Running a business in Australia can mean interacting with Indigenous communities, whether as customers, partners, or stakeholders.

There are also an estimated 16,000 Indigenous-owned businesses, primarily concentrated on the east coast, according to the National Indigenous Australians Agency.

Building strong partnerships allows your business to operate ethically and legally while fostering social impact. Here’s how to engage with First Nations communities respectfully and earn a ’social licence’ that demonstrates your commitment to best practices.

The power of strong partnerships

The Network for Business Sustainability (NBS) emphasises the benefits of collaboration between Western organisations and Indigenous communities. Partnerships can nurture social impact for companies while empowering First Nations people and supporting their goals.

The NBS and researcher Dr Maegan Baker offers these tips:

Key business actions

The Australian Business Guide to Implementing the UN Declaration on the Rights of Indigenous Peoples set outs practical steps to build appropriate frameworks for partnerships.

1. Adopt a policy respecting Indigenous rights (standalone or integrated)
2. Conduct due diligence to assess and address impacts on Indigenous rights
3. Consult with Indigenous peoples on matters affecting them, ensuring you obtain free, prior, and informed consent for projects that impact their rights
4. Establish a grievance mechanism for addressing Indigenous people’s concerns, and
5. Remediate any adverse impacts on Indigenous rights promptly.

Foundational Approaches for Engaging with Indigenous Australians

The guide also suggests these foundational approaches for engaging with Indigenous Australians:

• Learn about Indigenous culture and history, including land dispossession and trauma
• Engage respectfully, actively listen, and adapt your approaches
• Build trust through ongoing communication and shared decision-making
• Acknowledge power imbalances and create opportunities for participation. This includes:
  • Meaningful employment and procurement with Indigenous businesses
  • Responding to feedback with a transparent process, and
  • Regular opportunities for feedback to drive change.

Innovation and inventiveness have been at the heart of First Nations cultures in Australia for at least 65,000 years. For example, towards the end of the Ice Age, Indigenous people fashioned a multi-function tool, known as thumbnail scrapers, from high-quality chert, or crystal for butchering, or scraping wood, bone, and skin. As well, their pre-industrial trading networks were expansive, often celebrating symbolic and scared objects. Trade routes incorporated Songlines and Dreaming narratives, too.

Your Next Step

Whether your business interacts with Indigenous communities as customers, business partners or stakeholders, the approaches above are sound. The insights you’ll develop can positively impact your business in various ways:

• Building trust and strong relationships
• Enhanced cultural competency
• Increased innovation and creativity (tapping into unique knowledge, perspectives, and problem-solving perspectives)
• Expanded market reach
• Improved social responsibility, and brand reputation, and
• Learning from Indigenous wisdom (accumulated over generations, particularly in sustainable resource management, community governance and holistic wellbeing).

These benefits can also contribute to stronger risk management practices. And that’s why we’re here to help your business succeed. Ensure you keep us updated as your grow.

Australian businesses are getting smarter about managing cyber risks.

Two moves – learning more about ransomware and improving their defences against cyberattacks – are paying off, according to a recent industry survey by consultancy CyberCX. It found ransom payments dropped 50% in 2023, according to The Australian Financial Review.

But, there’s more to do.

Active cyber insurance: A game changer

If your SME has cyber insurance (about 20% do), remember, it’s a not set-and-forget solution. But it does play an important role in your cybersecurity arsenal. Insurers are constantly improving policies to address evolving threats. 

This year, a new option is gaining traction: active cyber insurance. This policy goes beyond recovery and focuses on preventing cyber incidents. They help SMEs identify weaknesses, improve defences, and offer tools to detect threats and respond effectively if attacked.

Meanwhile, traditional cyber insurance focuses on financial recovery after an attack.

OT/IT overlap

In the past, operational systems (OT) were isolated from the internet, making them less vulnerable than information technology (IT) networks. 

