Since becoming Managing Director of Milne Alexander in 1999, I have found the business both rewarding and challenging. What began as a family business has evolved into a larger, flourishing operation with a team of 24 staff and offices in Sydney and Port Lincoln.
Our business success is the result of tremendous commitment and dedication of our team, and their ability to adapt to growth and change. In the past few years, Milne Alexander has experienced remarkable change within the business, partly driven by our clients’ feedback and our ongoing relentless pursuit of continuous improvement.
At Milne Alexander we consider client feedback, positive or negative, crucial to ensuring we meet and exceed client expectations. It also allows us to modify and adopt different procedures and systems as required.
Every member of the team at Milne Alexander has been instrumental in bringing this publication together. Our aim is to provide you, our valued client, with topical and timely information covering:
- New insurance products
- General insurance news
- Various financial services available
- Staff profiles each issue
In this issue George Peros, a Director at Milne Alexander provides you with a guide on Management Liability. This is a relatively new product in the Australian insurance market therefore it’s frequently being refined by Underwriters. Even if you’re familiar with Management Liability, George’s guide will provide you with a general overview of the product AND important details of recent options available.
Healthy cash flow is critical to any business. Rob Martin of MSM Loss Management offers an invaluable article, explaining the impact a fire or material loss can have on your business and what you need to know about Business Interruption. Latest research on the subject by Insurance Council of Australia revealed that Small & Medium Enterprises made up 17% of GDP, employed 2,500,000 people, yet 42% had NO business interruption insurance.
Among the key changes at Milne Alexander was the appointment of Jessica Donald as our dedicated Claims Administrator in June 2009. We understand the importance of providing an experienced claims service. In this issue we include details about our Claims Service and introduce Jessica Donald in the first of our team profiles series.
With the majority of workers compensation policies in New South Wales falling due on the 30 June, we thought it timely to provide a Question and Answer summary on NSW Workers Compensation.
We are committed to providing quality Financial Services to our clients through access to professionals who are experts in managing business finances. In November 2009 we formed a strategic alliance with specialist finance broker, Finlease to provide our clients with access to a comprehensive range of business financing services. This includes business and personal assets, from motor vehicles to charter boats, aircraft financing to plant / equipment and all types of property. During tougher economic times it’s even more essential to understand ‘How to achieve greater flexibility with your business finance’.
Over the coming months, we’ll be asking for your feedback via a brief two minute client survey aimed at finding out what you, our customers can contribute to enhancing our operation further. I give my personal guarantee that I will address any issues as and when they may arise. And if you want to report great service by one of our team we’d love to hear that too.
Please feel free to contact me directly on (02) 92794399 should you wish to discuss any aspects of your contact with Milne Alexander.
Best regards,
Darren Milne
Managing Director
If you’re a Director or Officer of a business in Australia then you would or should know of the personal exposures you have in relation to the management of your business. Exposures or threats come from various sources including claims from shareholders, employees, regulators, competitors, customers, suppliers, creditors, environmental groups and more.
Whilst many businesses thoroughly insure their exposures to property loss and damage or Liability exposures, many businesses overlook their economic exposures to the management of their business.
Insurers have advised that the recent financial crisis has resulted in an increase in claims reported to them. Whilst many larger companies have their management teams fully protected it is a timely reminder for SME businesses to consider protection for themselves.
Several Insurers in Australia have developed Management Liability products which essentially offer a suite of covers bundled into one easily administered package to address the exposures of Directors and Officers of SME businesses. Traditional Directors’ & Officers policies designed for public companies generally do not cover the company itself whereas the Management Liability polices being offered extend to include cover for the business entity along with many other exposures.
Covers generally bundled into Management Liability policies include Directors’ & Officers, Company/Entity cover, Employment Practices Liability, Fidelity/Crime covers, Trustees Liability, Statutory Liability, Crisis Cover, Kidnap & Ransom Covers, Internet Liability and some Insurers can also include Miscellaneous Professional Liability as part of their package.
As you could imagine each insurer would have a slightly different suite of covers bundled into their package and this is where Milne Alexander can assist you in sourcing the right package for your specific needs and exposures.
You can find a very simple explanation of the risk to your business, for the main sections read more.
The life blood of a successful business is a healthy cash flow. Products are produced and sold, or services provided; wages and other overheads and expenses paid; profits made. Impede or stop the process, even temporarily and like a plant denied water, or a heart of blood circulation, the business suffers. If the interruption is severe enough it may never recover if there is not sufficient capital to call on during the lack of cash flow.
Business interruption insurance is not a guarantee of prevention and cure of all the calamities that can beset a business, but it is the means of ensuring that the policyholder will have the security of available money to pay ongoing business expenses, retain trained, experienced key employees, recover any additional expenditure on loss mitigation and to receive payment of the net profit which the business would have earned had the interruption not happened. Basically, the policy is a true example (or should be) of indemnity.
Therefore, if insurance is not arranged on the basis of insuring ongoing expenses which are those that cannot be avoided (i.e. ‘fixed’ costs) as they have to be paid whether the business operates at 10% or 100% capacity, plus the future trading net profit the business would have earned during the interruption, then there will not be an appropriate indemnity. If the policy is not properly arranged to suit the needs of the business, it will prove to be inadequate and will not meet the expectation of the insured when it is required to deliver the product purchased.
