Claim Example: How an Expired Licence Could Leave Your Club Uninsured

Say a club’s courtesy bus is involved in a collision and the driver’s licence has expired. It is highly likely that the expired license will come to light during the claim investigation. In that case, the insurance policy may be deemed void for that trip, exposing the club to significant financial and legal exposure.

Such a scenario can be avoided by creating a simple register that requires monthly checks of your drivers to ensure they have valid licences before starting their shift.

It’s important not to rely upon conditions in employment contracts for drivers or employees to maintain a current driver’s licence.

Your motor vehicle insurance policy will have a clause that states it is the Club’s responsibility to ensure that operators abide by all regulations and laws. Compliance is required to ensure the insurance policy responds successfully in the event of a claim.

Your Insurance Policy Requirements for Driver and Security Licensing

Most motor vehicle public liability insurance policies place clear responsibility on venue operators to ensure all courtesy bus drivers hold current, valid licences appropriate for the vehicles they’re operating. This isn’t about insurance companies being difficult – it’s a fundamental requirement that protects both your patrons and your business.

The same principle applies to contracted security providers. It is best practice for your venue to verify and maintain evidence that your security company holds current public liability insurance. Should their insurance lapse and an incident occurs, the full responsibility of any claims falls to the club’s liability insurance policy creating potentially significant financial exposure to the club.

Key insurance requirements typically include:

Why Licence Management Matters More During Busy Periods

There are several reasons why it matters more during busy times for your venue, for example you may experience:

• Increased patron numbers and extended trading hours
• Higher demand for courtesy bus services to ensure patron safety
• Employ additional casual or relief drivers, and security staff
• More people relying on your services to get home safely
• Greater scrutiny on venue risk management and insurance compliance due to increased patronage

When you’re bringing on extra staff or engaging additional security providers to meet seasonal demand, the risk of overlooking licence and insurance certificate checks increases. Therefore, this is precisely when maintaining accurate driver licence registers and security provider insurance documentation becomes increasingly important for your club’s insurance coverage.

Simple Systems for Register Management

Protecting your venue doesn’t require complex processes. There are some simple steps you can take to help maintain good records of your courtesy bus drivers and security providers, which in turn will provide the evidence you need to support your risk transfer and insurance program:

For Courtesy Bus Drivers

• Maintain a driver licence register of all authorised drivers
• Record licence numbers and expiry dates in a central system
• Set calendar reminders 30 days before expiry dates
• Sight and copy current licences before each roster period
• Ensure the licence class matches your vehicle requirements
• Verify licence status through official channels when onboarding

For Security Providers:

• Request current public liability insurance certificates from your security company, yearly
• Record policy numbers and expiry dates in your register
• Set calendar reminders 30 days before expiry dates
• Obtain updated certificates before engaging services each year
• Keep copies of all current certificates on file
• Verify their cover is appropriate for your venue type and activities
• Request immediate notification if their insurance status changes

Best Practices for Community Clubs

There are several practical steps you can consider that aim to strengthen your driver and security verification processes. You may wish to implement:

A robust checking system:

• Develop a simple spreadsheet with automated expiry date alerts
• Assign one person responsibility for monthly register reviews
• Build licence and certificate checks into your onboarding process
• Include verification in your pre-shift checklist during peak periods
• Communicate clearly with drivers and security providers about renewal timeframes and responsibilities

A process to build accurate records:

• Photograph or scan all licences and insurance certificates for your records
• Note the date you verified each licence
• Record who conducted the verification
• Maintain a log of any renewals
• Store documentation securely but accessibly

The Benefits Beyond Insurance Compliance

While maintaining these registers helps to protect your courtesy bus insurance and public liability coverage, the overall benefits extend beyond your insurance program. For example, it can also:

• Demonstrate your duty of care to patrons and staff
• Support compliance with hospitality venue regulatory requirements
• Provide clear documentation if questions arise during claims
• Create accountability across your team and service providers
• Give you confidence in your operations
• Protect your reputation in the community
• Reduce potential legal liability exposure

Pre-Festive Season Checklist for Venue Operators

If you haven’t reviewed your driver and security registers recently, now is the perfect time. A quick audit today could save significant headaches this festive season.

