Riskex - Insurance Online News

Sun, 19 August 2007
MBF To List On ASX
MBF Australia said it intends to demutualise and list on the Australian stock exchange in an attempt to grow and diversify its business. The health insurer said its plans have been endorsed by the MBF Council. It said a share market listing is likely in calendar 2008. The board believes that demutualising is in the best interests of policyholders, that it will maximise MBF's future growth potential and enhance its ability to compete in a rapidly changing environment," chairman John Conde said.

Thu, 20 December 2007
What is Liability?
Public Liability (sometimes known as General Liability) is part of the law of torts which focuses on civil wrongs. Applicants (the injured party) usually sues the respondent (the owner or occupier) under common law based on negligence and/or damages. Claims are usually successful when it can be shown that the owner/occupier was responsible for an injury therefore they breached their duty of care.

The duty of care is very complex but in basic terms it is the standard by which one would expected to be treated whilst they are in the care of another. An example of this is you are travelling by train, and the train derails because the wheel breaks. If you suffer an injury because of the de-railment of the train, and it can be shown poor maintenance caused the wheel to break, the owners will have breached their duty of care.

Once a breach of duty of care has been established an action brought against you in a common law court would most likely be successful. Based on the injuries and the losses of the applicant the court would award a financial compensation package.

In America, although the law is a little different many actions are brought against businesses for negligence. Sometimes these are very expensive and many businesses are forced to close as a result of this type of legal action. America is by far the most vicious country in the world for costly litigation.

In Asia the law has not developed to the same extent although the law does recognise negligence. Most professional are predicting this development to occur rapidly and within the next 10 years

In Australia the general public have become more conscious of their legal rights. In recent times businesses have been faced with more actions under common law this could be attributed to the press reporting cases where the settlements have been very high.

Other reasons why there has been an increase in claims could be due to the fallout from some states Workers Compensation freezes where limits have been put on claims for workers compensation making public liability a more financially attractive option. Whilst there is no avenue for anyone of your employees to claim against your public liability policy the following example shows how an employee from another business can be presented with an option to claim one or the other.

In the past an employee in another business may decide to buy their lunch in a shopping centre. If that employee slipped over and broke a leg in your business they may be able to claim on their employers’ workers compensation policy or your public liability insurance. As common law settlements are much higher than workers compensation pay outs there is a certain amount of attraction towards a claim against your public liability.

Another reason for increases in claims could be due to solicitors becoming more approachable to the public. Many solicitors now offer their first consultation for free. More recently some solicitors assess cases, and if there is a high probability of winning the case they may offer no win, no pay.

The Law And Public Liability

In the course of managing any property you are obliged to comply with laws and statutes administered by government and municipal bodies These bodies impose various liabilities which the property owner/manager should make themselves aware.

The most common examples of statute liability are in areas where you are required by law to effect insurance eg. workers compensation and motor vehicle compulsory third party.

Property, Hotel and Operations Managers should become familiar with the various types of contracts involved in commercial and retail activities. These cover a wide field but the more significant contracts are:

· the head lease or the management agreements

· tenancy and casual leasing agreements

· contracts with independent contractors for cleaning, lift and escalator maintenance, air conditioning and fire protection maintenance, etc.

The major contractual liability from an insurance viewpoint is undoubtedly found in Head Lease and Management agreements. These require the Manager or Head Lessee to fully maintain, repair and replace the property, if damaged, until expiration of the agreement or lease.

Furthermore the contracts usually require an indemnity to the Owner against liabilities imposed upon him for injuries and property damage arising out of the use, occupation or management of the property.

Every contract contains covenants imposing responsibilities on one or other of the parties. These should be carefully examined to ensure they are not unduly onerous.

The Degrees Of Duty Of Care

In the introduction it was explained that owner/occupiers are required to provided a certain level of care. The duty of care is not the same for all people. It is dependent on a number of issues. To assist in establishing the duty of care required it is more clear to divide into groups the individuals who your premises and for what reasons. If we take an example of a large shopping complex the following groups of individuals would be attract different levels of care.

Invitees

These are people who by some form you have invited into your complex. This invitation can be through marketing and advertising, or it can be implied simply because you are a shopping complex or your hotel. The greatest duty of care is owed to invitees who, in the case of shopping centres and hotels, are mainly customers, contractors and sub contractors. They are their because of the invitation you extend to them. The duty of care owed to them is relatively simple.

You must take reasonable care to ensure the premises are reasonably safe. They in turn must take reasonable care for their own safety.

If however an invitee spends money for a service ie forms a contract with you, your duty of care is increased. An example of this could be a games arcade where the invitee pays for a ride on a motor cycle game. If as a result of playing this game the invitee is electrocuted, you have failed in your duty of care and undoubtable will be found to be liable.

Without trying to complicate this issue the provider of the game will also be liable and the applicant my be advised to sue this supplier. Certainly if the injured person choses the sue you then you definitely have an action against the game supplier. It would also be expected that civil charges would be made against the game supplier.

Licensees

These are people who enter premises with the permission of the occupier but, unlike invitees, do so without any economic advantage to the occupier. They come in the hope of doing business with you or your tenants and include such people as salesmen, commercial travellers, etc. The duty of care owed to licensees are not quite as extreme as in the case of the invitees.