However, advancements, such as artificial intelligence powered automation, mean OT equipment is now online, too. This creates overlapping risks between OT and IT.

Missing cybersecurity talent

Along with the rest of the globe, Australia is suffering from a cybersecurity skills shortage. We saw a high turnover of talent during the pandemic as hybrid or remote work made team cohesion tricky. 

Since then, cyber security experts have become increasingly burnt out and fatigued, reports IT News. And, Australia will be 30,000 cyber security professionals short in the next four years, says TechRepublic.

Since then, businesses with unfilled cyber security vacancies are looking to upskill the staff they currently have to deal with the shortfall. Even the government is trying to nurture the next generation with a promising Virtual Work Experience program for 14-to-25 year olds with a disability to get a taste of ICT work.

Underwriters predict higher risk

Ensuring a talent pipeline is key, particularly with the range and depth of risks increasing. A global survey of insurers predicts a significant rise in cyber risks this year, finding:

• Cyber risks will rise significantly this year
• Ransomware is likely to become the top threat
• Insurance premises will go up slightly
• Not much will change on businesses who prefer to self-insure, and
• Most respondents thought cyber policy coverages will roughly remain the same.

So, time to get even more serious about cyber risk protection. If cyber isn’t part of your insurance, it should be.

Business travel is expected to remain strong in 2024, with research indicating a boost from sectors like manufacturing, healthcare, mining, oil and gas, professional services and construction.

According to professional services firm, McKinsey, corporate travel is on track to reach 80% of pre-pandemic levels this year.

So, if your company has employees travelling for work, ensure you’re protecting both your business and those who travel.

Three policy options

There are three types of travel policies to consider:

1. You can opt for general travel insurance, which offers options for wider coverage, such as for adventure activities. It’s a one-off policy, but you can invest in annual multi-trip cover if travelling frequently. Adds ons are possible, so you can customise coverage to the needs of your trip. Generally, you’ll be covered for medical expenses, trip cancellations, lost luggage, and other common travel mishaps.
2. Meanwhile, business travel insurance policies work as annual multi-trip ongoing cover for individual business travellers. It can also cover spouses and minors. You’ll need to have a separate policy per individual/family, which is renewable annually.
   
   Business travel insurance could cover events specific to a business trip (in Australia or overseas). These might include alternative employee expenses, frequent flyer points, and corporate image protection. Benefits could include coverage for medical expenses, costs of emergency or missed transportation due to unforeseen circumstances, and even compensate for rental vehicle excess charges. You can also add cover if your employee does some incidental leisure travel, too.
3. Lastly, a corporate travel insurance policy provides a ‘set-and-forget’ approach to cover your staff on authorised domestic or overseas business travel. Such a policy can cover directors, senior managers, their spouses, dependent children, plus other designated employees. Opting for this type of policy gives consistent cover for all your staff, but you can also tailor the plan.

Claim examples

An Australian business traveller was injured in head-on car accident in a US national park. They needed more than four weeks in hospital there, nudging the cost to $570,000, which their corporate travel insurance covered.

At the end of a business trip to Germany, an Australian’s bag went missing from their hotel. Since the bag was never found, they were able to claim $5,500 on their insurance for the loss.

A would-be business traveller had to cancel their trip due to their partner’s stroke-like episode. Even though they were only going to travel within Australia, the insured was able to claim $20,000 to cover the cancellation costs.

Overall benefits of travel insurance

Here’s a list of benefits possible through business/corporate travel insurance:

• Overseas emergency medical and hospital expenses, including around the clock emergency medical help, such as for evacuation and repatriation (includes coverage for COVID-19)
• Loss of income
• Expenses for trip cancellation, delay, or for travel resumption
• Personal liability
• Damage to or loss of luggage and personal possessions, passports, credit cards and credit card fraud
• Rental vehicle excess charges
• Theft of cash.

