3 top tips from Anna Parker:
1. Pay attention to your insurance policy.
Even if it’s just a bit boring, please just get those documents out, cast your eye over the schedules, look at it and think does that reflect what you want? Are the limits what you actually want? Do you have the insurance you need for the risks that your business has, and other business activities? Work alongside your broker and ask questions be curious about insurance. What does the exclusion mean? Work through your worst-case scenario and think. Have you transferred your risk appropriately to an insurance company and work with your broker alongside with that?
2. Be persistent. Don’t give up.
You might hear a ‘No’, but think to yourself, ‘Maybe, not yet – next year’
3. Be bold!
When you walk into a room, you should know your worth. Know your value, be confident!
insurance, lawyer, broker, policy, business, pay, contract, claim, exclusion, client, professional indemnity, thought, insurance policy, work, insurer, auckland, people, businesses, advice, building
Debra Chantry-Taylor 00:03
So good morning and welcome to another episode of Better Business better life. Today I am joined by the delightful Anna Parker, who is the Senior broker and head of Auckland at Frank risk management. Welcome and lovely to have you here.
Anna Parker 00:15
Thank you so much. Yeah, good morning. And it’s really lovely to be here.
Debra Chantry-Taylor 00:19
So I’m really looking forward to this conversation. We’re gonna be talking about insurance today. And I know for most you probably thinking, oh my goodness, do I really want to listen to this, that’s such a grudge purchase. It’s not something I’m really interested in. But I have to just share with you that Anna and I met through a mutual friend who said we should catch up, we went for a walk and a talk and she shared with me her story. And I just thought, this is somebody I need to get on the podcast and share what she has learned over her years. So we’re not going to start with the story. They’re actually going to ask Anna first of all, like we always do, what’s your professional and personal best and that you can share with the listeners?
Anna Parker 00:50
My professional best was setting up the Auckland office of Frank Risk Management around about a year and a half ago. And I did that with a 10 month old and it was quite a big coup. I mean, you’ll find out later that my story is I left law. So I left law, joined a larger American own broking house then wasn’t sure if broking was actually for me. When to approach the founders of Frank Risk to say actually, ‘What you’re doing is fantastic. You’re a disruptor in the industry. I really like everything about you, please could I set up an Auckland office’ they thought that was a wonderful idea. And here we are a year and a half later, and it’s been a fantastic year. So yeah, that was definitely a professional, best for me.
Debra Chantry-Taylor 01:37
Anna Parker 01:38
In terms of a personal best. I know that, everyone’s gonna say this, but it’s true. So my two and a half year old, I have a two and a half year old girl. And that’s definitely a professional, personal best. Because she’s just so bold, sassy. She’s really determined. She always talks back to me, which I love. strong willed. She puts me in my place. The other day I did a hair shop and doesn’t let me do her hair. And I did her hair, put it on top of her head. And she touched it and said “no, no, mommy, that’s wrong. I want her like Elsa. Elsa has hair that wraps around her neck”. Two and a half telling me how she wants her hair. So I mean, get. So I’m doing her hair. And she said, ‘Mommy, I believe you can do it. Like, try again. Have another go’. And she’s putting me through how to do her hair, which I really love. And then she asked me at the end, ‘How do you feel you did it?’ And I feel like we’re really proud, ‘I nailed the hair style that you want’. Motivations. So that was another proud moment.
Debra Chantry-Taylor 02:42
And it’s so awesome. It sounds like she might pick up some characteristics from a Monday, right? So we were going to talk about your story. And I was like this is really important. So you know, yes, you’re working with Frank risk management right now who’s watching before your staff. But that’s not where you started, right? Your life was very, very different a few years ago, wasn’t it? Yeah, exactly.
