More than half (53.3%) of all Australian small businesses expect to grow in 2024, according to research released by accounting body CPA Australia. This is great news for the many dynamic entrepreneurs running these exciting ventures.

As your business grows and evolves, so could your insurance needs. Expanding your business, whether by increasing the scope of your operations, hiring more employees or opening a new location, may require careful consideration of your insurance coverage.

Ensuring you have the right insurance policies in place is crucial, even for home businesses, to help protect your growing investment and mitigating potential risks.

1. Review current policies

The first step in ensuring adequate coverage when your business is growing is to review your existing insurance policies.

The idea is to look into your current general liability, property and business interruption insurance policies to determine if they still meet your business’s needs. Expansion can often increase exposure to risks, so your existing coverage limits may no longer be sufficient.

2. Identify new risks

Growing your enterprise could introduce new risks your current policies may not cover. For example, opening a new location may expose you to different environmental hazards, customer demographics or regulatory requirements. Identifying these new risks would help you to work out the extra cover you need to protect your business.

3. Update your insurance

As your business expands, it’s often crucial to fortify it with the right insurance policies.

• General public and product liability insurance can help shield you against the cost of third-party claims of bodily injury or property damage, helping to protect your business financially from potential lawsuits.
• With growth often comes the acquisition of new assets, making commercial property insurance vital to help safeguard your buildings, equipment and inventory from perils like fire, theft, and natural disasters.
• Don’t forget business interruption insurance, which can be a financial lifeline during any unforeseen events which may halt your operations.
• As your workforce grows, you will also need to ensure your workers’ compensation insurance is still adequate, providing essential benefits to employees injured on the job and to help shield your business from the cost of legal actions.
• In the digital age, cyber insurance is a must-have, to help guard your business against the cost of cyberattacks and data breaches that could compromise sensitive information and customer trust.

What’s important is to tailor your insurance strategy to your expanding business needs, so you can navigate your growth journey with confidence.

Tips for managing insurance during expansion

It’s easy to let your insurance requirements fall down your to-do list when you’re expanding. But this can increase your business risks at a time when you need to be working on the business rather than managing a claim.

As your business continues to grow, regularly reviewing and updating your insurance policies is essential. So make it a priority to do a yearly insurance audit to assess your coverage needs and make adjustments to your policies as necessary.

An experienced insurance broker can give you valuable guidance as you navigate the complexities of expanding your business, helping you to identify coverage gaps, recommend appropriate policies and negotiate competitive rates.

Talk to an AIB insurance broker today to ensure you have a comprehensive insurance strategy that aligns with your business goals.

Important notice

This article is of a general nature only and does not take into account your specific objectives, financial situation or needs. It is also not financial advice, nor complete, so please discuss the full details with your Steadfast insurance broker as to whether these types of insurance are appropriate for you. Deductibles, exclusions and limits apply. You should consider any relevant Target Market Determination and Product Disclosure Statement in deciding whether to buy or renew these types of insurance. Various insurers issue these types of insurance and cover can differ between insurers.

Steadfast Group Ltd ACN 073 659 677

Important notice – Steadfast Group Limited ABN 98 073 659 677 and Steadfast Network Brokers

This article provides information rather than financial product or other advice. The content of this article, including any information contained in it, has been prepared without taking into account your objectives, financial situation or needs. You should consider the appropriateness of the information, taking these matters into account, before you act on any information. In particular, you should review the product disclosure statement for any product that the information relates to it before acquiring the product.

Information is current as at the date the article is written as specified within it but is subject to change. Steadfast Group Ltd and Steadfast Network Brokers make no representation as to the accuracy or completeness of the information. Various third parties have contributed to the production of this content. All information is subject to copyright and may not be reproduced without the prior written consent of Steadfast Group Limited.

You may be paying for insurance, but if you’re underinsured, you could be taking a big risk.

In the case of a disaster, you might have to pay the balance between the amount insured and the actual costs. For example, if the cost of replacing your building and contents is $4 million but they are insured for $3 million. In this scenario, if the building were destroyed by fire, you could be $1 million out of pocket.

Even if the cost to repair the damage is less than $3 million, your claim may not be fully reimbursed.

“Many insurance policies include a co-insurance clause,” says Michael White, Broker Technical Manager for Steadfast Group.

“This is triggered if you’re insured for less than the full value of the property. In very broad terms, it reduces the amount of the claim by the percentage by which you’re underinsured.”

So, with the example above, if the damage amounts to $2 million, you may not be reimbursed for the full cost of repairs.

