Can you afford not to be insured?

There are a multitude of risks facing small businesses in Australia today. New legislation is always on the horizon; workplace accidents are now subject to high statutory scrutiny, employment disputes can be expensive affairs, whilst employee theft and commercial disputes are on the rise. Owners and senior managers of private companies can be held personally liable for the consequences of unintended errors arising from their daily actions, or even the actions of employees.

Why do private companies need Management Liability Insurance?
To operate a business effectively, managers and employees need the confidence that they are personally protected and the business is adequately covered from a wide range of potential liabilities. The cost of legal proceedings can have a catastrophic impact on the finances of a company, possibly sending the company into insolvency and leaving directors and managers financially exposed.

This is set against a challenging economic environment where companies can expect increased exposure to liability and fraud. Employees and the public are aware of their rights, have access to a disputes body and are becoming more litigious. Unfair dismissal and other employment related claims are not only bad publicity, but they are expensive to defend in Court.

In Australia, there is a strict legislative environment with stringent regulatory requirements. Certain laws can impose personal liability on individual directors and officers for misconduct even where they may not have had any personal involvement in a breach.

New legislation is regularly being introduced, such as Work Health and Safety legislation, which has placed an increased responsibility on directors and officers to ensure that their company complies with health and safety obligations. Failure to do so can result in substantial penalties against the company, with directors and/or senior managers also facing personal fines.

Are private company directors and officers really exposed?
There are over 700 Commonwealth, State and Territory statutory provisions which expose private company directors and officers to liability when their company is deemed to have broken the law. The Work, Health and Safety legislation is a prime example. The revised legislation provides that directors and officers must exercise due diligence to ensure the company complies with its obligations. Failure to do so could mean a company is fined up to $500,000 and personal fines to Directors and Officers of up to $100,000. If death or serious injury occurs as the result of a breach, the fines increase up to $3 million for the company and $600,000 for the individual.

The law also holds a wide definition of “director” or “officer.” Generally the terms are defined as a person who makes, or participates in making, decisions that affect the whole or a substantial part of the business. Not only can decision makers be held personally liable, but there are a host of regulators scrutinising them to ensure they act correctly and do not fall foul of the law. This includes APRA, ASIC and the ACCC. Some provisions apply strict liability to directors even when the situation is out of their direct personal control.

Claims can be brought against directors and officers from every angle; disgruntled shareholders, customers, employees, competitors and creditors all have a legal entitlement to launch action if they feel directors and officers have not lived up to their responsibilities. That’s why it is imperative to have a Management Liability policy that covers your business and its management team.

The following claims examples illustrate the type of issues recently seen in Australia. Claims can affect a business and its employees, the well-being of an individual or group, or even the ability of a company to stay in business. Without the protection of a Management Liability Insurance Policy, the company and/or individuals may be liable for the financial exposures described below.

Directors & Officers Liability
1. A Company published a book which was authored by one of its employees and contained statements which referred to the claimant. The claimant alleged that the statements were defamatory and/or constituted a malicious fabrication. The Company bore the heavy financial burden of establishing the truth of the statements in order to defend the claim. The Company was entitled to defence costs that were covered by their Management Liability policy.

2. A customer database was illegally breached and personal information (names, dates of birth, addresses and credit card numbers) may have been compromised. The costs of advising the customers plus the legal representation at the privacy commission investigation were covered by their Management Liability Policy.

Statutory Liability
An employee was seriously injured at work following equipment failure. The company was fined for their breaches of Work Health & Safety obligations after entering guilty pleas on one count. The Defence costs and statutory penalty were covered by their Management Liability policy.

Environmental Prosecution
Under the Environment Protection Act, directors are liable for prosecution if their business is suspected of pollution damage. In a recent case, charges against a director went ahead – even though the company had confirmed their tanks did not even hold the contaminant identified in an adjacent stream. The defence costs were covered.

Corporate Legal Liability
1. The Company owned two businesses that provided tourism services. Over the previous two years, the economic climate had negatively impacted the profitability of both businesses leading to them deciding to sell one of the businesses. After the sale, the purchaser initiated proceedings alleging misleading and deceptive conduct by the seller in respect of the financial information provided. The defence costs for the insured were covered by the Management Liability policy.