Anna Parker 03:00
So you might have picked up an accent already. I’m from England. And I was born in Southampton. I moved over here about 15 years ago, and at which point I for many years was an insurance litigation lawyer. And what that, what that means is the law firm that I worked for was appointed by insurers as a panel law firm to act on claims that were really complex or difficult. So insurers have their own in house claims team. And when anything gets difficult, high value complex, or they just need an external legal counsel, then it gets farmed out to external lawyers. And I was one of those panel law firm. So I acted on a variety of plans across all insurance policies in defense litigation. And I did that for a number of years. And part of what I was discovering was that it’s amazing when your insurance policy responds, and you pay all this money for premiums, and you think, right, well, something’s happened. I have a claim against me. I need my insurance policy to respond to pay for the compensation to pay for legal fees. And most of the time, that was the case, and it was, you know, worked really well to sometimes business owners hadn’t really thought about what their business activities were or exclusions on policies, or was the actual policy going to be triggered by this particular claim circumstance. So part of my role was to explain to different people that their policies weren’t going to respond in a way that they thought and after doing that quite a few times over the years, I thought, I wonder if there’s a better way, a better way to be of service a better way to use this knowledge and skills and actually help people at the beginning stages or during when they don’t have a claim rather than just an A claim experience when there’s nothing I can really do to help them because it’s going to be a decline on their insurance policy. So I decided to leave law and go into broking.
Debra Chantry-Taylor 04:59
And that must be a huge step to make because we all know that lawyers are very well paid. And yeah, yeah, I mean, like not denying that it’s huge amounts of work. But still to take that. So jump from there to insurance broking was massive, right?
Anna Parker 05:11
Yeah, absolutely huge. And also because I had – In New Zealand, they don’t necessarily recognize your English law degree. So I had done law at England, come over here and I want to be a lawyer here and I had to go back to university again. So I ended up with two law degrees that have turned your back on to turn your back on all of that and say, Actually, I just kind of want to help. And there’s just how you feel. And I just felt like, there are there were many insurance lawyers out there. But there weren’t too many who’d actually said, ‘I’m going to leave insurance law. And I’m going to use all of that and help businesses in a different capacity.’ So I thought really motivated by that. That was kind of like my I will do this, this, I could make a difference here. And yeah, so far, those suspicions were proved right. It’s, it’s going really well, I really enjoy it.
Debra Chantry-Taylor 06:06
Excellent. And so what kind of insurance do you do in your current role? So what does Frank risk management actually do?
Anna Parker 06:12
Yeah, so it’s commercial insurance. And that can range from your business assets to so big motor fleets or commercial property buildings, to liability insurance. So my specialty is liability insurance, and that is professional indemnity directors and officers. Liability Insurance covers you for all legal liability you owe or you’re accountable to – to third parties. But there’s a whole raft cyber insurance also falls under the banner of liability. So anything commercial really
Debra Chantry-Taylor 06:48
Fantastic. And I know that when we did our walk and talk, you gave me an example of a client that you work with, but what really struck me was you have a different model of charging, is that right?
Anna Parker 06:57
We do, we don’t believe in commission. So traditional, the traditional broking model is that you place insurance with an insurer, and that insurer pays you commission, a percentage. And in New Zealand, it can vary from 15 to 30%. Plus, there are kickback arrangements, profit shares, so an insurer will say, ‘Hey, I will give you – there’s all these different models out there that mean that if you put a lot of business with one particular insurance company’. You will get a lot of kickbacks and things coming, you know, coming your way back to you as a broker. And that was a model that I hadn’t really appreciated as a lawyer. And I discovered once I became a broker, and it was more about how, at the time that certainly I think the rules have changed a little bit now. But at the time, it wasn’t disclosed on your premium bill. So you would get a bill for $100,000. And you think, Oh, right. That’s the cost of my insurance. That’s really expensive. But it wasn’t broken down to say, your insurance cost $70,000. And the broker’s commission is $30,000. It wasn’t explained like that. And also, it’s not, it’s not really about the money you pay, it’s the value you get and how much value do I think I’m getting from my insurance? And from my insurance broker and the person who’s advising me around insurance? Do I feel like this is really you know, I’m really looked after I’m getting really solid advice, is that sort of commission worth it. And when you flip it on its head, and you say, we will operate on a transparent way. So we will provide our services and an hourly rate, like a lawyer would charge or fixed fee, or however it is, suddenly you the clients will think to themselves, Oh, this is so clear, I really appreciate someone showing me exactly like the cost of what your insurance is. And then what I’m paying someone to give me advice around all of this. And yeah, it’s quite a game changer. And another really important point about commission is that when you’re paid by an insurance company, to me, it seems like quite a large complex. So you come to me and say, Hey, will you give me some insurance advice, place my insurance, go to the market, get all these different terms back, but ultimately, you’re not paying, you’re paying for my services, the insurer is paying for my services. So to me conflict 101. Whereas at Frank, the company I work for, it’s completely separate. So a bill for insurance, and then we are paid separately by the client. So we act for the client or the interest the purpose.