How to find out whether you’re underinsured

To find out whether you have adequate cover, you can check your policy limit, which is the amount you’re covered for.

You can then compare this with the replacement cost of your building or other asset.

The Insurance Council of Australia provides free online calculators that may give you an idea of the replacement value of your property.

“These are just a guide, particularly if your building has any unusual features. A valuer will provide a much more accurate assessment of the value of your building and any other assets such as machinery covered by your policy,” White says.

You can also use AIB’s free online insurance quiz to see if you need to update your policy and we offer a free policy review tool too.

What can you do if you think you’re underinsured?

Your AIB insurance broker can help you to identify everything your business depends on to operate and assist you to find the most appropriate cover.

“Every business is different, and your insurance should be tailored to your needs,” says White. “You need to be sure you’re not left vulnerable in certain areas or paying for cover you don’t need.”

Once you’re fully covered it’s often vital you review your insurance every year.

“Your business is evolving, and replacement costs are changing all the time,” says White. “For instance, a piece of machinery you bought four or five years ago might cost a lot more to replace than you paid, and your insurance needs to reflect that.”

Essential insurance protection

Many small businesses are underinsured by accident. You may have misunderstood what’s needed, miscalculated the value of your assets, or underestimated how much your business has grown.

Or perhaps you’ve simply been so busy that checking your insurance cover slipped down your list of priorities.

It’s understandable, but it could also be disastrous if you don’t realise you’re underinsured until you make a claim.

The risk is you could lose everything you’ve worked so hard for, including your business. For peace of mind, talk to your AIB broker about the best way to ensure you are not underinsured.

 

Important notice

This article is of a general nature only and does not take into account your specific objectives, financial situation or needs. It is also not financial advice, nor complete, so please discuss the full details with your Steadfast insurance broker as to whether these types of insurance are appropriate for you. Deductibles, exclusions and limits apply. You should consider any relevant Target Market Determination and Product Disclosure Statement in deciding whether to buy or renew these types of insurance. Various insurers issue these types of insurance and cover can differ between insurers.

Steadfast Group Ltd ACN 073 659 677

Important notice – Steadfast Group Limited ABN 98 073 659 677 and Steadfast Network Brokers

This article provides information rather than financial product or other advice. The content of this article, including any information contained in it, has been prepared without taking into account your objectives, financial situation or needs. You should consider the appropriateness of the information, taking these matters into account, before you act on any information. In particular, you should review the product disclosure statement for any product that the information relates to it before acquiring the product.

Information is current as at the date the article is written as specified within it but is subject to change. Steadfast Group Ltd and Steadfast Network Brokers make no representation as to the accuracy or completeness of the information. Various third parties have contributed to the production of this content. All information is subject to copyright and may not be reproduced without the prior written consent of Steadfast Group Limited.

When you’re working in the gig economy you have the flexibility to choose the days and hours you work. There’s also a wide range of jobs on offer, from driving for a rideshare service, delivering food or providing household services, to working from home as a freelance consultant. But gig economy insurance protection is still a vital consideration.

“Some people work a few hours a week to earn extra cash while, for others, it’s their full-time occupation,” says Michael White, Broker Technical Manager at Steadfast Group. “Either way, as you’re self-employed, you’ll probably be responsible for most or all of your insurance cover.”

For your own safety, it’s vital that you understand the risks you face and make sure you have the right protection. Here’s some key points you should know to help you reduce your financial risk.

What gig economy insurance do you need?

These are the types of cover most likely to apply to you as a gig worker. The ones you need will depend on the type of work you do.

Public liability insurance can cover the financial cost of damage or harm you do to a person or someone else’s property.

“If you’re a cleaner, for example, you might break a valuable vase or, worst case scenario, accidentally set the house on fire,” says White.

Professional indemnity insurance is often important if you’re paid for advice. You could be open to a claim of negligence if a client believes that following your advice financially damaged their business.

Vehicle insurance can pay out if the vehicle you use for work is damaged or involved in an accident. When the gig economy was still relatively new, regular car insurance policies didn’t provide cover for the driving you did for business. However, many providers now include, or give you the option of adding, this level of protection – your product disclosure statement will have details.

Tools of trade insurance can help you to replace tools, equipment, and other business-related property if it’s damaged, lost or stolen.

Business interruption insurance may cover loss of turnover as a result of physical damage to the building from which you operate, as well as other specified events.

Workers’ compensation can help support workers who are injured at work. All employers must have workers’ compensation insurance for their workers but, as a gig worker, you may be classed as an independent contractor rather than an employee. Ask you your platform owner where you stand in regard to eligibility for status as an employee.