At Milne Alexander we can assist you to put together your Business Interruption Insurance which will give a business the best chance of survival when an insurable major loss occurs.
- BI insurance is an essential and important part of any client’s insurance program
- BI insurance is more critical to business survival than property or liability insurance protection. Assets insurance alone is inadequate by itself. Financial losses can exceed the value of Material Damage losses. Large financial loss can eventuate from a low value material damage item
- Research of fire losses in Australia shows that 43% of businesses suffering a major fire (not necessarily a total loss) never re-open for business. Despite some form of insurance, 28% fail within 3 years. Only 29% survive.
- Research by ICA revealed that SMEs made up 17% of GDP, employed 2,500,000 people, yet 42% had no business interruption insurance. Surprisingly, 17% had no insurance – that is nearly 1 in 6 of SME businesses!
- It is estimated that of those insured, 40% are severely underinsured and 15% significantly underinsured.
- SME’s have limited access to financial resources; are likely to be highly geared with directors having given personal guarantees to secure loans making SME’s survival vulnerable if not insured adequately.
- Basic concept of BI insurance is simple but arranging cover appropriate to the exposure is a complex undertaking
- The complexity leads to inadequacies in the policy responding to claims
- Problem areas are revealed when a claim arises
Some general questions and answers about NSW Worker's Compensation.
Our new alliance with finance broker Finlease could yield some significant benefits for all Milne Alexander clients. Finlease is a finance broker that employs a very hands-on approach in actively scouring the market for business finance from a range of lenders, giving you preferential rates and terms, and greater flexibility for future loan needs. After numerous upheavals in banking systems, credit is tight and employing the services of Finlease can really pay off.
As Finlease principal ‘Mark O’Donoghue explains, “Spreading your loans across different financiers means you’re not overly geared with any one lender. Also, the banks typically will want real estate as security for your business loan, and that can severely restrict your options in the future.”
In addition, recent banking research has highlighted how the banks are not looking after their small to medium sized business clients very well. Surveys have also shown that an increasing number of smaller businesses prefer to have a Relationship Manager to handle all their dealings with their bank.
The banks have also been quite mercenary during the troubled times of 2009, while rates were falling last year many smaller businesses actually reported rate increases on their loans.
On the other hand Finlease have been in operation for around 20 years and their brokers tend to stick with a given client over many years, not just months. This allows Finlease to build up quite a history with their clients. They take the time to understand a business’s unique financial needs and can recommend meaningful solutions that will prove effective based on this bank of knowledge. Read more
At Milne Alexander we offer a personalised claims service for all our clients, including workers’ compensation claims management. In addition we can tailor or design a claims procedure specifically for your business to meet your requirements.
We provide claims training for our client's staff and access to underwriter training in such areas as business interruption and workers compensation claims. We understand the importance of efficient and professional claims service and management, that is why we have appointed a dedicated Claims Administrator. 
Tell us about Jessica Donald
I have been at Milne Alexander for nearly four years and for the last three years I’ve been assisting one of our account managers in our commercial division. I was promoted to Claim Administrator in June 2009.
During my time at Milne Alexander I have completed my Tier 1 qualification and I am currently completing my Diploma Financial Services (Broking).
I provide assistance and guidance to our clients through the whole claims process. This ranges from assisting with the completion of the claim form to providing advice on what to do to prevent further loss or minimise/avoid further damage, to ensuring fast claims settlement. I also provide guidance with obtaining quotes for replacement items or where to tow a damaged vehicle. I liaise with the underwriters, loss adjusters and assessors, to ensure the whole claim process is as stress free and timely as possible. I provide regular updates on claims progress and negotiate claims settlement to ensure the best outcome for our clients.
On the more complex claims I meet with the Account Manager on a regular basis to keep them informed on the progress on the claim and to discuss appropriate claims management strategy.
It is challenging but with provides great satisfaction. I appreciate that at the time of a loss, damage or accident it can be very stressful and I do find it very rewarding to be able to assist with the whole claims process to ensure that lodging a claim is seamless and stress free.
Receiving feedback from happy clients is also very rewarding. Recently I received this feedback;
"I really appreciated your advice and personal warmth you offered me, so many companies have become impersonal and stale and it was a real pleasure to speak with somebody who cares and has a personality and a professional attitude.
I trust you will have a happy, relaxed and pleasant Easter break".
Best regards,
David Proudman
By John Fitzpatrick, Solicitor Director, Sydney Legal Advisers - May 2010
People of all walks of life often leave their wills and estate planning to the last minute and often their estates are not set up to represent their best wishes or set up in the right way.
It is imperative that people realise how important this aspect of estate planning is. Have you established your estate to represent your wishes, set up trusts for your loved ones to ensure that their wellbeing is taken care of in the manner that you wish? Have you considered the outcome of the Family Provisions Act or the outcome of a prenuptial agreement and whether this agreement is binding?
Read the full article on the updates to Estate Planning & Wills here
Sydney Legal Advisers of Level 7, 117 York Street, Sydney NSW 200 is a small boutique law firm located in the heart of the Sydney CBD. Established in September of 2008, we strive to provide our clients with the best possible advice and outcome in all areas of law that our clients require. Sydney Legal Advisers specialises in various fields of law from Commercial and Business Law to Property and Estate Planning Law.