• Do all current drivers on your register have current licences?
• Do you have copies of current driver licences on file?
• Are any drivers licences due to expire in the next 60 days?
• Do you have current public liability insurance certificates from all security providers?
• Are any security provider insurance certificates due to expire in the next 60 days?
• Do casual staff have their documentation ready for when you need them?
• Have you verified document authenticity through official channels?
• Is your register easily accessible for compliance checks?
• Do staff and providers know how to report renewals or changes to their licence or insurance cover?
• Have you briefed managers on verification procedures?

Frequently Asked Questions About Driver and Security Licence Management

How often should we check courtesy bus driver licences?

Best practice is to verify licences monthly, with additional checks whenever rostering casual or relief drivers. Always verify before the busy periods begin.

What happens if a driver’s licence expires on the day of their shift?

If a licence expires and an incident occurs, your insurance coverage may be void. Build in 30-day warning systems to prevent this scenario.

How often should we request updated insurance certificates from our security company?

Request certificates annually, and always before expiry. Set calendar reminders 30 days before expiry to ensure continuous coverage.

What documentation should we keep for insurance purposes?

Maintain copies of all current licences and insurance certificates, a dated register showing verification checks, and records of any communications about renewals. Keep these for at least seven years.

Can we rely on drivers and security companies to tell us when licences are expiring?

While they should notify you, the legal responsibility under your insurance policy rests with you, the venue operator. Implement your own tracking system rather than relying on employment contracts. Don’t forget, compliance with regulations and laws is the responsibility of the club and is a crucial factor in claim success.

Need advice on your risk transfer and insurance program?

Take advantage of the Clear Insurance no-obligation risk and insurance review for clarity on your current risk transfer and insurance program.  You’ll receive a detailed gap analysis report helping you to make informed decisions. Contact Clear Insurance today.

As a business owner, your enterprise is one of your most valuable assets. Therefore, it makes sense to take the necessary steps to protect it.

In Australia, inadequate cash flow is the primary reason small businesses fail. [1]

Which highlights the importance of having a robust risk transfer strategy in place, which may include transferring risks to insurance to safeguard against financial losses. 

“1 in 10 Australian small businesses with insurance don’t have enough cover to protect themselves.”

The importance of a comprehensive risk transfer strategy

Insurance is a risk transfer tool that businesses can use to safeguard against financial losses when the unexpected occurs, such as loss of income due to equipment breakdown or storm damage. A well-designed risk transfer and insurance program can help safeguard your business against unexpected financial losses and build resilience for your business during challenging times.

Did you know that ‘one in ten Australian businesses with insurance don’t have enough coverage to protect the business from the losses associated with business disruption, legal liabilities, or loss or damage to assets [2]? It highlights the potential risks associated with underinsurance.

Understanding underinsurance: Is it a risk you can afford?

Underinsurance refers to having inadequate insurance cover for your business, increasing the risk of severe financial strain if something goes wrong. The temptation of low premiums can lead business owners to overlook adequate insurance protection.

• Outdated Coverage: If you have not updated your insurance to reflect recent or future business growth, you may make your business vulnerable.
• Inaccurate Replacement Valuations: Underestimating the repair or replacement of equipment or other business assets can lead to significant out-of-pocket expenses following a storm, fire or other claimable event.
• Inadequate Sums Insured: If financial limits (sums insured) are inadequate, it may expose the business to financial losses following management or legal liability claims, or business interruption events.

The impact of proper insurance cover

A quick recap on Professional Indemnity Insurance

Professional indemnity insurance (PI Insurance) is most common in businesses that offer advice and services for a fee. That’s because their advice can significantly influence people’s decisions and actions.

For example, a client may use your services and suffer a financial loss as a result of your advice. They may take legal action against you. Your PI insurance policy can assist with the defence costs and any compensation you must pay. 

How to Avoid Underinsurance for Professional Services

What is the Average Provision?

The average provision is the percentage of costs the insurer will pay towards your legal defence and settlement costs. Your sums insured amount dictates this percentage, therefore it’s critical to set realistic dollar limits.

While you may save on premium costs with lower sums insured, you may be significantly out of pocket later. That’s underinsurance. Setting the optimal level of cover helps.

