Property of Employees and Members of Clubs under an ISR Policy – Prof. Allan Manning’s Blog

The ability to provide protection to an insured for the property of the organisations directors and employees at the situation has been available under the Australian Industrial Special Risks Policy since at least 1987.

The importance of the coverage has increased over time as the take up of contents insurance in Australia has fallen in line with the increase in apartment living, while the traditional coverage of temporary removal of contents has been taken out of many home and contents policies.

While the organisation may not have been liable for the insured peril which has caused the loss or damage to directors and/or employees property at one of the insured’s situations, in today’s society there is an expectation on the organisation, where a failure to compensate for the such losses can, in my experience, very well cause a morale problem in the employees at a time when you need their full support and engagement more than ever.

The coverage provided by the policy as standard is typically subject to two Sub-Limits of Liability. The first, a per person Sub-Limit; and the second, an “any one loss” sub-limit. Like the overall Limit of Liability, each and every Sub-Limit needs to be reviewed at least annually to ensure that it provides adequate protection for this risk.

With the experience of handling claims for many clubs over the years, it became clear that there was a gap in the coverage for the members of clubs for property that they may leave at the club house.

Anyone who has been involved in a major claim for a club knows just how difficult they can be to manage, with many of the members wanting their involvement in the reinstatement process, and often other sections of the claim. Add to this, the problems that arise when it is found that their is no coverage in place for their own personal property and suddenly, heaven has fallen.

The same issues that apply to directors and employees on not having coverage under their own contents insurance applies to the members.

One of the clubs where the amount per member can be substantial is golf clubs. This used to be a set of clubs, now it may include a buggy.

A prudent member would purchase specialist insurance policy, which would provide them protection for Personal Accident (slips and, trips, etc.) and for their Sporting Equipment. But not every member is that wise.

Many ISR insurers are not comfortable providing coverage for visitors to clubs but, as with guests and lodgers at an accommodation facility, are prepared subject to a Sub-Limit on which a premium is calculated to provide coverage for the property of the employees and members of the club based on an endorsement that was drafted by colleagues and I at LMI Group.

As with other versions that seek to clarify the original Mark IV version of the Industrial Special Risks Policy, this version requires a second endorsement to bring the Basis of Settlement in line with current industry practice.

I share both endorsements with you below and ask that you consider it for any clubs that you may insure.