Look for specialised insurance

Insurers are starting to recognise the importance of the gig economy and we’re seeing more products tailored to its needs. Remember that, even in specialised areas, the cost, coverage and exclusions can vary widely. Compare quotes from a number of reputable insurance companies which have good customer reviews and a strong financial rating before you decide.

If you’re not sure, get help.

Insurance can be confusing. As a gig worker, you have a lot to think about when you’re looking for protection you can afford.

Your AIB insurance broker can recommend the right policies for peace of mind and financial security.

 

Important notice

This article is of a general nature only and does not take into account your specific objectives, financial situation or needs. It is also not financial advice, nor complete, so please discuss the full details with your Steadfast insurance broker as to whether these types of insurance are appropriate for you. Deductibles, exclusions and limits apply. You should consider any relevant Target Market Determination and Product Disclosure Statement in deciding whether to buy or renew these types of insurance. Various insurers issue these types of insurance and cover can differ between insurers.

Steadfast Group Ltd ACN 073 659 677

Important notice – Steadfast Group Limited ABN 98 073 659 677 and Steadfast Network Brokers

This article provides information rather than financial product or other advice. The content of this article, including any information contained in it, has been prepared without taking into account your objectives, financial situation or needs. You should consider the appropriateness of the information, taking these matters into account, before you act on any information. In particular, you should review the product disclosure statement for any product that the information relates to it before acquiring the product.

Information is current as at the date the article is written as specified within it but is subject to change. Steadfast Group Ltd and Steadfast Network Brokers make no representation as to the accuracy or completeness of the information. Various third parties have contributed to the production of this content. All information is subject to copyright and may not be reproduced without the prior written consent of Steadfast Group Limited.

Childcare centres play a crucial role in the early development of children, providing a safe and nurturing environment where they can grow and learn. However, ensuring the safety of children extends beyond physical care; it also includes protecting them from potential sexual abuse.

From a childcare insurance perspective, safeguarding against sexual abuse is a critical concern that requires a proactive and comprehensive approach. By implementing robust safeguarding measures, childcare centres not only protect the children in their care but also minimise potential liabilities and strengthen their position with insurers.

This guide aims to provide childcare centres with comprehensive strategies to safeguard children, ensuring their well-being and the trust of their families.

Understanding the Importance of Safeguarding

Sexual abuse in childcare settings, although rare, is a grave concern that can have lasting impacts on children, and even family members. It is vital for childcare centres to implement robust safeguarding measures to prevent such incidents. These measures not only protect children but also uphold the integrity and reputation of the childcare centre.

From an insurance perspective, safeguarding against sexual abuse in childcare centres involves a collaborative effort between the insurer, insurance broker and the childcare providers. We offer guidance, resources, and risk assessment tools to help centres implement effective safeguarding practices. Our shared objective is to create a secure environment where children can thrive, and childcare centres can operate with confidence.

Key Components of Safeguarding Against Sexual Abuse

1. Robust Recruitment Processes

   • Formal Interviews: Undertake formal interviews for all candidates, including volunteers and contractors, for positions involving work with children or vulnerable adults. Analyse past experience working with these groups.
   • Background Checks: Facilitate access to comprehensive background check services, including criminal record checks and working with children checks, to ensure all staff and volunteers are thoroughly vetted.
   • References: Verify references and previous employment by enquiring with at least two previous employers regarding the candidate’s suitability for the position. Contact at least two referees supplied by the candidate.
   • Employment Prohibition: Prohibit the employment or engagement of any person from working in your organisation if they have prior convictions relating to violent or sexually related offenses.

2. Comprehensive Training

   • Regular Training Sessions: Provide regular training on safeguarding policies, recognising signs of abuse, and appropriate responses.
   • Specialised Workshops: Offer specialised workshops led by experts in child protection and legal responsibilities.
   • Continuous Professional Development: Encourage continuous learning and staying updated with the latest safeguarding practices and regulations.

3. Clear Policies and Procedures

   • Safeguarding Policy: Develop and implement a clear safeguarding policy outlining the centre’s commitment to child protection, aligning with industry standards and legal requirements. Posting this policy on the centre’s website can help demonstrate to parents your commitment to child safety and transparency.
   • Code of Conduct: Establish a code of conduct for all staff and volunteers, detailing appropriate behaviour and boundaries. Define boundaries for interactions between staff and children to prevent inappropriate behaviour, such as tickling, cuddling, and sitting on laps, which can be considered grooming for sexual abuse.
   • Reporting Mechanisms: Create transparent and accessible reporting mechanisms for children, parents, and staff to report concerns. Actively encourage the reporting of sexual abuse and ensure that concerns are not dismissed when raised.