When does Average Provision apply?

It applies to Professional Indemnity Insurance policies or PI Insurance policies that contain a defence cost exclusive indemnity limit. That means the policy includes provision for the insurer to cover any reasonable costs. Costs such as defending, investigating, responding to, or settling a claim including the legal costs.

Will the Average Provision apply when I make a claim?

It applies when the compensation payment you must make to resolve a claim exceeds the sums insured limits in your policy. The Average Provision calculates the percentage of your costs that the insurer will cover. At this point, the dollar limit (sums insured) amount is vital.

For example:

Say you have a PI Insurance policy with a defence costs exclusive indemnity limit. You decide to set the limit at $1m with an Average Provision clause.

A third party takes legal action against you. So, you make a claim under your PI insurance policy. The legal action settles on a $2m compensation payment to the third party.

As your policy limit is $1m, it only covers 50% of the amount owed to the third party.

Therefore, the Average Provision states that your insurer will only cover 50% of the costs.

That means the insurer pays 50% of the compensation amount. However, it also means the insurer pays 50% of the costs associated with defending the claim.

The table below shows the breakdown.

A recap on PI Insurance limits, inclusions and exclusions

Professional indemnity claims can be expensive. Therefore, adequate insurance coverage helps cover the costs of claims. Your policy may help cover the cost of legal advice, investigations, public relations advice and compensation payments.

Typical exclusions from a PI policy may include intentional damage, bankruptcy, bodily injury or property damage.

Your PI insurance may include an Average Provision clause which dictates how much insurers pay. We’ll go into this in more detail now.

Ask your insurance broker to explain the inclusions, exclusions and limits within your PI insurance policy.

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Managing Director Lisa Carter says, “I founded Clear Insurance 12 years ago as an Insurance Advisernet Corporate Authorised Representative following an 11-year career with AON, which included being an Authorised Representative to AON for 7 years. I’m incredibly thankful for my time with Insurance Advisernet. It’s a great organisation and continues to be one of Australia’s leading Authorised Representative networks.”

“For us, it was time to step out of the AR model and continue to build Clear Insurance as a stand-alone business in partnership with the Steadfast Group. We’re delighted to have the support, resources, technologies and strength of Steadfast behind us as AFSL Holders.”

Clear Insurance remains steadfast in its commitment to providing professional advice to clients on a transparent fee-for-service remuneration model.

Lisa says, “Our focus is, and always has been, to delight clients with clear risk and insurance advice and a transparent approach to remuneration. We charge fees commensurate with our work to support our clients’ success. Our approach reinforces our value as business advisers, so we’re not interested in under-cutting our competitors or driving clients to make price-focused decisions which may risk under-insurance. It’s simply not in the client’s best interests.”

“We do it the Clear Way. We believe in transparency and nurture relationships with our people – our clients, team, insurers, and industry partners – they’re our people,” said Lisa.

Lisa remains focused on our steady growth and devoted to our goal of attracting, nurturing, and retaining the next generation of elite risk and insurance advisers.

“Our goal is not to build another AR network in an already saturated marketplace. Our goal is to meet client needs and present insurers with high-quality, reliable business by continuing to build a highly coveted and rewarding workplace for our team – from a personal, professional, and financial perspective. We bridge the gap between the big international companies and the AR networks by offering motivated professionals unique career opportunities with better work-life balance,” says Lisa.

“We’re passionate about work-life balance and actively encourage good health and wellbeing for our team members. When you feel good, you have a stronger mindset to reach your personal and professional development goals. Our supportive team environment enables us to have our cake and eat it!”, Lisa continues. “I’m delighted that Clear Insurance has the solid foundations to support a stable and transparent future. It’s clear, the transition from transactional broking to professional advice is rapidly becoming a sustainable pathway for the future.”

“We’re fortunate to have the resources to concentrate on the satisfaction of our people – clients, staff and industry partners – and attract insurance professionals that want to learn the Clear way”, says Lisa.

You can learn more about becoming part of Clear’s future on our careers page or contact Lisa Carter.

Therefore, having a strong grasp of the business management risk for your operations is critical. While last week we considered the impact of defamation, today we’re looking at what’s commonly referred to as crime risk.