Be sure to tap into frequent flier points for your business travel, too. Typically, your individual staff who travel for business will earn the frequent flier points, not your business. That means it’s another perk for staff, and they can link those points to their personal account.

However, businesses can register for programs such as with Qantas or Virgin to earn points on flights. Your company or staff can then use those points for flights, upgrades, and other rewards.

Consider paying your invoices (and your insurance) with credit cards to earn more points, as well.

What to look for in a travel insurance package for
business travellers

We can guide you in weighing up the pros and cons of policies. Here’s a guide of the key criteria, apart from those mentioned above:

• Business specific benefits, such as cover for alternative employee expenses, resumption of assignment costs and protection of your corporate image
• Flexibility and convenience, so you can easily add multiple employees under a single corporate plan, for example
• Exclusions and limitations, such as around pregnancy, alcohol-related incidents, and lack of ‘reasonable care’, and
• Tax deductibility.

If travel is part of your business, talk to us, as your broker/adviser, to ensure your protected. We’ll be here to help, too, when it comes time to claim.

Managing the shift from summer to autumn is just one aspect of seasonality for hospitality businesses – a key risk for SMEs in this sector.

Read on for our insights and research on tips to navigate the challenges.

What causes fluctuating demand

Consumers’ demand for hospitality services and products fluctuates depending on the time of year, offerings, and location. These variations are known as seasonality and are usually predictable and therefore can be mitigated against.

You’ll typically experience a boost in patronage during holidays, school breaks, festivals, conferences, or other local events, even indirectly. Putting out feelers and setting up alerts about such events can help you plan and increase staffing appropriately.

Meanwhile, consumer preferences for particular kinds of hospitality services will wax and wane. Keep on top of these with strong tech-enhanced data collection and analysis (see details below) to understand how it affects your business.

Be outward looking, too, via social media and industry trends reports, such as this global one from Revfine. Also, check out Lightspeed’s report for Australian insights.

These bonus tips can also help you manage fluctuating consumer demand:

• Personalise the customer experience so it’s memorable and unique, and consider how technology can help
• Embrace sustainability and let your customers know about your processes (a third of customers are asking for enviro-friendly initiatives, such as using local or seasonal ingredients)
• Offer flexible booking, including for last minute bookings and cancellation options
• Prioritise health and safety measures, drawing on the lessons learnt from the pandemic
• Attend to dietary preferences, but also keep culinary innovation and wider menu choices happening
• Refresh your outdoor spaces and
• Partner with local businesses, charities, and your communities to raise awareness about your brand.

Best practice for inventory management

Operators are boosting their inventory management in these ways, according to the Lightspeed report and other sources:

• Using an app for back-of-house, saving 1 hour 40 minutes per day with tighter inventory control, and more frequent monitoring and forecasting for both perishable and non-perishable goods
• Adopting tech for just-in-time inventory management to improve processes, efficiencies, and forecasting
• Diversifying suppliers and building relationships through strong communication and more transport supply chains and weighing up options to pre-purchase for peak seasons
• Regularly auditing inventory to pinpoint sluggish items while improving stock-turn rates
• Point-of-sale ordering systems, and
• Harnessing artificial intelligence (a third of hospitality are doing so for efficiency, upping revenue, cutting overheads, promotion, and even menu planning).

Sustainability is key to inventory management. Here’s what hospitality businesses are adopting:

• Going paperless, such as bump screens instead of docks and offering digital receipts
• Have recyclable or reusable packaging and cutlery
• Use farm-fresh, local, or seasonal organic produce
• Motivate their customers to take up the reuseable products
• Offer vegan and vegetarian food options, and
• Track their business waste.