Debra Chantry-Taylor 09:43
And so as you said, it can be a fixed fee, or it could be an hourly rate. And but as you’re not, you’re not saying that insurance broker shouldn’t be paid for the value that they add absolutely the opposite. You’re saying that actually, they should be paid based on the value that they actually add? Yeah,
Anna Parker 09:56
Yeah, definitely. Definitely.
Debra Chantry-Taylor 09:59
So tell about the kinds of insurance that business owners should be thinking of. And also, if they’re going to go to a broker, what should they have already thought of before they come to you?
Anna Parker 10:09
Yeah. So I mean, there’s a couple of aspects there that, Jen, I mean, your basic insurance policies that kind of if a startup came to me and said, Oh, I’m just getting into business, what sort of policies should I look at? You’d have to split it into two camps. You’ve got your physical assets, what’s tangible? Do you own any buildings? Do you own any stock? Do you have any office equipment? What can you physically touch and what’s tangible, and also the liability so what things could go wrong? So what’s worst case scenario where things could go wrong, that you can transfer some of that risk to an insurer. So when you think about physical assets, you have your material damage, so your insurance, the stock, the office furniture, whatever it is material damage, and then you can also have business interruption, which would provide financial assistance in the event of the material damage loss, and then also your commercial motor. And then when you go into the liability area, some of the policies would be general liability, which covers property damage and personal injury to third parties. So such as tradesmen might accidentally fracture a water pipe, causing some damage. professional indemnity is also a big one. So if you’re, if your business offers services, or advice to people, and that third party suffers a financial loss because of something you said, or some of the advice you gave, then professional indemnity policy would pay for those defense costs and any compensation to that third party. And then another one that people don’t really think about, especially in the startup stages is directors and officers insurance. And it’s also known as DNO and that’s designed to provide financial compensation to help directors and officers against allegations of mismanagement, while they carry out their duties and their day to day management of governance of the company.
Debra Chantry-Taylor 12:08
Okay, so that’s if you’re starting out what if you’re an established business? Let’s just say you have a lot of that cover? When would you consider reviewing it? How often should you review it? Why should you review it? What you do in that situation?
Anna Parker 12:19
Yeah, bare minimum is every year to review to sit back and say, How’s my business changed? Have the activities change? What am I doing? Otherwise, I would also recommend every six months really to say like, what’s going on? Is that is there insurance out there that has come onto the market or something I haven’t really considered. So cyber insurance would be a big one at the moment, a lot of people, business owners that come to me don’t really have or haven’t thought about cyber insurance. And there’s two aspects to that, which is whether you need cyber insurance, or whether you need to kind of put more risk mitigation practices into how you protect from cyber criminals and all those sorts of things. So that’s kind of twofold. But yes, it’s really looking at it and thinking, I know, like, like we talked about earlier that insurance is a grudge purchase, but paying a lot of attention to it and thinking, is this what I’m doing? Is my business done in the same in have I changed staff activities? Like what’s different about my world that someone should come and look at and also claims, like if you have an insurance claim, so to think, to kind of analyze after the insurance claim and say, Oh, what, what worked well? My insurance paid out or the insurance didn’t pay out? And what could what could have been done differently? Do I need to pay attention here? Or are there risk mitigation practices that we need to start looking at?
Debra Chantry-Taylor 13:45
Yep. And I think I think, especially in current times, and all the changes are going on around the world with COVID, kind of prompting some of them but even so, it’s changed the whole way that we would, it’s probably a good time to actually go, Am I doing the same as what I was doing 6 months, 12 months ago, or have things changed significantly? Yeah. A chance to review it. Yeah.