2. A company was charged with four environmental offences due to activity at their business property that affected protected fauna. The proceedings were successfully defended at trial. Substantial defence costs were incurred that were covered by the Management Liability policy.

Fire Safety Regulations
Directors were prosecuted by a local authority after consistently failing to comply with fire regulations. They claimed that the work required to their premises by the local authority was unnecessary. The directors eventually agreed on a settlement – defence costs exceeded $100,000 which was covered by their Management Liability policy.

Roof Company and director fined $100,000
A roofing company and its director were fined $100,000 after a worker suffered head and neck injuries when he fell through a roof.
The director pleaded guilty for failing to provide a safe work environment and, by that failure, caused serious harm to a contractor.

Occupational Heath and Safety
A Golf Club takes on a part-time worker to cut the rough alongside the first hole. Serious foot injuries are sustained when the worker alights from a ride on mower to retrieve 3 balls lying in the grass. An investigation finds breaches of workplace health and safety obligations and the Industrial Magistrate awards a 5 figure penalty. Once again, this was covered by the Club’s Management Liability policy.

Employment practices
1. A company implements a scheme to transfer all employees in one of its units to a subsidiary. The transfer means the employees are no longer covered by certain industrial instruments. The scheme is found to be discriminatory and in breach of disclosure obligations. Legal costs and penalties were insured in this instance.

2. An employee of an insured was made redundant and brought an employment claim for unfair dismissal on the basis of racial discrimination. An employment tribunal hearing took place and the defence costs were covered by the Management Liability policy.

Employee Dishonesty
1. A significant number of frauds were perpetrated by employees of a company by creating fictitious invoices for services not provided. The client sustained significant direct financial loss as a result of paying those invoices. The direct financial losses were covered by the Management Liability policy.

2. A company discovered that a senior accounts manager had been electronically transferring money from a subsidiary company’s bank account into her own account. The individual had been with the company for five years and was considered a trusted employee. The direct financial losses were recovered by the Management Liability policy.


Coverage Summary
A Management Liability Insurance policy will address the serious risks confronting private companies and their management teams. Management Liability Policies generally have six coverage sections each with their own limits, subject to a policy maximum limit of liability that covers the events detailed above.

Directors and Officers Liability:
• Provides cover for claims against directors and officers for any actual or alleged wrongful acts in the performance of their duties.
• Unlimited Run-off cover for retired directors and officers.
• Full limit for investigation and pre-investigation costs.
• No pollution exclusion for directors and officer liability section.

Corporate Legal Liability (entity cover):
• Provides cover for claims against the company for any actual or alleged wrongful acts.
• Specific public relations expenses extension.
• Breach of contract defence costs extension.
• Tax audit expenses extension.

Statutory Liability:
• Provides cover for investigations, defence and possible penalties that may be awarded for a statutory breach.
• Emergency defence costs extension.
• Work health and safety extension.

Employment Practices Liability:
• Provides cover for actual or alleged employment related wrongful acts by or against employees.
• Contractual liability defence costs extension.
• Broad definition of employment related wrongful act.

Employee Dishonesty:
• Provides cover for direct financial loss to the company resulting from a fraudulent or dishonest act of an employee.
• Full limit for investigator costs to determine direct financial loss.
• Worldwide cover excluding USA & Canada.

Kidnap & Extortion:
• Provides cover for loss arising from kidnapping, hijacking, wrongful detention, extortion, cyber extortion and political threat.
• Broad definition of insured person and loss.
• Cyber extortion expense cover for threats made against the company.

The importance of this cover to your business cannot be emphasised enough and should be a part of every company’s insurance program. The claims/circumstances detailed above are real and they will continue to happen in the future.

The premium will vary based on the size of your business, number of staff, etc.