Strategies for successful staffing

Understaffing can fuel negative online reviews, so ensure you have a good staffing strategy in place, ready for your busiest seasons:

• Plan early using your historical sales data, local and industry knowledge as well as upcoming events
• Create a recruitment strategy with clear role descriptions (with rights and responsibilities), an advertising/marketing plan, and recruitment
• Partner with local schools, higher education, and training providers to inform them about your job opportunities
• Go online with your advertising, but also streamline interviews if doing a ‘bulk’ hiring drive
• Think about cross-training staff in several areas so they can fill gaps during your busiest times
• Discuss flexible work options with candidates
• Keep improving your work culture with inclusive practices, rewarding top performance, and running work social events
• Provide good communication, particularly about shifts
• Use software for rostering and scheduling to save you headaches, and
• Monitor your processes, seek feedback from staff, evaluate, and tweak your approaches after each peak season.

Cash flow management

Here’s how to improve cash flow whatever the effects of seasonality on your SME:

• Know the revenue cycle of your business by drilling into your data and forecasts
• Use tech to track and manage cash inflows and outflows, checking those off against your budget projections
• Control costs by identifying unnecessary spending
• Adopt strategic pricing based on analysing market trends, customer demand, and competitor pricing
• Nurture robust relationships with your financial lenders
• Streamline staffing and conserve energy use during slow times
• Schedule renovations or repairs during the off-season to reduce disruption to income, and
• Highlight low-season advantages to customers, including fewer crowds, cheaper prices, and a more casual atmosphere.

What’s trickier to predict is the impact on your business of the cost-of-living crisis. A recent survey shows Australians spend just 5% of their monthly income at hospitality venues. An industry report says hospitality businesses made these moves to deal with inflation:

• Changed menu items
• Renegotiated with or changed suppliers
• Reducing staffing numbers
• Closed some operations or cut hours, or
• Increased pricing.

Keen for more tips about risk management? Be sure to check out our future email articles and chat with us.

Here are the top five insurance claims Australian SMEs make, according to insurers.

This article will also offer tips to improve your risk management, so you’re less likely to need to claim for any of these events.

#1 Claim: Theft

Theft and burglary are the top claims. Consider these moves to reduce the likelihood of your business being the victim of such crimes.

• Install webcam security, including motion sensor lights 
• Lock doors and windows (deadlocks and key-locks) when the premises are unattended
• Be mindful that thieves often enter through a door or window, but can enter via ceiling spaces
• Boost external lighting
• Check employees’ backgrounds, have a clear policy on internal theft and ask them to be alert to thieving in the workplace
• Ensure staff have regular anti-theft policies and training
• Track and manage your inventory with a digital system
• Store valuables and cash in a safe at the close of business daily, and
• Consider investing in a private security service if your premises are in a high crime area.

#2 Claim: Storm damage

Storm damage claims rank highly with the increase in storm severity and frequency. Leaking roofs, water-damaged stock, or power surges can damage and disable machinery or electrical equipment. Here’s how to protect your SME:

• Regularly maintain your roof, ceilings and roof space (If tenanted, ensure the landlord regularly conducts maintenance of the structure/premises)
• Check and routinely clear blocked gutters and drains
• Identify flooding or water pooling risks on your site (with the assistance of a plumber) and make adjustments to better manage and direct the flow away from your building
• Trim excess vegetation, especially trees overhanging your building
• Securely anchor outdoor equipment or furniture and store loose items under cover, if possible, and
• Turn equipment and computers off at the power point to prevent potential surge damage.

#3 Claim: Liability claims

Public or product liability claims are also common, making up one in seven claims. Minimise your exposure to being out of pocket for damage to third parties’ property or injury to people. Examples include one of your staff backing into a client’s vehicle or structure, a visitor tripping at your premises, burst water pipes that damage equipment at a neighbouring business, or your products causing injury or damage to customers or third parties.

These tips will help:

• Ensure you have fit-for-purpose quality assurance controls to minimise the risk of product liability claims
• Keep walkways, floors, steps, and stairs dry and clear of trip hazards
• Consider where you can improve visibility in these places with extra lighting
• Restrict public movement in and around the more dangerous parts of your business, such as where machinery is running, or hazardous materials are stored, and
• Adopt policies and systems to make sure staff handle clients’ property carefully.

