Professional Insurance - Resources to Find Providers

Money
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The Insurance pandemic that will affect anyone wanting to insure their home extension, garage, swimming pool or new build / pre purchase I am told by over 35 insurance compnanies, is nothing new.

Everyone will be affected by the way Insurance Underwriters, Companies and Brokers have acted, and it didn’t start at the beginning of 2020.

Here is a very basic example of what I am talking about. By law, you must have a Geotechncial assessment of the land you want to build on to make sure your dream construction will stand the test of time.

All too often it doesn’t and you will want to approach your builder, they will pass it to the structural engineer, you will be billed at every stage. Everyone will deny wrong doing. Mostly the the first port (Geo) will be blamed. I know this from personal experience. Have gone to mediation for such claims and been the only practitioner in the room. The rest are the insurance companies representing their clients. The ‘commercial decision’ is that everyone pitch in a few thousand and the people will accept the $100k or so, enough to fill the cracks, paint the place and sign a no further claims agreement. This is a true story.

Geotechnical Engineers are not required by law to hold Professional Indemnity Insurance. The global insurance industry has decided that they will not insure anything that mentions Geotechnical, because, they had so many enormous claims. The head of the Insurance Council of Australia told me “…to be frank, no one will touch anything with geo in it. They are wishy washy and all ways blame the weather or some other non tangible cause.” “The industry does not have the capacity or appetite for this sector”. “You don’t need to be a rocket scientist or read the financial times to know that the industry has been in crisis since 2011.” Lost their appetite and capacity - maybe the are suffering from effluenza

After 33 years on continuous insurance as a Professional Geotechnical Engineer, our insurer for the past 10 or so years has declined to renew. Firstly, they sent through three forms on financial and risk topics then another form about how we are doing in the Covid stakes and a third one that put us in the Architects and Professional Engineering category. After paying our Chartered Accountant to produce the correct figures, they took a week to consider and said they wouldn’t cover anything with Geotechnical in the title.

So. We don’t have the minimum cover to work with our clients of $1,000,000. Our clients are trusted builders and insist on siting insurances a month before they are due. We won’t work with anyone who isn’t covered either. We asked for the $5m possibility so that we could work with an Airport Authority and no less than 20 insurers knocked us back without question.

As the biggest asset you have is probably your house, it would be a pity to go through it collapsing and getting blood from a stone, because no one is insured. We have walked away from putting in a few bucks to make the problem disappear. Why would we pay money, when the very act of doing that is admittance that you were in the wrong. We were not wrong. It was certainly not our fault that the architect, structural engineer, builder etc. did not read the comprehensive report we provided which states what the depth and type of foundations and footings are required, as indicated by the type of land where the structure would be built. We go out to more sites to fix shonky jobs than do the job right the first time / every time than we do for those who must get it right the first time. Repeat business is terrible for us.

We are the type of service that everyone must have, but if no one will insure, then we are out of business. We have kept all our staff on, we are investing everything we have (and don’t have) as a family business to keep it all going. Made it through GFC, Covid so far and packing up next week if we can’t get insurance. Everybody loses their job Even though they are warning that we can expect a 400% jump in premium (we pay $4,500 pa. IF anyone would take it up, but even a $100k excess - still no one is biting. THEN, unless we make over $2m we won’t be touched!

To add insult, I am told by several brokers that this situation has arisen because all insurances come from Europe. They had a terrible time following the incineration of public housing following cladding issues. Oh, and the bushfires were terrible. Poor us. That’s what Geotechnical Engineers do isn’t it?

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Welcome to the community @paula,

That is an interesting and disturbing history you wrote. I was tempted to move it to Building Oversight Failures but it is not an oversight failure, it is worse.

It is also not just COVID-19, not just bush fires, it is where government policy (and often the absence of any) and private enterprise meet and celebrate ‘the problem is over there not over here’ so not our worry or problem.

I hope you can find insurance, and at a cost that does not put you out of business. Plz let us know how you go.

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Hi @Paula, and welcome. I have renamed your thread to better reflect what you have written about. I have also moved it to the Money topic where insurance matters go.

I am very sorry for your plight and I hear your frustration. I suspect that your industry is one of many this is or will happen to as a result of the massive payouts for insurers overseas, and the large payouts here in Australia (by our standards). No doubt the underwriters will be doing everything they can to ameliorate their risk exposure, and recover lost earnings.

I suspect that the ructions we are seeing resulting from global warming and COVID are only just across the world are only just the very first ripples in a tsunami of changes.

I sincerly hope that you are not forced to close after 33 years. We need to keep professionals with integrity providing accurate information in employment.

Let us know how it goes.

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The Professional Indemnity market has undergone changes over the last few years globally, driven by higher frequency claims and poor underwriting returns.

To give some additional clarity on the issue raised by OP @Paula with the Insurance Council:

  • Professional Indemnity Insurance is still available for some Geo-Technical engineers.

  • The profession can be considered high risk by insurers, this risk will typically be reflected in willingness by some insurers to provide cover, as well as the price. Providing cover is on a case by case basis.

  • In preparing our response for @Paula we identified two underwriters who will consider providing cover on a selective basis.

  • Both underwriters indicated that they look for a good claims history, presented in a detailed proposal from a broker with experience in the field, as a pre-cursor to considering providing cover.

Definitely a problematic profession to insure, but there is still cover available at a price for clients with a good insurance history. Still considered to be high risk, but a good business like the one run by @Paula, should be able to find cover at a price if using the right broker.

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Is the Karl Sullivan mentioned here you?

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nb. @Karl_Sullivan has been welcomed and advised of the need to identify business relationships, and the FAQ/TOS.

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Apologies. No I am not an insurance broker. I am from the Insurance Council, who were identified by @Paula in her original post.