The critical question for crime risk that our advisers will ask you is:

• Are you 100% confident that your business is not open to the theft of funds, inventory or intellectual property?

So, to help you answer this question, we use our risk and insurance expertise to take you on a risk discovery journey. During which, we’ll work with you to analyse financial data, growth plans and operations to see what level of risk your company can support.

Why should I consider crime as a business management risk?

Today, the risk of a business falling victim to crime continues to grow and can be distressing for all involved. So, a ‘she’ll be right’ attitude to save money can be costly for your business.

Nevertheless, you may feel that you have the necessary protocols and policies in place to mitigate crime risk. What’s more, you have complete faith in your employees. However, theft can happen in the most unlikely and unexpected ways.

Examples of crime:

Dealing with company insurance programs and insurance claims daily, we encounter many examples of business theft. So, here are a couple of ways crime can occur within a business:

• Distressing family circumstances lead a trusted employee to embezzle funds to help cover critical family issues or addictions over a long period.
• A trusted employee takes products to sell or use outside of the business for financial gain.
• A senior employee or contractor uses your intellectual property outside the business or shares the details with competitors.

As you can see, while we trust our employees, the circumstances can quickly change.

Today, it is becoming harder to feel 100% protected against the risk of crime. However, with the comfort of the most relevant insurance products you can gain peace of mind.

How do I protect my company from business management risk?

There are ways you can mitigate business management risk. Therefore, it’s vital to seek advice from professional advisers such as risk and insurance advisers, human resources specialists, legal advisers, and accountants who can assess your operational procedures and insurance programs to ensure they’re sound.

There is a suite of management liability insurances available to businesses. However, the devil is in the detail, and insurance products can vary substantially. So, it’s vital to have a clear understanding of your insurance program.

How can Clear Insurance help you?

We use our extensive risk and insurance knowledge to help you navigate the full suite of insurance products. As such, we’ll guide you through the pros and cons of each product to help you choose the most appropriate insurance solution for your needs.

When you come on our risk discovery journey, firstly, we’ll help you to streamline existing insurance programs, align renewal dates and provide recommendations to address critical gaps in cover.

Secondly, with our fee-for-service approach, you can feel confident that our fee is calculated based on the insurance services you receive rather than the policies themselves. It also helps reduce the taxes payable on your premiums.

Contact us today to see how we can help.

Whilst it’s important to ensure that all employees are protected during these difficult times, company directors must also address their own level of protection. That’s because when a business goes into insolvency, the personal and family assets of the company’s directors can be accessed during the liquidation process. This can lead to significant financial stress and bankruptcy for unprotected company directors.

There are two main avenues for protecting the assets of company directors, senior staff and business owners, as follows.

1. Legal protection for company directors

Directors can be found personally responsible for their company’s debts and liabilities if they are found to have acted unlawfully. These breaches can include trading while insolvent, personally guaranteeing a company loan, and fraudulent trading. However, if the insolvency is not due to any wrongdoing on behalf of the directors, but to loss of revenue (as occurred recently due to the pandemic), their assets can still be accessed to pay debts.

Unless of course, the company directors have protected their assets against such an eventuality. Asset protection for directors should be considered a key component of their salary package, ensuring that the family home for example, is not threatened during the insolvency process. Some avenues that can be utilised by company directors to protect their assets include holding all assets in a trust or a self-managed superannuation fund. Other strategies include transferring assets into their spouse’s name, establishing testamentary trusts as part of estate planning, and death benefit nominations for superannuation payouts. Company directors should ensure they take professional advice when considering any of these strategies.

2. Insurance protection for company directors

Directors and Officers Liability Insurance is designed to protect the assets of senior management in large multi-nationals, but it’s also applicable to SMEs. It’s designed specifically for business owners and managers or directors who run companies, because they are personally responsible for their decisions and actions within the business. In cases of insolvency, they can protect the assets of senior management against liquidators, if they have behaved appropriately and not abused their director’s duties.

