Commercial Rent Default Insurance
Product Disclosure Statement and Policy Wording
Greenhill
Underwriting
Agencies
62 Greenhill Road Wayville SA 5034
PO Box 1229 Unley SA 5061
rent@greenhillunderwriting.com.au
ABN 35 194 842 340
AFSL No. 234526
greenhillunderwriting.com.au
This Product Disclosure Statement (PDS) was prepared on 25 March 2015 and tells you about
our Commercial Rent Default Insurance. Any advice provided is general only and does not
take into account your individual circumstances. You should carefully read this document and
any other documentation we send you and keep them in a safe place for future reference.
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Contents
The Insurer....................................................................................................................................... 4
About Greenhill Underwriting Agencies .......................................................................................... 4
Important information....................................................................................................................... 4
Important documents ................................................................................................................... 4
Your cooling off rights .................................................................................................................. 5
Cancelling your insurance ........................................................................................................... 5
Renewing your insurance ................................................................................................................ 5
Policy conditions and your responsibilities ................................................................................... 5
Information you need to tell us .................................................................................................... 5
Understand your Duty of Disclosure .......................................................................................... 6
Ensure your premiums are always paid ..................................................................................... 6
Words with special meaning ........................................................................................................... 6
What we cover ................................................................................................................................. 7
Limits ............................................................................................................................................ 8
What we do not cover...................................................................................................................... 9
Additional benefits ........................................................................................................................... 9
Legal Expenses ........................................................................................................................... 9
Claims preparation expenses.................................................................................................... 10
Special conditions applicable to this policy ................................................................................... 10
Claims ............................................................................................................................................ 10
How we settle claims ................................................................................................................. 10
What you must do after a loss ................................................................................................... 10
Providing proof of your loss ....................................................................................................... 10
Other important matters ................................................................................................................ 11
GST ............................................................................................................................................ 11
How we protect your privacy .................................................................................................... 11
Determining your premium ........................................................................................................ 12
Financial Claims Scheme .......................................................................................................... 12
The Dispute Resolution Process ............................................................................................... 12
General Insurance Code of Practice ......................................................................................... 14
Updating our PDS ..................................................................................................................... 14
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The Insurer
The insurer of this product is The Hollard Insurance Company Pty Ltd (Hollard), ABN 78 090
584 473, AFSL 241436. Hollard’s contact details are:
Phone
02 9253 6600
Mail
Locked Bag 2010, St Leonards NSW 1590
About Greenhill Underwriting Agencies
Greenhill Underwriting Agencies Pty Ltd (Greenhill) ABN 35 165 918 730 acts as an Authorised
Representative of Hollard.
Greenhill is authorised to deal in and issue this Commercial Rent Default Insurance and
administer the issue of policies and handling of claims on behalf of the insurer. Greenhill act as
agents for the insurer Hollard, not for you, and if any advice is provided, it will be general advice
only and will not take into account your individual circumstances or financial needs. Greenhill’s
contact details are:
Phone
08 8273 0900
Address
62 Greenhill Road, Wayville SA 5034
Post
PO Box 1229 Unley SA 5061
Important information
Important documents
Your insurance policy documentation consists of:
1. this Product Disclosure Statement (PDS) which sets out details of what is and what is
not covered by this policy;
2. the Insurance Certificate we provide with details of:
- who is insured;
-
the cover(s) selected;
- the period of insurance;
-
the respective sums insured and/or limits of liability;
- excesses and other important information.
You should ensure that you read these documents carefully and keep them in a safe place.
If you have any questions regarding the policy or Insurance Certificate, please contact your
insurance broker.
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Your cooling off rights
You can return your policy to us within 14 days of the commencement or renewal of your cover.
If we receive your written request to cancel this policy within this 14 day period, we will cancel
the policy effective from the commencement date, and give you a full refund (less any taxes or
duties payable that we are unable to have refunded). You cannot use this right where, before
the 14 day period ends, you have exercised any of your rights or powers under the policy (e.g.
you have made a claim). After the cooling off period ends you still have cancellation rights
under the policy.
