CROMBIE LOCKWOOD HAVE BEEN SORTING INSURANCE FOR 45 YEARS BY GARY THOMAS For 45 years, Crombie Lockwood Insurance Brokers have been protecting Kiwis from the unwelcome and the unexpected. And we’ve been working with the early childcare sector for over twenty five years with our Child Proof insurance package. During that time we have experienced the Canterbury Earthquakes, and Covid-19 closures which saw the scheme pay in excess of $50 million dollars in Material Damage losses and Business Interruption claims. WEATHER EVENTS LEADING TO HIGH CLAIM VOLUME The North Island of New Zealand has experienced a catastrophic start to 2023 with floods and Cyclone Gabrielle. We believe that claims numbers from these events will be somewhere in the vicinity of the claim volume experienced from the Canterbury Earthquakes. In the early childcare sector alone there’s been in excess of five hundred claims with expected losses to exceed $5 million dollars. Although claim volume could be comparable to post Earthquake levels, the cost is expected to be much lower as the losses suffered are generally related to “partial damage” as opposed to “total loss.” Partial damage is still disruptive requiring extensive clean-up work that can interrupt normal operations for an extended period. THE KNOCK-ON EFFECT FOR CLIENTS The likelihood of New Zealand insurance buyers facing tougher conditions in 2023 is something that we have anticipated for some time. However, the Floods and Cyclone Gabrielle events have accelerated the market change. The geographic nature of the events being in the upper North Island means that most, if not all, insurance companies writing business in New Zealand are impacted. However to date all insurance companies are reporting that they remain financially stable and have sufficient resources to meet their claim obligations to clients. WORKING WITH YOUR BROKER TO HELP NAVIGATE THE HARD INSURANCE MARKET This year’s events demonstrate the need to have robust insurance protection available because the worst can happen. There is no doubt that the world is experiencing more frequent and more severe incidents of extreme weather. This will continue to put pressure on global insurance and reinsurance markets who are seeking sustainable solutions. In New Zealand there will no doubt be an impact on pricing and potentially coverage. PROACTIVE SUPPORT WITH THE CHILD PROOF INSURANCE PACKAGE Within 24 hours of Government Covid-19 Level 4 announcement, our Child Proof insurance team posted an advisory and worked alongside the Early Childhood Council who developed a worksheet for members to calculate their Business Interruption claim for the Level 4 and Level 3 closures. A select panel of assessors was appointed, who quantified the claims and recommended a payment to the insurer. A similar approach was taken in the recent storm events with an agreed formula to pay up to 95% of parent’s fees for the days of closure without the need to provide financials. Three months after Cyclone Gabrielle we are pleased to advise that over two thirds of Business Interruption Claims have now been settled. Progress payments have also been made to pay for repair work completed to date. We participated in two ECC Webinars referring members to our Advice for stormrelated claims advisory (https://www. crombielockwood.co.nz/business/earlychildhood-insurance/advisory-floods/ ) REVIEWING YOUR INSURANCES Your Crombie Lockwood broker works with you to understand your risks so they can ensure you have the correct coverage in place. In this challenging insurance market, and climate environment it’s more important than ever to check that your insurance cover is adequate to minimise the financial impact to your centre. The key considerations are that you have sufficient replacement cover on your Centre Assets, and that your Business Interruption policy is structured to adequately cover your Gross Profit and Key Staff Wages for a period of eighteen or twenty four months. YOUR INSURANCE SORTED 0800 765 429 The information contained in this article is a guide and does not take into account any individual’s or entity’s particular circumstances. Please talk to your Crombie Lockwood broker for advice on your specific circumstance. About the author Gary Thomas is a Senior Commercial Insurance Broker and Scheme Manager at Crombie Lockwood (NZ) Limited managing the Child Proof Insurance Scheme for the Early Childhood sector that insures in excess of 2000 Early Childhood Centres, Kindergartens, Play centres, Home Based, and Oscar Services. crombielockwood.co.nz/childproof June 2023 { 15 }
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