Anna Parker 14:03
Yeah, exactly. Exactly. And also looking at your insurance policy, the documents itself and getting the documents out. I’m not saying reading the whole policy wording. I say, grabbing the insurance schedule, and looking at it and thinking, What does that exclusion mean? So your policy schedule will also contain exclusions, endorsements, what do they actually mean? Picking up the phone will go in and having a meeting with your broker to say, I’ve seen all these things on the policy. Can you explain them? Can you put it into terms I’m going to understand, what that means? Because often, I mean, we saw quite recently, an exclusion on a policy and accountants policy or tax mitigation warranty on an accountant professional indemnity, liability policy. This had the effect of excluding all cover under the policy for tax related advice. That’s exactly what accountants do. Their professional indemnity policy had all the cover stripped out of it. And the accountants truly had no idea that this exclusion sat on their policy. We rectify that and sorted out, but they just hadn’t paid attention to those to what those exclusions actually meant.
Debra Chantry-Taylor 15:26
And I think and I’m gonna say this, because I used to work in insurance myself, as you know, and I think there is an element of insurance companies do make it difficult for you to fully understand the way the way the policies are worded. And that’s not the that’s just the way that they operate. I get that. But I think that it’s important, as you said, to pay attention, if you don’t understand it, at least have somebody else, go through it with you and explain it to you to make sure you actually understand what you’re covered for because the worst time is at claim time when it’s too late. Right. So, so let’s talk about some of the common mistakes that you’ve seen made with people in insurance.
Anna Parker 16:01
Yeah, I mean, look, it really is the business activities. So, to look at your schedule, and it could be called business description and business activities. Let’s talk about a builder again. So that builder might do a bit of building work, some roofing some drainage, alongside all of their standard building work, but the insurance policy might just say, building construction – building work, it won’t actually specifically list out roofing and drainage work. If that’s not on the schedule, that’s not listed out as a business activity, then the insurance are unlikely to help out if a claim came in from a homeowner, for example, about the roofing work that the builder did. So that’s a that’s a common error. And people don’t really pay attention to that. So that’s something I would definitely look out for.
Debra Chantry-Taylor 16:57
And what about so I work with a lot of professional services and family businesses. Now they are a mixture of product and service professionals. But just in terms of Is there anything specific that you should be thinking of, particularly when it’s a family business? And you’ve got a whole bunch of the family involved in the business? Is there anything specific they should be looking at in terms of insurance?
Anna Parker 17:17
I mean, making sure that the suite and the structure set up. I think, I think it’s kind of hard to, to know until often clients will come to me and say, ‘Here’s my current insurance world, here’s why have will you go through everything’, and we’ll go through all the fine tooth comb and check over everything. And when you kind of look at the whole picture together. That’s important and get a second opinion. I mean, people will often say that about doctors, or lawyers, even so if you go near a doctor or a lawyer, and you’re not happy with the advice you’re getting, you’re happily go to get a second opinion. I would say the same about your broker, if you think, Oh, am I getting the right advice? Is someone put a lot of care and attention into my insurance. Get a second opinion, definitely get someone else to review it. And make sure that the structure and you’ve transferred all of your risk, and you’ve got the right policies, and are you over insured? Are you under insured? Like you know, because people will spend a lot of money on insurance. But is this the right insurance for your business? Is this what you need?
Debra Chantry-Taylor 18:27
Yeah. And what do you think makes a good broker? There’s lots of brokers out there, and I’m sure some really great ones out there, in your opinion, makes a good broker. What should I be looking for? If I’m looking for, to change, for example?