#4 Claim: Property damage

Accidental and malicious property damage is another major concern, with some insurers saying they account for more than half of overall claims. Be sure to:

• Maintain your business premises with regular repairs and servicing
• Improve your security to deter vandals and other malicious damage, and
• Remove waste material promptly from your site rather than let it build up.

#5 Claim: Machinery/
equipment breakdown

To reduce your risks of machinery or equipment breakdown, which can negatively impact your business, try these approaches:

• Do planned, programmed maintenance and servicing of your machinery and equipment
• Store these items appropriately
• Keep electrical connections free of clutter and dust
• Ensure your gear is used only as intended
• Attend to any incidents, near misses or concerns your operators raise, and
• Have a plan B – a business continuity plan for the unexpected.

Knowing the main risks, and how to better manage them, means you’re better equipped to protect your business. 

Boost your risk management strategies with our advice and insurance coverage. This will provide better protection for your business. We’ll also help review your existing coverage and identify any gaps or underinsurance issues.

Next-Gen Endpoint Protection for SMBs

Cyber threats are evolving faster than ever before, and small and medium-sized businesses (SMBs) face a tough challenge today. With fewer resources compared to big companies, they become prime targets for cyberattacks.

As threats get smarter, SMBs need top-notch endpoint protection more than ever. This article explores next-gen endpoint protection, highlighting how it’s a crucial defense for SMBs against advanced cyber threats.

Understanding Next-Gen Endpoint Protection

At its core, endpoint protection is a security solution designed to detect, prevent, and respond to threats at the device level — be it laptops, desktops, or mobile devices. While traditional antivirus programmes worked fine in the past, they can no longer handle the sophisticated approach of today’s cybercriminals.

That’s where next-gen endpoint protection comes in. Next-gen endpoint protection, however, introduces a suite of technologies including machine learning, behavioural analysis, and endpoint detection and response (EDR), offering a more dynamic and proactive defence system.

Proactive Defence Strategies

Next-gen endpoint protection redefines cyber defence strategies for SMBs through:

Closely monitoring behaviour

These tools watch how systems normally behave, spotting any abnormalities that might signal trouble. This allows them to catch threats early, often before they can do any damage

Staying up-to-date on threats

SMBs get access to the latest info on cyber threats from all over the world. This means they can defend themselves against the latest threats with security updates that happen in real time.

Endpoint Detection and Response

EDR features allow businesses to find and deal with threats that bypass their first line of defence. It’s like having a team of investigators and problem-solvers ready to spring into action.

Tailoring Solutions for SMBs

For small businesses, picking next-gen endpoint protection can create a balance between advanced security and cost-effectiveness. These solutions are designed to fit the needs of small businesses, meaning they’re easy to set up and can grow with your company.

They include user-friendly interfaces and don’t need a lot of upkeep, so SMBs can keep their focus on running their business while still staying safe from cyber threats.

Benefits of Next-Gen Endpoint Protection

Using state-of-the-art tech like AI and machine learning, next-gen endpoint protection offers several benefits for organisations serious about cybersecurity.

By tapping into these advanced tools, it can spot and stop emerging cyber threats before they wreak havoc, giving organisations a stronger shield against the ever-shifting threat landscape. Here’s a look at a few of the benefits:

Advanced threat prevention

Next-gen endpoint protection employs sophisticated threat prevention methods to proactively identify and stop evolving cyber threats.

Enhanced detection and response

Unlike traditional endpoint security solutions, next-gen endpoint protection platforms excel in both detecting and responding to threats promptly, improving overall cybersecurity posture.

Comprehensive endpoint security

These solutions provide holistic protection for endpoints, including desktops, laptops, mobile devices, and servers, ensuring all entry points are safeguarded.