Example 1: Rental Income: $1.5M
Number of Staff: 4
Limit of Liability: $1M
Approximate Premium: $1,200

Example 2: Rental Income: $400K
Number of Staff: 3
Limit of Liability: $500K
Approximate Premium: $960

Example 3: Rental Income: $850K
Number of Staff: 4
Limit of Liability: $2M
Approximate Premium: $1,900

NOTE: These quotations are an indication only with some sections providing a lower limit than shown and are subject to an excess (deductible). The example premiums include all charges and fees. This is general advice only and should not be used in isolation. Ensure you consult a qualified insurance professional.


Phone: 1300 – 306- 571 Email:

Terry Lane
Terry Lane
Managing Director Midland Insurance Brokers

SSAA Awards for Excellence Program – Q & A

It’s all about team work according to 2013 Expansion of the year winners, Kotara Safe n Sound. We spoke to Amanda Skehan, Store Manager at the facility about what it meant for her team, and why all SSAA members should consider nominating for an award in 2014.

What did it mean for the facility to win the 2013 Expansion of the year?
The main benefit of receiving the award was being recognised by the industry and having the quality of our facility and the expansion acknowledged by our peers.

Do you feel it benefited your business?
Yes. The recognition was really important for us internally, I feel our team are really proud of what they have achieved.

What other impacts did winning the award have on your staff?
It gave our staff greater pride in what they’re doing and was a reward for all their hard work and effort. Obviously the operation and the build are really important but at the end of the day it’s our team that love what they are doing and that comes across to our customers in the quality of service they receive.

Would you nominate for an award again?
Absolutely, although at this stage I’m unsure if we will be nominating for 2014.

Would you recommend award nomination to other SSAA members?
Definitely! It’s a great reward for your team to be recognised by the industry and to feel part of it. After all, they are the frontline of the business.

Have there been any major changes at your facility since 2013?
Not in terms of more building or anything material, but I think our team have a stronger understanding of the quality of our offering in the market.
What do you think sets your facility apart/what do you attribute to your success?
Our customer service by far. We are very good at meeting customers’ needs rather than just offering them a storage unit. Our goal is to make the customers experience easy and as hassle free as possible.

Business Blogging

These days, having a website has become an essential part of every self storage operators marketing arsenal. But I’m wondering, how many of you have thought about creating a blog?

A lot of today’s blogs may be little more than an individual’s rantings or some teenager reaching out to the world saying, LOOK AT ME! However with the social networking and on-line media explosion, more and more businesses are realising the importance of business blogging, and I’m not talking about peanut sized companies either. Serious companies like General Motors, McDonald’s, Kodak, GE and Coca Cola just to name a few are taking to the blogosphere. So if it’s good enough for mega companies like these to blog, there’s little doubt in my mind that this is an important business phenomenon.

What about the self storage industry? How many of you are into blogging and is it really worth considering? Well, I did a little research and lo and behold there are plenty of self storage blogs. There are some 32 000 postings for the phrase ‘self storage’ listed on Google’s blog search engine, . As you might expect, the majority of them at this stage are located in the USA or the UK. Here’s a couple of samples (chosen at random) you might like to look at:
To get a better idea for what’s out there go to Google Blog search and have a browse around – you might get some good ideas.

Why you should think about creating a business blog
Here are four reasons to consider adding blogging to your own marketing arsenal:

1. You’ll be seen as an expert in your niche
If your blog is a good one, you will build credibility with your readers and they will come to rely on you for the latest thinking, news and trends in your field of expertise or interest. In fact, some bloggers have greater audiences than newspapers, radio or TV channels. As a though leader for a given topic, you can influence the reader through a soft sell approach. Furthermore, a good blog draws in the visitor, making people want to return again and again to see what new stuff has been posted.

2. Blogs have a personal touch
People regard you as a human being, someone they can relate to. THe personal voice of your blog is more ‘real’ than the voice of your company’s site. It’s more disarming and makes your company seem more approachable. People buy from people, not from faceless corporate entities.

3. Blogs convert into sales and profits
Those companies who actively use blogs as part of their marketing program have discovered that blogs bring in more visitors to their website and that a high percentage of those who visit a blog, if properly influenced through that blog’s content, will actually buy from their company.