4. Creating a Safe Environment

   • Design and Layout: Ensure the physical environment is designed to promote visibility and reduce opportunities for isolated interactions.
   • Supervision: Maintain appropriate staff-to-child ratios and ensure constant supervision of children.
   • Open Communication: Foster an environment where children feel safe to express their concerns and parents feel confident to discuss their child’s welfare. Commit to being an environment where either a victim or employee/volunteer feels able to report sexual abuse.

5. Engaging Parents and the Community

   • Parental Involvement: Encourage parents to be involved in the centre’s activities and stay informed about safeguarding policies.
   • Community Awareness: Raise awareness within the community about the centre’s safeguarding measures and the importance of child protection.
   • Partnerships: Collaborate with local authorities, child protection agencies, and other childcare centres to share best practices and resources.

6. Monitoring and Evaluation

   • Regular Audits: Conduct regular audits of safeguarding practices to ensure they are effective and up to date.
   • Feedback Mechanisms: Implement feedback mechanisms for parents, staff, and children to provide input on safeguarding practices.
   • Incident Reviews: Review any safeguarding incidents thoroughly to learn and improve future practices.

Developing a Comprehensive Client Protection Policy (CPP)

An effective Client Protection Policy (CPP) is essential for any childcare centre to safeguard against sexual abuse. This policy should include critical risk controls and reference the 10 National Principles for Child Safe Organisations. Key components of the CPP should include:

1. Leadership & Governance

   • Commitment from Top Management: Ensure the centre’s leadership is committed to child protection and actively promotes a culture of safety.
   • Clear Governance Structures: Establish clear governance structures and accountability mechanisms for safeguarding.

2. Effective Policies and Procedures

   • Comprehensive Safeguarding Policy: Develop a detailed safeguarding policy that aligns with legal requirements and best practices.
   • Operational Procedures: Implement procedures for daily operations that minimise risk and ensure child safety.

3. Recruitment and Training

   • Vetting and Hiring: Implement rigorous vetting processes for all staff and volunteers, including background checks and reference verification.
   • Ongoing Training: Provide continuous training for all staff on safeguarding practices and recognising signs of abuse, with relevant formal training and refresher courses held at least once a year.

4. Code of Conduct

   • Behavioural Standards: Establish a clear code of conduct that outlines acceptable and unacceptable behaviour.
   • Boundary Guidelines: Define boundaries for interactions between staff and children to prevent inappropriate behaviour, such as tickling, cuddling, and sitting on laps, which can be considered grooming for sexual abuse.

5. Incident Reporting and Response

   • Reporting Mechanisms: Create transparent and accessible reporting mechanisms for any concerns or incidents.
   • Response Procedures: Develop clear procedures for responding to allegations of abuse, including support for affected children and families.
   • Independent Investigation: Appoint an independent person to investigate any incident of suspected sexual abuse.
   • Documented Reporting Process: Establish a documented reporting process with escalating procedures. If an employee is under investigation (internally or by the police) for committing sexual abuse, it is crucial to consult with an HR lawyer or legal counsel to determine appropriate actions, which may include suspension or termination based on the investigation’s findings and legal advice.
   • Policy for Reporting Suspicion: Implement a policy for employees and volunteers to report reasonable suspicion of sexual abuse to the senior management of your organisation, and ensure that police authorities, your insurance broker and insurer are notified.
   • Confidentiality Assurance: Assure that the details of those reporting sexual abuse will be kept private and confidential.

6. Ongoing Review and Best Practice

   • Annual Policy Review: Conduct an ongoing review of the CPP at least once a year to maintain current best practices in safeguarding procedures and observe any changes to legislation.
   • Documentation Retention: Ensure secure retention of all personnel employment, incident, and investigation reports, liability insurance policies, and other relevant incident-related correspondence. Adhere to the current privacy legislation regarding documents containing personal data.

7. Reference to the 10 National Principles for Child Safe Organisations

   • Embedding the Principles: Ensure the CPP aligns with the 10 National Principles for Child Safe Organisations, which provide a framework for creating a child-safe culture.
   • Continuous Improvement: Regularly review and update the CPP to incorporate the latest guidance and best practices from the National Principles.