Cancelling your insurance
You can cancel your insurance at any time by letting us know in writing. We will refund any
unused portion of your paid premium less any commissions, taxes and charges that we are
unable to recover. Your insurance broker will usually retain the commission on the policy. We
can cancel your insurance to the extent permitted by law, for example if you do not comply with
the policy terms and conditions, if you fail to pay your premium, if you make a fraudulent claim
or if you did not comply with your duty of disclosure or misrepresented information when you
entered into this insurance contract. If we cancel your policy, we will send you a cancellation
letter.
Renewing your insurance
At least 14 days before your insurance expires we will advise you whether we intend to renew
your insurance or not, and if so, on what terms. You are not obliged to renew your insurance
with us.
Your cooling off period continues to apply on each renewal. Each renewal is a separate
contract and not an extension of the prior contract.
Policy conditions and your responsibilities
You must abide by the conditions of this policy such as the conditions detailed below and the
conditions applicable to the making of a claim. If you do not, your policy may not operate and
we may reduce or refuse to pay a claim and cancel your policy.
Information you need to tell us
At the time you apply for this insurance and on each renewal, you must tell us:
1. the annual rent payable by each and every tenant;
2. the occupation of each and every tenant; and
3. the name and contact details of your property manager.
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Understand your Duty of Disclosure
We rely on the information you provide us with, to decide whether to insure you and the terms
on which we will insure you. To comply with your duty of disclosure when first entering into an
insurance contract with us, you must tell us everything you know and that a reasonable person
in the circumstances could be expected to tell us, in answer to the questions we ask you. This
applies to every person insured under the policy.
If you fail in your duty of disclosure, we may reduce or deny any claim you make or cancel your
policy. If you fraudulently keep information from us or deliberately make false statements, we
may avoid your contract and treat your insurance as if it never existed.
To comply with your duty of disclosure when you vary, renew, extend, reinstate or replace your
policy, you must tell us everything that you know, and which a reasonable person in the
circumstances could be expected to know, is relevant to our decision whether to insure you
and, if so, on what terms. You do not have to tell us anything that is common knowledge that
we should know through our business, that reduces the risk of a claim or that we tell you we do
not need to know.
Ensure your premiums are always paid
You are responsible for ensuring that your premiums are paid and kept up to date or your cover
could be put at risk.
Words with special meaning
allowable re-letting expenses means the expenses you incur, such as cleaning, rubbish
removal, changing of locks, letting fees or advertising costs, in order to secure a new tenant.
lease agreement means the agreement between you or your property manager and the
tenant detailing the terms and conditions of the lease of the rental property. The lease
agreement must be in writing and state the:
1. term of the lease period;
2. rental amount payable;
3. the cash bond received or details of any bank guarantee if applicable.
lease agreement does not include a periodic tenancy agreement.
periodic tenancy agreement means any agreement that applies when a tenant continues to
occupy the rental property after a fixed-term agreement has expired.
premises means the property including all fixtures listed in the inventory as part of the lease for
use by the tenant at the situation shown in the Insurance Certificate.
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property manager means the licensed real estate agent or licensed property manager acting on
your behalf and shown in the Insurance Certificate as the ‘Managing Agent’.
rent means the amount of money paid, or payable, by the tenant to lease your rental property.
The amount is stated in, or determined under, the lease agreement.
rent default means a tenant has:
1. failed to pay the agreed rent and is in breach of the lease agreement; or
2. left the premises without having provided the amount of notice required under the lease
agreement.
rental property means the building and/or land which is the subject of the lease at the location
shown in the Insurance Certificate.
tenant means the person(s), company or other entity named in the lease agreement.
weekly rent means the amount of rent payable on a weekly basis. If the amount of rent is not
fixed, it means the total rent payable by the tenant during the period of rent default divided by
the number of weeks in the period.
we, us or our means Greenhill Underwriting Agencies Pty Ltd ABN 35 165 918 730, acting as
an Authorised Representative of The Hollard Insurance Company Pty Ltd (ABN 78 090 584
473) (AFSL 241436).
What we cover
We will cover you for loss of rent arising out of rent default occurring during the period of
insurance if your tenant:
1. leaves your rental property before the end of the tenancy period of your lease
agreement, without giving you or your property manager notice;
2. stops paying rent and is legally evicted from your rental property;
3. stops paying rent owed to you or your property manager; or
4. leaves your rental property at the end of the lease without having paid all rent due.