This type of insurance can also protect senior management against unproven criminal charges that require a court defence, as well as lawyers and investigators. Legal costs for both past and present officers, as well as compensation or penalties that may result from a claim can all be covered under this type of insurance. Apart from liabilities and debts due to insolvency, other claims that can be covered include breach of contract, overstepping of director’s authority, legal non-compliance, misrepresentation, and so on. With many decisions made frequently every day by senior officers of a company, suitable insurance protection is vital.

Whilst SMEs can cover their senior staff with a Directors & Officers Liability Insurance, they also have the option of Management Liability Insurance, as this is designed specifically for smaller businesses.

We can help

To decide what type of insurance policies are suitable to protect your senior staff, talk to an insurance specialist today and contact Lisa Carter, Clear Insurance.

So, here are three key areas to consider if you’re thinking about reviewing your insurance program.

Liability Insurance Discounts

When times were tough and venues were forced to close, the team at Clear Insurance were successful in negotiating good premium discounts for our hospitality clients. They did so by amending their public and products liability policies to “non-operational”.

Amending public and products liability policies to “non-operational” was agreed to by some Insurers on the provision that when the hospitality venue is operational in the future, the policy reverts to “operational” and an additional premium is payable when trading commences.

Note: various Insurers have differing premium discounting abilities however, the specialist hospitality underwriting agencies had a more positive approach to allowing this discount.

Business Continuity Planning & Risk Management tips for non-trading licensed venues

We recommend that all licensed venues review their business continuity plan (BCP) to ensure it is current and update the delegated roles in the BCP, given that staff may change.

Key points of consideration in your BCP:

1. People first! look after your key assets
2. Assemble your BCP team
3. Communicate, communicate, communicate
4. Review existing plans
5. Prioritise Key Business Functions

Property Risk Management

Managing your property risk exposure is crucial when licensed venues are non-operational. The advice we received from Chubb Insurance for our hospitality clients is set out below.

Recommended property risk management action items:

i) Minimum 1 person to remain on-site during normal business hours;

Note: If this is not feasible recommend minimum twice daily visits and inspections conducted at the insured premises

ii) Main Gas supply shut off (if cooking not being performed or gas not used for power/heating etc);

iii) Other utilities remain connected;

iv) All alarms, smoke detection, sprinkler systems to remain activated; v) Cash removed from the premises.

Feel free to contact Lisa Carter for further assistance.

If your business interacts with the public, it’s likely that you need Public Liability Insurance. This policy covers your company from third party claims of injury or damage to property, as a result of an incident caused by your company’s business activities. Whilst for the majority of SMEs it’s not compulsory or a legal requirement, in some instances a business can’t operate legally without this type of insurance cover.

When is the best time to take out Public Liability Insurance?

The best time to take out Public Liability Insurance is before you even start trading. That’s because you have no idea when a problem might occur that can result in allegations of injury or third party property damage. Ensuring you are adequately covered as soon as you begin trading is a wise move. If you don’t understand the potential risks or believe that no-one could sue your company for injuries or property damage, the results to your business could be devastating. The bottom line is that if you have been trading for years without being sued and you don’t have Public Liability Insurance, this situation might not continue. It’s vital that you investigate your options, before it becomes too late.

When can you be sued for injury or third party damage?

There are an endless number of examples where the public sue SMEs for injury or property damage. Some of these instances may be cases that you believe could never happen, resulting in devastating consequences. A few examples of these are noted below; Essentially if customers or suppliers, any third party visits your store, restaurant, workshop, factory or other place of business (including your home for a home based business) you can be sued if they are injured on-site or their property is damaged. The same applies if any of your employees visit a customer’s site and cause damage to the customer’s property or the customer themselves. If a customer is injured by one of your products that they purchased your company can also be sued. You can even be sued if you host an event off-site that is attended by the public!

How do you know if you need Public Liability Insurance?

If you don’t have Public Liability Insurance, use your risk management planning to think of all the instances that could happen with your business and when you could be sued for third party injury or third party property damage. To assist you with this, talk to one of our insurance specialists who will help you decide whether your business can benefit from this type of insurance and provide guidance on the cover required. The take home message is that it’s more than likely that you do need Public Liability Insurance and the sooner the better. Otherwise you stand to literally lose your business if you have a claim and the case is awarded against your company, and no Insurance coverage to help you with the cost.