Protecting Vulnerable Individuals

Implementing a robust Client Protection Policy with the above features is essential for:

• Protecting Those in Your Care: Ensuring the safety and well-being of children in the centre.
• Maintaining the Integrity of the Organisation: Building trust with families and the community through transparent and responsible practices.
• Avoiding Damaging Allegations: Reducing the risk of allegations that can lead to litigation, which can have profound effects on all involved.
• Supporting Risk Management Programs: Fulfilling the obligation to take reasonable and appropriate measures to protect all persons in your care and employment, and meet specific conditions outlined in liability insurance agreements.

Responding to Suspected Abuse: Guidance

In the unfortunate event of suspected abuse, it is crucial to act swiftly and appropriately. Your insurance broker and the insurer can provide guidance and support throughout the process:

• Listen: Take any disclosure seriously, listen without judgment, and provide reassurance to the child.
• Report: Follow the centre’s reporting procedures immediately, ensuring the concern is reported to the designated safeguarding lead.
• Document: Record all details of the concern and the steps taken, maintaining confidentiality.
• Support: Provide support to the child and family, ensuring they have access to professional help if needed.

Conclusion

From an insurance perspective, safeguarding against sexual abuse in childcare centres is an essential aspect of risk management. By working together with childcare providers, we can create a safe and nurturing environment that protects children, supports families, and upholds the reputation of childcare centres. Through comprehensive safeguarding measures, continuous education, and collaborative efforts, we can ensure the well-being of the youngest and most vulnerable members of our society.

Together, we can build a future where every child is protected and cherished, and every childcare centre operates with confidence and security.

For further assistance and to learn more about how we can support your childcare centre in safeguarding efforts, please contact our childcare insurance team.

 

References:

1. AIB/Ansvar Sexual Abuse Insurance Supplementary Questionnaire
2. Australian Government Department of Education, Skills, and Employment. (2022). National Principles for Child Safe Organisations.
3. Australian Institute of Family Studies. (2021). Child Safe Organisations: Information for organisations.
4. Working with Children Checks. (2022). https://www.workingwithchildren.vic.gov.au/)
5. National Association for the Education of Young Children (NAEYC). (2020). Guidelines for Child Care Providers.

It’s not if but when a business will experience a cyber breach. Which means it’s vital to be prepared before one happens. The first step for a small business experiencing a cyber breach is to enact its cyber security incident response plan.

“If a cyber breach happens, don’t touch anything, call for help,” says Steadfast Technologies’ Chief Information Security Officer, Alexander Moskvin.

“Engage professionals at the first sign the system has been compromised. They will be able to triage the situation and provide advice about the nature of the event,” he adds.

Having a relationship with cyber security experts in advance is vital so you can act immediately when a cyber breach occurs. The right level of service for your business will depend on its nature and budget.

Some businesses need access to 24/7 support. That support includes businesses for whom not being able to access their data for a period will have a significant revenue impact.

For instance, let’s say a restaurant is the subject of a ransomware attack on a Friday and cannot operate over the weekend. Around-the-clock cyber security support may be essential so it can trade during the busy weekend period.

Other businesses may only require cyber security support during business hours.

Cyber security incident response plans for small business

The federal government has published a guide detailing the steps to follow when a cyber breach occurs. This is a good place to start designing your incident response plan. While the government’s guide may be too comprehensive for most small businesses, it contains many of the essential elements every plan should include.

“A one-page plan will be sufficient for most small businesses,” says Moskvin.

Most plans should include service provider contact numbers to call when a breach occurs.

“If you have cyber insurance, you need to notify your insurance company,” says Moskvin.

It may be appropriate for your plan to also include a protocol for notifying people in the business and under what circumstances.

For instance, as a business owner, you may require immediate notification if the breach involves your customers’ personal data. But you may not necessarily require notification simply if a virus is detected and it has not yet entered the system.

It’s also often essential to outline the method of communication for different breaches. In the example above, the plan may state you should be notified by phone if customers’ personal data is involved in the breach.

But if a virus is detected, email or SMS notification may suffice.

“It’s up to the company to work through a range of different scenarios and what constitutes a high-risk and low-risk notification to senior management. A traffic light system where different scenarios are classified red, amber and green can help,” says Moskvin.

Steps to follow after a cyber breach

During a cyber security event, it’s vital to keep to the guidance of your cyber security experts.

“Often what happens is users click on a message or pop-up window that says the company’s information has been encrypted and clicking a link will reveal instructions to get access to the data. But this may be just a threat and the system won’t yet be infected. It’s only when the link in the message is clicked that the system will be infected,” advises Moskvin.