Anna Parker 18:37
Yeah, definitely knowledge and experience in the industry. And one, a really persistent broker, someone who isn’t going to just say, ‘Oh, that’s a really hard risk. I can’t find you insurance for that.’ So that’s happened quite a few times. A recent example was there was a startup company who came to us and they were importing restricted veterinary medicine. And they were trying to get a contract with New Zealand’s largest leading poultry producer. It really was the opportunity of a lifetime for this startup company to have a contract with such a large corporate, it was a big deal for them. They couldn’t get insurance because no underwriters wanted to offer terms because they deemed this risk was too significant for the small startup when dealing with a large corporate. And as a result, they came to us because the company was about to go out of business because they couldn’t sign this contract, and they couldn’t get insurance. And the ones that were gonna offer insurance, we’re going to put what’s called a total product efficacy exclusion on the policy. I’m not going to go to insurance Geek on you. I’m not going to delve into that but just like it was a bad insurance policy. So insurance have the insurance who out there will say, ‘I will give you this insurance.’ But for what you actually need it for, I’m going to strip away a lot of the cover, like we’ve talked about earlier. So it was a matter of a lot of other brokers have said to this client, we can’t get your terms, we’re not going to help you kind of on your own. Actually, how can you work with that client to change their risk profile? Are there ways of putting them in touch with lawyers, for example, to get the right compliance documents, their risk profile, looking better? So we’ve worked alongside that? So it wasn’t a case of hearing? No, from all the market? It was actually how can you repurpose rejigged that risk to make it look better to the underwriters. So we worked with them. And I mean, that was an incredible result for this business, who had been told no, to suddenly be able to sign that contract their businesses, instance flourished. And it’s extraordinary to witness. So I think, if you were a business owner out there, and you heard a broker say, ‘No, that’s a really difficult risk. No, I can’t find options’, well then ask around and actually say, either, you know, to your broker, ‘Please, can you make sure you go to all the markets, global, local, or just see who else is out there who’s got a bit more persistence’
Debra Chantry-Taylor 21:18
I’m sure, I suppose that also comes at the other end of the thing when it’s claimed time as well, right? You want somebody to go in and fight for you.
Anna Parker 21:25
So important, you really want a broker who is going to hold your hand and be your advocate for you and really understand the nuances of the policy and how the policy is triggered when a claim comes in and what needs to happen. And working alongside not only lawyers, loss adjusters, helping you collect evidence, if necessary, working through the story in the scenario and helping you with a chronology, just really someone who’s working alongside you for all of that claims time is such a critical and important moment for someone, you really, really need an advocate alongside you in that moment.
Debra Chantry-Taylor 22:04
And you’re probably going to hate me for saying this. But I’m just thinking back to our original conversation about you know, when brokers are paid commission by the companies, that’s part of the conflict, isn’t it? Because when it comes to claims time, there must be something in there that if they are who do they who do they actually work for, I suppose is a question I would ask not going to ask you to answer that. But that’s what’s going through my mind is actually, if they’re being paid these big commissions by the insurance companies, are they going to fight for your really small claim when they’ve got this great big book full of insurance with the people who pay them? Yeah, yeah. What’s any other sort of common mistakes that we should look out for in terms of, you know, when you’re working through your insurance policies?
Anna Parker 22:46
The limits of indemnity. So that could be $1,000,000, 2 million dollars, 5 million. So often, clients will be asked to enter into a contract. And that contract will say we require you to hold a million dollars of general liability. And so they will look at the contract and either just think to themselves, actually, I hadn’t I had one the other day, where someone had asked this very small company to hold $50 million. It was such an outrageous sum for such a small job. And I think the fee was very high for this client, and what they said. And they called me up and said, you know, can you help me find $50 million of professional indemnity insurance? And I said, well, first of all, what’s this contract? What’s the contract value? And have you tried to push back on this? Have you said that isn’t outrageously high amount that will cost way more the entire cost of the project? Or what you want me to do? Where can we go with that? And they hadn’t even cross their mind that they could push back on a contract and what’s in a contract? So common mistakes are looking at what the contract says, and can you push back on it? And also, did you need a lawyer’s advice on this? Like, are you just signing a contract? Because you think, oh, some massive companies giving you a contract? I should sign it because I want the work and I want the business? Or actually, should you just spend a little bit of money to get it reviewed by a lawyer who will talk you through a lot of these issues?
