Labour Force

1. Labour Force Tailored insurance for the labour hire industry

2. Labour hire • Has existed in the Australian commercial landscape for approximately 40 years – white and blue collar • Sustained exponential growth sees this industry segment turnover approaching $20 billion • Flexible and adaptive industry that reacts to market and industry needs • Compliments a variety of important roles for business – IR, HR, OH&S and recruitment “try before you buy” • Lifestyle choice for an increasing number of Australians who prefer to work casually for labour hire firms • Plays a role in the development of new enterprises by allowing the labour force to be tailored to the phase of the project

3. Recruitment and Labour Hire Companies in Australia and New Zealand • Labour hire initially commenced as an off shoot of permanent recruitment companies • As skills became developed employees of the recruitment companies left and commenced their own business to fill opportunities in labour hire • Now some labour hire companies also provide permanent recruitment services, or in a lot of cases provide “temp to perm” services. • Labour hire companies enter the market either in a niche area/industry or profession, or provide labour to a broad cross section of industries • Labour hire companies with the appropriate skill levels also include the following services; • Payroll management services • Employment services via Government funded agencies • Training via a Registered Training Organisation or directly • Apprenticeship placement via a Group Training organisation • Specialised consulting in related areas e.g. employment consulting services

4. The scenario • As the labour hire industry has grown underwriters have learned of exposures to their liability programs • Industry growth saw increased reluctance to provide terms for GL cover • RCSA scheme developed by Park Lane Insurance Brokers, provided options for members • Park Lane went into liquidation, scheme subsequently taken over by ZIB, and underwritten by Liberty • Hard market saw further withdrawals by underwriters and imposition of preconditions to indemnity in RCSA scheme

5. Cover issues • Supply of “on-hired” labour simultaneously to many industry segments is a concern for liability insurers • We contend they are in the business of recruiting, placement and managing labour – not the business of their “host employer” clients. Best outcomes follow risk management of the employment related activities • Heavily influenced by contractual requirements and statutory obligations • Employer has vicarious liability for employees working under the direction, supervision, control and environment of their clients – (Deutz Engineering V Skilled Engineering) • Exposures can exist quite simply in areas not readily covered in standard GL policy (e.g. motor vehicles, cargo etc) • Professional indemnity issues exist for the recruitment process itself as well as for the “quality” of work performed by the worker • Australian legislation makes it compulsory for every employer to have workers compensation insurance for their employees

6. The solution • A “combined” liability policy specifically designed for and promoted to labour industry participants • The package automatically includes the following components • Broadform Public and Products liability – limits $10m or $20m • Professional Indemnity • Management Liability • Fidelity • Representation Costs at Enquiries • Statutory Fines and Penalties • Cyber Liability • Employment Practices Liability

7. Key components • Broadform / Public and Products Liability • Includes contractors as an insured entity • Does not have any professional exclusion relating to property damage or personal injury in relation to advice, which is not given for a fee • Includes some cover for registered vehicles being driven by “on-hired” workers • Includes liability for damage to goods being transported • Provides waiver of subrogation to principals and where allowed, waiver of Proportionate Liability legislation • Includes an indemnity write back where a contract contains an indemnity or hold harmless by the Host Employer in favour of the insured

8. Key components (cont) • Professional Indemnity • Includes single Director “Pty Ltd” contractors as the insured entity • Includes vicarious liability for “on hired” professionals • Moves the property damage and personal injury matters to the liability section, thus avoiding possible “gaps” in cover that can occur between insurers • Where allowed, provides for waiver of proportionate liability provisions of legislation and waiver of subrogation.

9. Key components (cont) • Management Liability • Covers Directors, management and the Company for liability for “wrongful acts” • Provides initial support for management of serious incidents/injuries • Provides cover for representation costs at enquiries for the entity and individual • Where permissible provides cover for certain fines and penalties for the entity and individual • Extends to cover Employment Practices liability • Extends to cover Cyber liability

10. Opportunity • Ability to market the leading liability package to new and existing labour industry clients • Removes uncertainty of the “pre-conditions” to indemnity that rival covers can have • Broadest cover available for labour industry participants • Specifically tailored for the industry • Wrapped cover with competitive packaged price • One insurer, no gaps

11. The process • Brokers to their existing or targeted labour industry clients; labour hire firms, recruitment firms, group training organisations and contractors who supply labour • Enquire at the Wellington Underwriting Agencies Pty Ltd website www.wellingtonu.com.auor call / email one of our underwriters • Send the completed Labour Force application form to Wellington Underwriting • Wellington Underwriting will conduct a prompt assessment of the information, liaise with you as necessary and provide a detailed Labour Force quote • Notification of acceptance of quote to Wellington Underwriting will allow the cover to be confirmed and the risk bound • Underwritten by Lloyd’s of London

12. Thank you Wellington Underwriting Agencies Pty Ltd is a subsidiary of Cowden Limited, AFSL 241065 Brian Atkin Mob: 0419 914 343 brian.atkin@wellingtonu.com.au Megan Sheehan Mob: 0409 914 899 megan.sheehan@wellingtonu.com.au www.wellingtonu.com.au