If a compromise is confirmed, it may be necessary to notify affected individuals or companies or the Privacy Commissioner.

While cyber insurance may be essential, it should only be considered a last line of defence.

Small businesses must have cyber security incident response plan and know who to contact in the event of a cyber breach to help reduce any damage and get back on their feet as soon as possible.

 

Important notice

This article is of a general nature only and does not take into account your specific objectives, financial situation or needs. It is also not financial advice, nor complete, so please discuss the full details with your Steadfast insurance broker as to whether these types of insurance are appropriate for you. Deductibles, exclusions and limits apply. You should consider any relevant Target Market Determination and Product Disclosure Statement in deciding whether to buy or renew these types of insurance. Various insurers issue these types of insurance and cover can differ between insurers.

Steadfast Group Ltd ACN 073 659 677

Important notice – Steadfast Group Limited ABN 98 073 659 677 and Steadfast Network Brokers

This article provides information rather than financial product or other advice. The content of this article, including any information contained in it, has been prepared without taking into account your objectives, financial situation or needs. You should consider the appropriateness of the information, taking these matters into account, before you act on any information. In particular, you should review the product disclosure statement for any product that the information relates to it before acquiring the product.

Information is current as at the date the article is written as specified within it but is subject to change. Steadfast Group Ltd and Steadfast Network Brokers make no representation as to the accuracy or completeness of the information. Various third parties have contributed to the production of this content. All information is subject to copyright and may not be reproduced without the prior written consent of Steadfast Group Limited.

When you’re going out alone for the first time, there’s lots to organise and even more to pay for. While it is not always at the top of an entrepreneur’s To-Do list, ensuring you have the right startup business insurance cover is critical.

It can help protect your new business and its assets if something goes wrong. Without it, you may struggle to recover and remain viable after an accident or incident.

So, what insurance do new enterprises like yours need to start a business? Steadfast Technical Broking Manager Annette O’Brien shares some advice.

Getting the business basics in place

Start-up businesses are often advised to take out public and product liability insurance.

The first covers you for third-party injuries or property damage caused by your negligence. The second can help protect your business if a person or their property is harmed or damaged by a product you’ve manufactured or supplied.

Property insurance is designed to safeguard your assets – think plant and equipment, furniture, ICT devices and the like – against property damage, weather events such as storms, machinery breakdown and theft.

If you intend to hire employees or contractors, you will need to take out workers’ compensation insurance. This insurance will help protect against loss from work-related injuries and illnesses.

And should your employees need to use their own or company vehicles for work related purposes, you’ll likely need a comprehensive motor insurance policy.

While some new business owners baulk at the cost of business insurance, O’Brien says having coverage in place is part and parcel of operating professionally.

“Many insurers offer a business package that incorporates some or all of these common policies – your broker can help you source one that’s competitively priced and compatible with your business needs,” she says.

Seeking specialist cover

Depending on the nature of your enterprise, it may also be wise to take out specialised cover. If you provide professional services or advice, you’ll likely need professional indemnity insurance to help protect against claims related to errors, omissions or negligence.

In today’s world, cyber insurance is fast becoming a must-have, particularly for businesses that handle and store customers’ personal data.

Cyber-attacks and data breaches are now a daily occurrence – the Australian Cyber Security Centre received 94,000 cyber-crime reports in FY2023 – and they can be disruptive and damaging, particularly for organisations that lack the resources to remediate them.

Given the average cost per crime report is now $46,000 for small businesses, most start-ups would fall into that category, O’Brien points out.

“Cyber cover can help you mitigate the costs associated with data breaches and privacy violations,” O’Brien says. “Without it, your new business may struggle to recover from a significant incident.”

Cover to safeguard your new enterprise into the future 

Insurance can help safeguard start-up businesses like yours against unexpected damage, disruption and disaster.

If you need help to determine the type and level of cover that’s right for your new enterprise, contact your AIB broker today.

Important notice

This article is of a general nature only and does not take into account your specific objectives, financial situation or needs. It is also not financial advice, nor complete, so please discuss the full details with your Steadfast insurance broker as to whether these types of insurance are appropriate for you. Deductibles, exclusions and limits apply. You should consider any relevant Target Market Determination and Product Disclosure Statement in deciding whether to buy or renew these types of insurance. Various insurers issue these types of insurance and cover can differ between insurers.