4. Search engines love blogs
Links are the currency of the web and the more genuine inbound links you have to your website the better. Blogging is a great way to increase the links to your site. Good bloggers link extensively to each other in their blog posts.

Where do I start?
If you would like to give it a try and join the blogosphere, you’ll find it surprisingly simple. No special technical skills are required and most of the blogging services on the net like Blogger the most popular blogging site, are free. Just go to Blogger and sign up for a free account. Pick a suitable name for your blog and a template from the many on offer and start your blog.

Incidentally in case you need further evidence that blogging is here to stay, Blogger was purchased by Google for a small fortune. I’m always very interested in anything Google thinks is going to be big, because usually, they are right.

Peter Thorpe
Peter Thorpe

How to work with different customer behaviour types

With that attitude, I don’t want their business!

This is a comment I hear, believe it or not, from many a sales person. They the go into describing the customer’s controlling nature, including how they would often interrupt and demand the answers they wanted. These sales people have a style mismatch. They were choosing to be upset by the customer’s actions. After letting these people unload, I asked them how they were adapting to the customer. “Adapt?” they asked, puzzled.

You can choose to be hurt or annoyed by the customer’s attitude and take the whole thing personally or you could choose to pay closer attention to your customer and work with them the way they want to be worked with. In particular, allow this customer to have control over the sales call, give them the information they need in the timing they need it, and allow them to cut you off if that’s the way they are choosing to behave. Ultimately when you allow your customer to win, you’ll end up winning too. Your customers don’t necessarily want to be your friends. They want to be your customers because they need your products and services.

So, how do we make sales, not war?
Metaphors such as “I fought the hard fight” or “I infiltrated his defences” are often used to describe the sales process. However, a more elegant and effective sales closing approach is to give the customer what he or she wants in the way they want it with a nice ribbon around the package. When the customer perceives you as the expert who really understands what he or she needs and when you give it to them in the way they recognise as serving their needs, you automatically turn an adversary into an ally. This will turn your customers into lifetime customers and can be quite a satisfying moment for a sales person.

Many people struggle when differentiating multiple customer types, especially when those customers are coming across as rude or demanding. When you know how to adapt your personal selling style to align with that of the customer, you become the point of difference. You become what makes your facility stand out from Jo Blo’s around the corner.

This requires you, as the sales person, to be very aware of your approach to selling and the customer’s approach to buying. For example, high-steadiness behaviour types hate change. When these people have to deal with a sales person, that person represents change and that alone is enough to cause the customer to freeze. High-conscientious types often want detailed facts and figures delivered with precision. We’re most successful when our approach is identical to the customers. So you may find it beneficial to adapt your approach to theirs, even if it’s not your natural style. Sales people who have learned the secret to adapting, profoundly increase their sales because they possess the ability to sell to different kinds of people.

How do you identify the style of your customers?
D – Demanding, directing and domineering. Individuals with this behaviour style are usually ambitious, bold and impatient. They can also be argumentative and stubborn.

I – Interacting, inspiring and influencing. Individuals with this behaviour style are often expressive, charming, optimistic, cheerful and enthusiastic.

S – Supporting, stabilising and steadying. These individuals are usually loyal, calm, patient, cooperative and humble.

C – Conscientious, cautious and correcting. These individuals are often diplomatic, meticulous, private, incisive and exact.

Now that we have classified their behaviours, how do we put this knowledge into action? Firstly, when opening the sales conversation:
Customer behaviour type D – Be clear, specific, brief and to the point.

Customer behaviour type I – Be friendly. Listen for both facts and feelings. Make time for relating and socializing.

Customer behaviour type S – Be genuinely sincere. Create a non-threatening environment for them.

Customer behaviour type C – Ask lost of questions and be patient while they answer in minute detail.

And secondly, to obtain commitment from the customer:
Customer behaviour type D – Briefly highlight their key options and ask for the commitment assertively.

Customer behaviour type I – Inspire them into action. Keep them close, relaxed and friendly.

Customer behaviour type S – Detail how they can take practical action and confirm without pushing or rushing them.

Customer behaviour type C – Create a scheduled approach to implementing action with step-by-step timetables. Reiterate your support.