Challenges and Considerations

Even though next-gen endpoint protection offers great perks, small businesses can still run into hurdles like tight budgets, tricky tech setups, and the need to train employees. SMBs need to find a solution that fits their needs and resources while making sure everyone on the team knows the basics of staying safe online.

Future Trends and Innovations

In the future, advanced endpoint protection will start using more and more predictive analytics, AI-driven threat prevention, and automation. The zero-trust security model — a cybersecurity approach based on the principle of “never trust, always verify” — is also gaining traction, offering a more comprehensive approach to cybersecurity.

Using advanced endpoint protection is now a non-negotiable for SMBs looking to defend against an increasing risk of cyber threats. To strengthen your security and set yourself up for long-term success, you have to stay up-to-date with the latest tech and take proactive measures.

It’s critical to understand the importance of next-gen protection and take action as soon as possible. Safeguard your assets before you become another cyberattack statistic.

SMEs face a raft of risks with the ongoing transition to source energy from renewable options. This article will give you a global and national context, explain what you may face, and offer tips on risk management.

On a global bandwagon

Across the world, economies and societies are moving away from fossil fuels (such as oil, natural gas, and coal) to renewable energy sources. The focus is on generating power from wind, sun, waves, hydrogen, geothermal, biofuels, and methane.

But it’s a long road for countries that have signed the Paris Agreement to reach net zero greenhouse gas emissions by 2050. 

Worldwide, 80% of energy production comes from fossil fuels. They account for 75% of emissions and almost 90% of all carbon dioxide emissions. Meanwhile, less than a third of global production of electricity comes from renewable sources, according to the United Nations.

On average, each Australian uses 54,286 kilowatt hours of electricity per year. This makes us per capita number two on the list for 2022, just behind the US, according to Our World in Data’s figures on fossil-fuel consumption.

The ‘Climate Risk Index’

A recently developed climate risk index examines risk to the Australian energy grid under different climate scenarios. 

The index shows that under current and committed renewable actions, more than a quarter of Australia’s generators would be at the highest operational risk by 2050 if the average temperature increased by 2^oC. However, 43% of our generation capacity would be at the same risk if there was a 4^oC rise. 

There are other risk indices. Find out more about the risks facing properties in your area via the Climate Council’s Risk Map of Australia. Your state or territory government may have more detailed maps, such as this one for NSW.

To manage these risks, Australia’s existing infrastructure should be revamped for resilience against floods, fire, heat, and other extreme weather events. 

Why risks vary

Risks are localised because Australia has diverse climates and regional landscapes where different energy sources will feature. For example, wind power suits Victoria and South Australia, while solar is preferred elsewhere. Another risk factor is whether a state or territory is connected to the National Electricity Market. Western Australia and the Northern Territory’s electricity grids are independent, so remain more exposed to risk.

Meanwhile, the Clean Energy Australia Report 2023 talks about this variance of economic risks. 

Also, there’s been some softening in the take-up of corporate renewable power purchase agreements (PPA). That’s due to projected supply constraints, such as grid connections, and development risks. This may change, however, with more federal and state government programs announcing developments.

Helping businesses become more resilient

SMEs can manage some of the risks by incorporating environmental and social government (ESG) principles into their strategy and operations. This makes good business sense as it dovetails with the changing expectations of customers, communities, and regulators. 

Embracing ESG boosts your business reputation as ethical and sustainable. The Climateworks Centre estimates investing in ‘energy productivity’ could increase SME profits by up to 10%. Find out more about their Energy Productivity Index for Companies.

Another move is to create your own business energy resilience plan. This could include:

• Installing solar panels, heat pumps, or other devices where possible
• Investing in battery energy storage – your own or as part of a collective
• Look into load shifting to vary the time you use energy so you pay off-peak rates, where possible
• Maintain and update your energy-related equipment, such as hot water systems, air conditions, chillers, pumps, etc.
• Reach out to your local, state/territory/federal government grants, training, advice or rebate programs to help you transition to renewable energy and/or lower your energy consumption. It could be as simple as installing new LED lights for old.