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Hi @syncretic - yes that’s me, sorry still learning the ropes of this forum. Have added detail to my profile that hopefully helps.

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Hello @Karl_Sullivan. Thank your for your transaparency. And thanks to those of you helped me get the post in a better spot. To the point - can you recommend a ‘right broker’? My current broker has gone to 17 Insurers and all have declined. I have several brokers on the go now with the knowledge of our broker who has given up. I am mindful of confidentiality, but in essence, all brokers go to the same market in Europe and that’s not great for Australians.

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@Paula, since your need may be getting time critical and forums are loosely coupled experiences, you might make contact the Insurance Council for assistance. Their web page is at

https://www.insurancecouncil.com.au/

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Thanks @PhilT I did contact @Karl_Sullivan with no reply, I went to the insurance council site and they say that they are not allowed to give individual advice. I do feel better that someone is understanding we are in pain. It’s not over yet. I am told today is the busiest day of the year for all insurance people. I have to be patient. It seems that we are not alone, but I’ve run out of time to organise for others right now. One employee has been 3rd party C19 affected and waiting to be tested. At least he won’t lose his job now, as we won’t have to pay outrageous insurances! There’s the silver lining :slight_smile:

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Hello @Paula, apologies for the delay. The Insurance Council can not provide recommendations as to which broker you should approach. Your point that its all the same regardless, as they all approach the same market, is not correct.

There is a large amount of difference between brokers. Its akin to somebody saying that all geotechnical engineers are the same, as they do the same work, in the same country. Clearly this statement lacks a full understanding of geotechnical engineers - something I will admit too. There are deeply experienced geotechnical engineers with acute skills in particular engineering problems, and there are others with less experience who may consult on less complicated sites. Picking the right one for the job is important.

Similarly with brokers, there are firms who specialise in PI and brokers who have deep commercial reach with insurers. Most importantly, there are brokers who can develop the best possible proposal for cover, for consideration by underwriters. Given the high risk nature of geotechnical engineering (or the perception thereof) your best chance of securing cover is to use a broker with the right experience and reach, who can present your business well to right insurers for their consideration.

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@Karl_Sullivan, How is one expected to find a broker when it seems, as with much of the medical profession, nobody knows or more likely nobody tells? Ring every broker on the continent to find ‘The One’? Is there a directory of brokers with their specialties? If not why not establish one on behalf of the council’s constituency?

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A list or advice is already available. One can contact these guys and ask for a broker which specialises in a particular field or speciality…https://www.niba.com.au/html/default.cfm.

They also have a broker search webpage…

which is useful as well.

EDIT: There is also industry associations which members can reach out to as they provide support to its members. The one for Geotechnical Engineers is https://australiangeomechanics.org/. The association I belong to (another field and association) offers PI insurance support and advice to its members (one can even join a group cover with other professionals in the same field through the association)…and can also generally have information about brokers/insurers which provide specialised cover in the association’s field.

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A google search will turn up many options that can be tried, including the National Insurance Brokers Association, they run a broker listing for Australia www.needabroker.com.au - from that list you can search for brokers with all kinds of specialty services.

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Thanks for those references @phb, and @Karl_Sullivan . I suspect they could be useful for a wider audience than just the present topic.

edit: I am also modifying the topic title so others interested in professional insurance might be more inclined to join in.

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Thanks to all of you @PhilT, @phb and @Karl_Sullivan. I went through NIBA and they gave me the names of two Brokers out of 150 who deal in Geotechnical Engineering PI Insurance. One was our current Broker, who has tried 17 Underwriters and was first point of denial by Chubb citing an oversight that they had insured us for the past ten years without noticing. I am now in touch with the other, also a third is listed there who has been looking for me on recommendation from my current broker. We have always used a broker.

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@PhilT in response to let us know how it goes. Our vehicle insurances are expiring and so I am looking at options via Insurance Council of Australia’s find an insurer on their website. I chose Budget first. It took 1.5 hours of applying and chatting and being referred to a 1800 number to be told they could not insure me because there is no ‘red book’ market value for a 2014 Kia Sorrento. And, because the company bought the car more than twelve months ago, they won’t insure it. I asked if we could negotiate ‘agreed value’, but a definite no. Can I find out @Karl_Sullivan if I am being blacklisted somehow? Still no PI Insurance from the two out of 150 brokers on the NIBA. If it is only me having this trouble, obviously I am the problem!

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This is from Canstar…

Many Australian insurers that offer personal car insurance also offer a commercial car insurance product for business fleets ranging from a single vehicle to as many as twenty different vehicles including trucks, 4WDs, earth-moving vehicles and so on. However, insurers that offer commercial car insurance sometimes only do so through licensed brokers, which means obtaining insurance for your business’s vehicles may be less straightforward than applying online for a personal car insurance policy.

It might be one that need also to go through a broker as it appears that insurers won’t necessarily deal directly with the one being insured.

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That is a shocker for an excuse.

https://www.redbook.com.au/cars/results?q=((Make%3D[Kia]%26Model%3D[Sorento])%26YearRange%3Drange[2014..2014])

When I get insulted by a ridiculous price or reason I usually respond with ‘Just tell me why you don’t want to do it’.

Checking Kia models, there are a few entries without value ranges including
2014 Kia Sorento Platinum Auto 4WD MY14
2014 Kia Sorento Si Auto MY14
2014 Kia Sorento Si Manual 4WD MY14
2014 Kia Sorento Si Auto MY14

But values are shown for these models
2014 Kia Sorento SLi Auto MY14
2014 Kia Sorento SLi Auto 4WD MY14
2014 Kia Sorento Si Auto 4WD MY14

Check your model for each of the probably two entries to see if one entry is valued. You might need to engage with Redbook! I am suspicious they may have a data problem across the 12 entries. I did not check them all.

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