pack & Send must inspect the goods to confirm they exist and are in good condition, and also ensure that appropriate packaging has been applied.) (Insufficiency of Packing Excess - M.O.A) Third Party Pick Up - is when a Pack & Send Franchisee has not either handled or sighted the goods at the pick up location prior to the goods being moved. Temporarily Stored Goods - during transit (ie. going to several destinations) such as display goods, where the goods may be stored for a period of time that is not incidental to their transit. Special arrangements must be made to arrange static cover for customers goods. 21 PACK & SEND – Procedure Summary AU 2010

22 Marine Insurance Facility - Premium Calculations The cost of Marine Transit & Marine Cargo to Franchisees is a percentage rate of their own annual Store Turnover. Keep the rate in mind when budgeting, quoting and pricing. The current rate is 1.50% plus other charges. It is safe to assume a total rate of around 2.0% this allows for GST, Brokers fees and other charges. The cost of Freight Forwarders Liability to Franchisees is approximately.165% of their own annual Store Turnover, this is charged in addition to the Marine Transit & Marine Cargo, and is subject to a minimum charge of $138 plus charges. Premiums will be charged annually up front (premiums can be arranged on an instalment program). The premiums are based on each Franchisees estimated Store Turnover including total Packing Sales as provided to us by PACK & SEND Head Office. Premiums will be adjusted at the end of the insurance period based on PACK & SEND Head Office declaration of actual Store Turnover including total Packing Earnings. There is no need to account for insurance charges for each transaction as you go, except for consignments over the blanket limit ($25,000) or for excluded items. These will need to be accepted, invoiced and paid for individually on a case by case basis in accordance with the additional top up cover requirements. Consideration ought to be given to the applicable rate you pay when assessing your customer charges. Remember you are paying for all consignments whether your customer elects Gold or Silver Service. Low Claim Bonus discounts have been incorporated into the costing methodology and are designed to encourage all individual Franchisees to mitigate losses and claims. The standard low claim bonus discount applies to any Franchisee that has incurred lower than 50% loss ratio for the previous full years trading. Currently the low claim bonus discount is a 20% reduction off the standard rate. An additional 10% low claim bonus discount applies to stores which have maintained a loss ratio of less than 50% for the previous 3 qualifying years. **All Marine Policies are subject to a common due date of 1st March each year for all Franchisees, regardless of when the store is opened. Your premiums will be pro rata (short termed) to ensure your premiums reflect only the time you are trading.** 22 PACK & SEND – Procedure Summary AU 2010

23 23 Marine Insurance Facility - Online System Over $25,000 PACK & SEND Franchisees have blanket cover for any consignment up to $25,000. For those jobs that are over the $25,000 blanket cover limit, an online system is provided to PACK & SEND Franchisees for registration of every consignment over the blanket cover limit, whether it be under Gold Service or Silver Service. Consignments over the $25,000 limit that are to be sent on Gold Service, will incur an extra premium which the system will calculate. Alternatively, if it is being sent on Silver Service, you simply need to register it online for monitoring and risk management purposes. The online system will; Provide 24 / 7 access to pricing and acceptance of most consignments over $25,000 Guide the risk management requirements for higher risk items Help reduce risk translating into lower future costs Identify procedural requirements to assist Franchisee compliance Distribute costs for higher risk items on a user pays basis Maintain more consistent pricing and acceptance criteria Allow analysis of results for ongoing planning and management purposes The system will walk you through 10 steps where you will be asked a range of questions such as the type of goods, destination, packaging and value of the items. The system takes around 2 minutes to register or quote a consignment, and once completed, a quote will be shown and saved on the system. The saved quotes will be available for you to recall and register at a later date without re-entry of the details. If you lose your password or user name, its easy! The online system has a function that can re- issue your password straight to your email within seconds! PACK & SEND – Procedure Summary AU 2010

24 Marine Insurance Facility - Online System Over $25,000 As shown above and below, the system guides you through questions which are relevant to registration or calculation of extra costs for Gold over $25,000. 24 PACK & SEND – Procedure Summary AU 2010