Steadfast Group Ltd ACN 073 659 677

With the evolution and adoption of new technologies, lithium-ion batteries have become ubiquitous in our everyday life both at home and in businesses up and down the country. They power everything from our smartphones and laptops to electric vehicles and energy storage systems. While these batteries have become integral in powering our modern life, they come with their own set of risks, especially for businesses that rely on them. From an insurance perspective they’re seen as an ‘emerging risk’ and we’re hearing more and more news stories about lithium-ion battery risks. In this blog post, we’ll explore what lithium-ion batteries are, how they might be used in a business environment, the regulations surrounding them in Australia, and how businesses can protect themselves from potential risks.

What is a Lithium-Ion Battery?

Lithium-ion batteries are rechargeable energy storage devices known for their high energy density, efficiency and long life span. They’re now the most common battery used in rechargeable devices but come with a range of known risks. This is due to the chemicals used in their production and their internal processes. They work by moving lithium ions between the anode and cathode during charging and discharging cycles and they’re highly flammable.

How Are They Used In A Business Environment?

In the business environment, lithium-ion batteries are prevalent in a variety of applications and devices including, but not limited to:

1. Electronics: Businesses use lithium-ion batteries to power laptops, smartphones, tablets, and other portable electronic devices.
2. Electric Vehicles (EVs): Companies in the transportation sector, including delivery services and logistics, rely on electric vehicles powered by lithium-ion batteries.
3. Energy Storage: Businesses use lithium-ion batteries for backup power solutions and renewable energy storage, enhancing energy efficiency and reliability.
4. Manufacturing and Tools: Power tools and other industrial equipment often use lithium-ion batteries for their high power output and longevity.

Risks of Lithium Ion Batteries

Among the biggest risks posed by lithium-ion batteries is overheating. This can lead to them exploding or causing fires, potentially resulting in property damage or personal injury from smoke inhalation or chemical burns. They can also be particularly difficult to extinguish if they do catch on fire as they can re-ignite and if it is a large battery, possibly burn for days.

Improper handling or damage such as puncturing or exposing the battery to extreme temperatures, can also increase the risk of failure.

According to a report by The Australian Competition and Consumer Commission, product recalls related to lithium batteries affected an estimated 89,000 products between 1 January 2017 and 31 December 2022 and at least one Australian is known to have died as a result of a fire caused by a lithium-ion battery.

Ensuring proper usage, storage and disposal of these batteries is crucial to mitigate these risks in everyday use. It’s also important to make sure you buy your devices, batteries and accessories from a reputable supplier to ensure the highest safety standards have been met when producing the device.

Lithium Ion Battery Storage

Proper storage of lithium-ion batteries is crucial to maintaining their performance and longevity. First, store lithium-ion batteries in a cool, dry place to avoid exposure to extreme temperatures, which can degrade their capacity. Ensure the batteries are charged to around 50% before storage, as this state of charge minimises stress and prolongs battery life. Avoid storing them in areas with high humidity to prevent potential moisture damage. Lastly, keep the batteries away from flammable materials and direct sunlight to reduce the risk of fire hazards.

Lithium Battery Regulations in Australia

One of the complications in Australia is that the different states and territories take varying approaches relating to electrical safety issues.

“The ACCC considers the most significant challenges arising from the current regulatory framework are the lack of uniform state and territory compulsory recall powers and lack of regulatory coverage for extra-low voltage products (which includes a significant proportion of Li-ion battery products).”

As such there is a lack of a consistent, comprehensive regulatory framework to protect Australian consumers and businesses.

Protecting Your Business from Lithium-Ion Battery Risks

If your business uses equipment containing lithium-ion batteries, it’s essential for you to understand what you can do to mitigate the risks. As we’ve highlighted above, proper storage of products and devices containing these batteries is paramount. In addition, we recommend the following:

1. Regular Inspection: Conduct regular inspections of batteries for signs of damage, swelling, or overheating. Replace any damaged or defective batteries immediately.
2. Employee Training: Train employees on the proper handling, charging, and disposal of lithium-ion batteries. Ensure they are aware of the potential hazards and emergency procedures.
3. Safe Charging Practices: Use certified chargers and avoid overcharging or deep discharging batteries. Implement a charging station protocol to prevent overheating.
4. Emergency Preparedness: Equip your facility with appropriate fire suppression systems, such as Class D fire extinguishers, and establish an emergency response plan for battery-related incidents.
5. Compliance with Regulations: Stay up-to-date with Australian regulations and standards related to lithium-ion batteries. Ensure your business complies with all legal requirements.

While most insurers haven’t yet excluded lithium battery fires from their business insurance policies, it’s worth talking to your AIB broker to ensure that you have the right insurance cover in place that’s best suited to your needs and circumstances and offers some protection from lithium-ion battery risks.