Debra Chantry-Taylor 24:27
Yeah, that’s perfect sense. Yeah. It is interesting, because I think often that happens, particularly with the sort of small medium sized businesses working with large corporates, they come with kind of a standard contract, but that does not mean that it’s set in stone. That is almost like that’s the starting point for negotiation, right? Yeah, perfect. Okay. Well, we’re coming to the end of the pocket is amazing how time flies even on talking about insurance, can you believe so a couple of things that I’d like to ask about I always ask guests to talk about your top three tips that they will actually share. And for you I’d love a little bit of both because obviously you Running your setup and running that the Auckland bunch of very successful business, but also your insurance broker. So what are your top three tips from a personal perspective from a business perspective?
Anna Parker 25:08
So definitely goes back to the what we talked about earlier, which was really pay attention to your insurance policy. Even if it’s just a bit boring, just please just get those documents out, cast your eye over the schedules, look at it and think does that reflect what I want? Are the limits what I actually want? Do I have the insurance I need for the risks that my business has, and other business activities adequately explained in the schedule to really get those documents out and have a look through and work alongside your broker and ask questions be curious about insurance? What does this exclusion mean? Am I covered as this scenario happened, work through your worst-case scenario and think, if this happened to me, am I covered? Have I transferred my risk appropriately to an insurance company and work with your broker alongside that. The next one would be in all aspects of life, I would say be really persistent. And don’t give up. I mean, I’ll hear a no. And I might think to myself, Oh, not yet. Next year. Yeah, be persistent.
Debra Chantry-Taylor 26:19
Yeah, that’s what the button that I was actually at a presentation last night of Bill James. And he was saying, you know, as kiwis, we tend to very much take one note as meaning no. And he said, You should at least get the second note before you to kind of give up because the first note is just some brush off. It’s easy. So you ask the question. So why do you feel that way? And what can I you know, I can do to change your mind. It’s only when you get the second now that you can go okay, maybe I should be about that.
Anna Parker 26:42
Exactly. And that leads into be curious. So be curious about where has that no come from? Are there ways that you could improve? Often, I will say to other people around me that a client or someone you want to work with will say, Oh, no, no, I’m not interested. And they’ll just say, Oh, no worries, like, speak to you next year or something. Whereas actually, you want to know why, like, what are the hurdles that stand in the way of us working together? What are those reasons? So I always want to push a bit further and say, Can you explain why that is? Or what stands in the way of us working together on what are those reasons? Or what can I work on? Or what can we all work on? And things like that? How can you improve processes, systems, service – all of those sorts of questions, I’d be really curious and want to know, reasons why someone says what they say. And then the another one would be, be bold, just walk into the room and know your worth, know your value. Be confident.
Debra Chantry-Taylor 27:51
Yeah. And that goes on both sides, right? It’s like, at the end of the day, we’re working together. So let’s embrace it appreciate the value that each brings to the relationship and work together for the better.
Anna Parker 28:01
Yeah, how could it be a win for you? And a win for me?
Debra Chantry-Taylor 28:04
Yep. Yeah. Love it.
Anna Parker 28:05
How can we how can we both be happy in this scenario? Yeah. Hey,
Debra Chantry-Taylor 28:09
look, as I said, unfortunately, I’m running out of time, but I guess if people want to talk to you, I’m sure they get huge value out of talking to you. How would they actually get ahold of you? What’s the best way to do that? And do you, for new clients? How does that work?
Anna Parker 28:23
Yeah, so you can go to I think you’ve got a link to my bio, and it has on our website, and it has all the contact details, and you can reach out to me, I’m also on LinkedIn, so you can send me a message there. All my contact details should be easily found on LinkedIn or on our website. And new businesses. Just reach out. We have an initial discovery meeting where I learn more about you and I learn more about your business and what’s the right insurance out there for you. And we work through all of this.
Debra Chantry-Taylor 28:50
Yeah, fantastic. I can see you’re really passionate about what you do. I guess there’s no chance you going back to being a lawyer? Hey Anna, look, thank you so much for making the time this morning. I know that you’ve kind of got your daughter off to school and come in and got ready for this podcast. So thank you so much. Really appreciate your time. Look forward to talking again soon. Thank you. Thanks.
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