Trespassers

These are classified as people who intrude onto property without permission. The degree of care owed to trespassers, although slight, nevertheless exists particularly in situations where a source of danger is deliberately created or where small children are involved. An example would be where live wires where left exposed after the centre had closed . If some children entered the premises for some reason, despite that reason, if they were injured you would be liable

Types Of Claims

The most common types of claims fall into a small number of categories

slips trips and falls, make up the majority of claims

stress and anxiety, due to hold ups, elevator malfunction and

falling objects ie striking against or struck by

Common Accident Sites

Main thoroughfares and entry areas, - mostly slips trips and falls

Car parks, due to poor lighting, low headroom, slippery speed humps and painted surfaces, poorly maintained egress and access and ventilation - mostly slips trips and falls

Stairways, uneven surfaces, chipped or broken, loose articles left on stairs - mostly slips trips and falls

Hotel lobbies, baggage left at reception and customer trips over own or someone else’s bag - mostly slips trips and falls

Hotel owned restaurants, food on floor. Dance floors - mostly slips trips and falls

Hotel bathrooms usually falls in shower/bath. Can be very serious as often result in very serious outcome and sometimes death.

Swimming pools usually falls and common are diving into shallow water. Both of these injuries can be very serious as often result in very severe injury and sometimes death. Other injuries or death often occur as a result of heart attack and stroke and whilst these can be shown not to be in the control of the owner/occupier measures need to be in place to remove the threat of litigation from the point of view contributory negligence

Gymnasiums or health centres are areas where a variety of injuries occur from simple strain sprains to multiple injuries and even death. Once again there is a certain amount of responsibility carried by the user however negligence through poor signage of rules regulation and supervision may cause your business to be brought into a claim.

Bars and the local surroundings usually related to alcohol consumption, sometimes slips due to wet floors, objects, food or drink, and objects left on floor - or a combination of all of these.

Causes of accidents

Failure to report an existing unsafe situation

Failure to respond in a reasonable time frame

Poor or substandard repairs

Poor cleaning response times

Poor maintenance response times

Unsuitable storage of equipment

Poor maintenance, poor cleaning and or choice of products

Lighting, lux and shadows

Floor surfaces, Floor coverings

Travelators - trolley design, escalators

Poor design steps Vrs ramps

Pre-occupation by the applicant at the time of the injury, ie kids, life, pressure

Agency

Co-efficient of friction - the resistance of slip between the floor and a persons shoe.

Equipment not fixed at wall or floor ie bookcases

Windows, doors and display glass type

Uneven surfaces ie floor mat meets floor, carpet meets tiles

Water, oil or other spills

Environmental

Raining,

Windy,

Heat

Cold

Combinations of all of the above

High Risk areas

entry points

food halls

fruit shops

hot bread shops flour on floor

cake shops, pies hot display cases. Children Vrs adults

kids fast food areas, McDonalds

step into or step down into shops

grills or grates in walk areas (high heels)

car parks dry area before customer comes into centre

vendors and deliveries through public access way 

supermarkets near freezes and refrigerators

car parks

ramps

escalators

travelators

elevators

stairs and step

swimming pools

gymnasiums

children day care centres

uncovered areas which are thoroughfares, raining, public runs to next covered section

Determining liability

While ‘strict liability’ can be specified under contracts, or is required by laws such as those covering occupational health and safety or consumer protection, a public liability claim usually seeks financial compensation by arguing that the injury or loss sustained arose because of a breach of the ‘duty of care’ owed to the third party by the insured.

To succeed, an injured party needs to demonstrate:

    the existence of a duty of care;

    a breach of that duty; and

    material damage as a consequence of the breach of duty.

The existence and scope of duty of care is a matter determined by the courts applying common law principles. The Law Council of Australia said that:

… broadly, negligence requires someone who has a duty of care to take reasonable care to protect against forseeable harm. What is reasonable is decided on balancing the likelihood and severity of an injury that may occur on the one hand, and the cost and inconvenience of obviating that risk on the other hand.

Some states have recently passed legislation dealing with some aspects of public liability claims, including payouts and processes. But this aside, there is little legislative guidance as to how liability is to be judged and compensation determined:

Claims are dealt with under ‘common law’ principles established through a long history of case law and, if litigated, are made by way of civil actions in the relevant jurisdiction.

Consequently, the extent of damages and the matters considered in arriving at that estimate are also matters for the courts. The general principle upon which the courts operate is that:

… the damages to be recovered are in money terms no more and no less than the plaintiff’s actual loss.



Thu, 20 December 2007
Xmas Risks
If Christmas didn’t exist, would insurers invent it? I ask partly because someone may need to if my local paper’s survey of school nativity plays are anything to go by.

Of 35 schools surveyed, only a handful are putting on traditional Nativity plays; the rest vary from The Most Disgruntled Snowman to The Lucky Owl and The Hoity-Toity Angel. There’s even Hosanna Rock, featuring angels disguised as tax collectors.

At least even these have something to do with the traditional meaning of the festive period but the risks of Christmas have been growing in recent years.

Whether it’s a perceived fear of appearing politically incorrect or insufficiently ethnically diverse or a public liability worry about the town centre Christmas tree toppling over, the Christmas lights catching fire or unseemly behaviour at office Christmas parties, those 12 days carry more risk.

Or maybe they just seem riskier. After all, people have been taking risks at Christmas ever since the first one.

Did Mary and Joseph have travel insurance when they set out on that long road to Bethlehem?

What potential health and safety claims did that innkeeper let himself in for by renting out an unlicensed stable to a woman in the middle of labour?

And just how clever were those so-called wise men who ventured into the desert on unprotected camels carrying uninsured gold and valuable perfumes?

In comparison, our homely Christmas celebrations seem safe and secure but how many carol singers have personal liability cover when they venture onto expensive patios or fire risk cover when they carry lanterns or candles?

What about the risk of giving someone food poisoning by under-cooking the turkey or the danger of a sexual harassment lawsuit from giving someone a peck under the mistletoe?

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