You can double or even triple your sales by getting a grasp on your customer’s behavioural style. By altering your approach to their behaviour it will make a difference in your sales figures and will turn one-time customers into lifetime customers.

How up-to-date is your marketing program?

Marketing is much more than ads, logo’s and brochures, it’s a complete system that needs to become part of your self storage business from the top to the bottom. The key to any marketing program is consistency and this means you need to think carefully about how your business is portrayed to potential and existing customers, from the staff through to the site, not just the ‘marketing documentation’. Here are a few things to consider…

Your knowledge
As the business owner or manager, it is your knowledge of the business and the industry that will underline the professionalism of your brand. Are you up-to-date on all the latest developments in self storage, do you know about drop down storage, kiosks and other new innovations? Even if your business does not offer these services you need to understand them in case one of your potential customers asks about them.

Do you network with other people who can complement your business, real estate agents, removalists, chamber of commerce and so on? Do you actively seek trends and information on self storage and ancillary services so that you can make pro-active changes to your business and its marketing based on such information? Your knowledge and expertise can be a valuable part of marketing your business, and best of all, it is relatively cheap to maintain and usually only costs some of your time and a bit of a structured approach to make sure you are not letting it slip.

Your strategy
Have you identified exactly who you are marketing your business to? Different people need storage for different reasons. Often target marketing certain groups will give better results than a scatter gun approach, particularly given that self storage is such a local product and local areas have different demographics and customer needs. If you have chosen your target markets, do you know how to reach them, what media they are exposed to, where they frequent and how you can get your message to them?

More importantly, how are you making sure that when they need storage, your business comes to mind. Have you got a multiple contact approach to your marketing so that your potential customers are getting ‘hit’ by your business from more than one source? Do you measure how your marketing strategies are working? Do you have a referral network, is it working? Referrals can be a major source of new customers when managed pro-actively. Do you have a marketing plan and do you stick to it and evaluate it periodically?

Your collateral
Are all your brochures up-to-date and consistent in their branding and messages? Do you have space calculators and other tools to help storers choose the appropriate storage space? Do you have material that explains how self storage works for new customers? Have you got testimonials and other references from customers, and do you use these in your promotional material? Are you using the Standard Storage Agreements and do you have explanatory documents on the main terms? Do you have electronic versions of your documents that you can e-mail to people? Do you provide a point of difference to your competitors in your marketing material? Do you offer insurance to your customers? Do you appeal to customers in your marketing material and appeal to the ‘what’s in it for me’ principle?

Your website
Is your website up-to-date with the services that you offer? How does your website compare to those of your competitors? Are your contact details easy to find including phone and physical address? Do you have useful information available on the benefits of self storage and on-line space calculators? Does your homepage clearly explain why people should sue your self storage centre without having to click for more information? Do you allow for on-line enquiries or bookings?

What incentives are there to get the contact details, or at least e-mail addresses from the people who visit your site? Do you have special ‘on-line’ deals? Do you promote your packaging materials and other merchandise on-line? Is insurance promoted on your website? How will people find your website, is it linked to other sites in your network, is it optimised for local search results with Google?

Your sales pitch
All the marketing in the world is not going to help you if you and your staff do not know how to close the sale. DO you have a documented sales process that outlines the steps involved in understanding the customers needs, matching them up and closing the sale? Are all your staff comfortable and competent at asking potential customers for the sale at the right time, before you lose contact with them (to your competitors)?

Have you identified the specific questions that Storers tend to ask and formulated responses to them that will be different from your competitors? Do you know how to recognise and deter customers that do not fit your business profile? How do you stay in touch with previous customers, do you have a follow-up process? Do you and your staff ask every customer if they need any ancillary products? Do you have a strategy to ensure that every potential customer that visits your site either takes a unit or purchases products before they leave?

If you have answered yes to all these questions then your business probably has a complete marketing program that is entrenched in all parts of your business. If some of these questions got you thinking, then maybe it’s time you thought about your marketing strategy in its entirety and how you could change your practices to improve your sales.

A good marketing strategy is not just about getting people in the door, it’s about getting the right people in the door and having them leave as customers.

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