As well, your business could earn a 20% tax deduction for efficient energy use this financial year. 

Switch on to better risk management

Planning for energy resiliency is in your hands, but you won’t need to go it alone. Partner with us for help to navigate these new risks and secure a stronger business future.

NSW is looking to make latent defects insurance (LDI) compulsory for high-rise residential buildings by 2028. This transformative move has been described as a “game changer” by insurance law firm Wotton + Kearney.

Read on to find out more about latent defects insurance and the mooted changes in NSW.

The Building Compliance Crisis

Industry commentators argue building standards and quality slumped with the privatisation of building certification, although it’s true local governments also still certify. This was followed by a significant increase in high-rise developments.

Next, major structural issues cropped up in Sydney’s Opal Towers and Mascot Towers, and many others, particularly since 2018.  When residents had to be evacuated due to safety concerns, it highlighted a lack of consumer protection.

Six Pillars of Reform

NSW’s response was to unfurl six pillars of reforms:

• Changes to laws and regulations
• A building ratings system
• Better training to boost skills and capabilities in the industry
• Better procurement methods to ensure contracts meet higher standards
• Digital transformation of the industry
• Making NSW a leader in modern construction methods through quality research

An NSW Building Commissioner was appointed in 2019 and has their own government department to oversee construction industry regulation. As well, registration rules are tighter, there are mandatory building inspections and design compliance declarations. Laws that followed included the Building Product Safety Act, Design and Building Practitioners Act and the Residential Apartments Building Act.

Introducing … Latent Defects Insurance (LDI) in NSW

NSW is the first Australian state to flag it will introduce a 10-year liability insurance, also known as LDI insurance. It makes sense because with Sydney’s population expected to soar to eight million by 2050, new residential development is expected to focus more on high-rise to accommodate this surge.

LDI is primarily for residential buildings, but also suitable for shops, carparks, and hospitals (class 2-9 inclusive under the National Construction Code).

The move to introduce LDI happened through the passing of the Building and Other Fair Trading Legislation Amendment Bill 2022 (NSW) in late 2022. It gives developers of class 2 builders the option to secure LDI instead of the current strata bond scheme to insure against serious defects in common property(ies) building elements. Often, LDI is more economical than the 2% strata bond.

The Australian Capital Territory is also looking to introduce a similar law.

How does LDI work?

Before construction starts, the developer will secure an LDI policy and link it to the building, not an entity or person. Only developers with a 3-gold star or higher score via the Independent Construction Industry Rating Tool (iCIRT) would be eligible.

An LDI policy would cover the decade after an occupation certificate is issued. It aims to cover building owners, and subsequent owners, to claim for latent building defects. That’s instead of the option of suing the building professionals responsible.

The policy covers major elements, such as structural (load bearing), and fire safety systems. Typically, LDI covers structural defects relating to the design, plan, specification, workmanship, or materials as well as waterproofing failure.

Here’s what could trigger a LDI policy:

• A defect in the building
• Physical damage
• The imminent threat of physical damage.

Under LDI insurance, insurers don’t need to understand who’s liable for causing a defect before they settle a claim. That avoids a long and costly court battle.

Exclusions to LDI include fire, storm, gradual deterioration, accidental damage, and corrosion. As well, equipment, non-structural works, fixtures, and fittings are not covered.

LDI does not mean a consumer can not sue, but having such a policy means your business is placing the litigation risk onto your insurer. The policy covers building repairs, and you can add coverage for accommodation expenses for building tenants/owners forced to evacuate if the building is unsafe or it’s being repaired.

Your next step

As a builder/developer, it’s timely to discuss LDI coverage before you start construction. We can help you comply with changing regulations.

Update your insurance with us. There are already a range of insurers offering LDI policies – let us guide you through their offerings to find the best one for your unique business.