25 Marine Insurance Facility - Cover Summary 2010 Memorandum of Agreement The Marine Transit, Cargo and Freight Forwarders Liability policies are subject to the conditions outlined in the “Memorandum of Agreement” (M.O.A). The M.O.A is attached separately with this presentation. All PACK & SEND Franchisees sign off the M.O.A at the commencement of their policy term. The M.O.A confirms that Franchisees acknowledge and agree they have a full understanding of the procedures, limits and conditions applying to the PACK & SEND Marine Insurance Facility. The M.O.A also imposes penalty excesses for claims where Franchisees do not adhere to the minimum procedures applicable as listed below. Please contact us immediately if you require clarification of the conditions outlined in the M.O.A. M.O.A - Standard Excess’s and Additional / Penalty Excess’s Are known and understood by “the Franchisee” and its employees as follows; $ 250Standard Marine Transit and Marine Cargo excess for each and every claim $1,000Standard Freight Forwarders Liability excess for each and every claim $1,000Excess applies when a claim is lodged and the cause of the damage has been attributed to insufficient packaging by “the Franchisee” its employee’s or any other person employed for the purpose of packing the goods or the customer if self packed items are accepted by “the Franchisee” $1,000Excess applies to all “call up cover” claims where Gold Service has not been taken out by the customer prior to acceptance and carriage of the goods $2,500Excess applies when a PACK & SEND consignment note has not been issued, fully completed or signed by the customer. (Applicable to Gold or Silver service claims lodged for consignments within the blanket limit of $25,000) $5,000Excess applies when a PACK & SEND consignment note has not been issued, fully completed or signed by the customer. (Applicable to Gold or Silver service claims lodged for consignments over the blanket limit of $25,000) $5,000Excess applies to any claim lodged under Freight Forwarders Liability where the value of goods accepted under Silver Service exceeds the standard “blanket limit” of $25,000 and registration of the consignment has not been lodged by “The Franchisee” with “the Insurance Broker” prior to accepting the goods for transit $5,000Excess applies to any claim lodged under Freight Forwarders Liability where the value of goods accepted under Gold Service exceeds the standard “blanket limit” of $25,000 and a special arrangement extension of cover has not been specifically pre arranged by “the Franchisee” with “the Insurance Broker” prior to accepting the goods for transit. 25 PACK & SEND – Procedure Summary AU 2010

26 Marine Insurance Facility - Cover Summary 2010 Marine Claims Procedure PACK & SEND Franchisees are responsible for all service to their customers and are required to conduct all communications directly with their customer in administration and settlement of claims. Upon submission of a completed claim we will administer settlement of the claim between the insurer, the franchisee and their customer. The claim process is as follows: When a customer reports loss or damage to the PACK & SEND Franchisee, they are to document all details given to them in respect of the damage etc. Report the claim to Sear Insurance Brokers immediately. It’s important at this stage of the claim that the PACK & SEND franchisee needs to request the customer hold the goods and packaging for inspection, obtain thorough digital photos of damage, arrange quotes for repairs or replacement (depending on the extent of the damage) and send a loss or damage report form to their customer for completion and return. PACK & SEND Franchisees then collect all relevant transport documents such as consignment notes, airway bills, bills of lading, packing lists if applicable and proof of delivery to support the customers claim. PACK & SEND Franchisees should then forward all documents directly to Sear Insurance Brokers for consideration. It is important to have all your documents ready when submitting the claim to ensure a speedy settlement process. Sear Insurance Brokers will evaluate the documents and circumstances and will make recommendations on any additional matters that may require consideration and will lodge the claim with the insurer If all matters are clear and the loss can be assessed and finalised based on the documents provided Sear Insurance Brokers will confirm with the PACK & SEND Franchisee that settlement will proceed At this stage if any issues are identified that require further consideration prior to settlement such as any Items not covered, matters relating to settlement quantum, procedural problems, delays or other matters such as consequential loss, arrangements will be made for independent assessments, investigations or representation for and with the PACK & SEND Franchisee collectively with the insurer If any issues are identified in respect of settlement at this point consideration of lodging a claim under the Freight Forwarders Liability policy will be given in an endeavour to fully indemnify the Franchisee Upon the insurers agreement to settle Sear Insurance Brokers will prepare a deed of release and provide same to the Franchisee for execution by their customer (claimant) in preparation of settlement When the Franchisee returns the deed of release, the Franchisee must also forward the excess payment (usually $250) to the insurer via Sear Insurance Brokers. Upon receipt of the duly executed deed of release Sear Insurance Brokers will arrange settlement cheques in favour of the PACK & SEND customer (claimant) which will be sent directly to the PACK & SEND Franchisee who will then in turn pass on to their customer If the PACK & SEND Franchisee has already indemnified the customer (claimant) or if the customer has accounts outstanding with the Franchisee settlement cheques can be directed accordingly if advised. 26 PACK & SEND – Procedure Summary AU 2010

27 Claims Procedure At A Glance Damage is Reported to P+S by customer Additional Information Requested from customer by P+S Report Form sent to customer Photos of Damage, Quotes for repair/replacement and a completed Report Form received from customer **To Be Completed By The Customer Not The Franchisee** P+S organise all consignment documents such as the con note, carriers con note, packing lists, customs declarations etc. and report the claim to sear Insurance brokers Once The Customers Documents Are Received At this point you should have gathered all documentation required for submission to Sears Submit all information to Sear Insurance Brokers at Sears for assessment of the claim. Once the claim is lodged, Sears will advise if any further information is required. As some claims can get quite complicated, more documentation may be needed to come to an appropriate decision. If further info is required, again send it to Sear Insurance Brokers for further assessing. Sears will assess all details and submit the claim to the insurer with a suggested settlement price. The insurer will then need to approve the suggested settlement. Once settlement has been approved a deed of release and EFT form will be sent to P+S. The customer fills in the EFT form so the settlement can be transferred, and the deed of release is signed by both P+S and the customer. Once they are returned, the funds are arranged to be transferred. 27 PACK & SEND – Procedure Summary AU 2010 If it’s a straight forward claim:

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