Conclusion

While lithium-ion batteries are indispensable for modern business operations, they come with inherent risks that must be managed proactively. By understanding the nature of these batteries, adhering to regulations and implementing safety measures, businesses can protect their assets, employees and the environment. At AIB Insurance, we are committed to helping you navigate these challenges and safeguard your business against potential risks. For more information on how we can support your business, contact us today.

If you have a business, chances are you have insurance cover. Depending on the nature of your enterprise, you may hold property, workers’ compensation, public liability, professional indemnity, business interruption and cyber policies. Then there’s specialty cover for unique items, services and risks. Take Taylor Swift’s legs, for example. The superstar singer hit the headlines in 2015 when it emerged that her prized pins had been insured for an extraordinary $US40 million. Deciding whether to offer cover to a potential client and if so, how much it should cost isn’t always straightforward. That’s why insurance companies employ underwriters. But what is underwriting in insurance?

What Is An Insurance Underwriter?

“It’s their job to take the information that’s been presented from a customer or broker and assess it to determine whether it falls within their target market and meets their insurable guidelines,” explains Chris Quick, Head of Market Management, Steadfast Underwriting Agencies.

We’ll look at what an underwriter does and why it’s important.

Rating the risk

As part of the underwriting process, an underwriter will rate the risk associated with providing the cover that’s being sought, generally against a set of pre-determined criteria.

For example, when assessing an application for property cover on an older building, whether the premises have been rewired is likely to be a consideration, according to Quick.

“Having a customer or their broker explain the details of the risk can enable an underwriter to understand the complexities”

Different construction materials can have different risk ratings applied to them, as can regions and postcodes.

Correctly rating a risk enables an insurer to calculate a competitive premium that is compliant with its target loss ratio – the projected difference between the premiums it receives and the claims it pays out each year.

While a regular underwriter can usually assess most insurance applications that cross their desk, larger and more complex risks may need to be referred up the line. In these cases, it will often go to a senior or specialist underwriter with the authority to approve or decline them.

An insurance underwriter will also conduct a risk review towards the end of each insurance period, considering any changes in conditions and claims that may have been lodged. They’ll then re-rate a client’s risk accordingly.

Delving into the data

Data plays a vital role in the decision-making process. Luckily, these days, underwriters have a wealth of it at their fingertips.

“There are business quoting tools and rating algorithms that save a lot of time and manual work, as well as specialised databases, such as multi-layered flood mapping. These allow underwriters to drill down and obtain detailed information at an individual property level,” Quick says.

“Artificial intelligence is also being deployed to automate administrative aspects of the underwriting process and provide brokers and customers with answers much more quickly than was possible in the past.”

But while that’s a trend that’s set to continue, human intervention will still be required in cases that don’t fit neatly into a template.

“Having a customer or their broker explain the details of the risk can enable an underwriter to understand the complexities and make an informed decision in a way that a computer program, however sophisticated, cannot do,” Quick says. “Even in today’s times, it’s a massively important role.”

Insurance cover to safeguard your business

Having the right insurance in place can help protect your small business from a range of accidents and incidents.  A broker can help you make smarter decisions about the types of cover best suited to your needs and liaise with insurance underwriters on your behalf if your circumstances are complex or unique.

For a discussion about your requirements, contact your AIB Insurance broker today.

Important notice
This article is of a general nature only and does not take into account your specific objectives, financial situation or needs. It is also not financial advice, nor complete, so please discuss the full details with your Steadfast insurance broker as to whether these types of insurance are appropriate for you. Deductibles, exclusions and limits apply. You should consider any relevant Target Market Determination and Product Disclosure Statement in deciding whether to buy or renew these types of insurance. Various insurers issue these types of insurance and cover can differ between insurers.

Steadfast Group Ltd ACN 073 659 677

Important notice – Steadfast Group Limited ABN 98 073 659 677 and Steadfast Network Brokers
This article provides information rather than financial product or other advice. The content of this article, including any information contained in it, has been prepared without taking into account your objectives, financial situation or needs. You should consider the appropriateness of the information, taking these matters into account, before you act on any information. In particular, you should review the product disclosure statement for any product that the information relates to it before acquiring the product.

Information is current as at the date the article is written as specified within it but is subject to change. Steadfast Group Ltd and Steadfast Network Brokers make no representation as to the accuracy or completeness of the information. Various third parties have contributed to the production of this content. All information is subject to copyright and may not be reproduced without the prior written consent of Steadfast Group Limited.