We will cover rent default that occurs during the period of insurance and any continuous rent
default until either the policy limits are reached or until all rent due is paid.
We will only pay a claim for rent default if:
1. the tenant breaches your lease agreement; and
2. any bond collected or bank guarantee held as security has been completely
exhausted; and
3. you have taken all reasonable steps legally available to you under the relevant State or
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Territory legislation relating to commercial leases, to remedy non-payment of rent and
evict the tenant.
Cover for loss of rent default will stop immediately once:
1. your rental property is re-tenanted;
2. your rental property is not available to be tenanted because of renovations or
maintenance work being carried out; or
3. the term of the lease agreement ends.
Limits
The most we will pay during any one period of insurance for loss of rent arising from rent default
is 26 weeks rent with a 4 week excess for each and every instance of rent default. The
percentage of the weekly rent we will pay will vary depending on the number of years the tenant
has been operating their business.
There is no cover provided where your tenant has been operating their business in its current
form or occupation for less than 1 year.
The amounts payable are shown in the following tables.
Where the tenant has been operating their business for more than 1 year but less than 3
consecutive years, at the current location or any other, the following limits apply:
Period of rent default
Cover
Weeks 1 to 4
No amount payable
Weeks 5 to 26
85% of the weekly rent multiplied by the number of weeks in
default, less any bond or bank guarantee that has not yet been
exhausted.
Weeks 27 and beyond
No amount payable
Where the tenant has been operating their business for more than 3 consecutive years, at the
current location or any other, the following limits apply:
Period of rent default
Cover
Weeks 1 to 4
No amount payable
Weeks 5 to 26
100% of the weekly rent multiplied by the number of weeks in
default, less any bond or bank guarantee that has not yet been
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exhausted.
Weeks 27 and beyond
No amount payable
If your tenant has supplied a bond or bank guarantee as security for the rental of your property,
this must be fully exhausted before any claim is payable under this policy.
What we do not cover
We will not pay a claim for loss of rent arising from rent default if:
1. your tenant has carried on their business in its current form or occupation for less
than 12 months;
2. the rent is in arrears when this cover is first taken out. This cover will not commence
until all rent arrears have been paid and the tenant has paid a minimum of 4
consecutive weeks of the agreed rent in accordance with the lease agreement;
3. there is not a valid lease agreement in place at the time of the rent default;
4. the premises were not under the management of a property manager at the time of
the rent default;
5. the tenant is not in breach of the lease agreement;
6. you have failed to take all action legally available to you to remedy the non-payment
of rent including terminating the lease agreement and evicting the tenant;
7. the premises are not immediately available to be re-tenanted due to renovations or
maintenance being carried out;
8. the tenant has not conducted the occupation and/or activities as described in the
lease agreement;
9. you have failed to comply with your responsibilities under the lease agreement;
10. we have already paid or agreed to pay 2 claims in any one policy period.
We will not pay more than you would be legally entitled to recover from the tenant due to noncompliance with the lease agreement (other than the Additional benefits outlined below).
Additional benefits
Legal Expenses
If we accept a claim for rent default we will, with our prior agreement, also pay your legal
expenses up to a maximum of $5,000 for each claim. The cover for legal expenses is restricted
to costs incurred to reduce a claim for rent default.
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Claims preparation expenses
If we have accepted a claim for rent default, we will also pay up to $5,000 for costs necessarily
and reasonably incurred by you for the preparation of a claim by your accountant or financial
advisor. You must obtain our written approval before you incur these claims preparation costs.
Special conditions applicable to this policy
You must advise us within 30 days if:
1. if you transfer the management of your premises from one property manager to
another; or
2. if there is any change in the tenancies or usage of your premises.
If at the time of rent default your premises are not being managed by a property manager, no
cover is provided under this policy.
Claims
How we settle claims
The weekly rent will be established using the lesser of:
1. the weekly rent of the tenant in accordance with their lease agreement; or
2. the weekly rent sum insured applicable to the defaulting tenant as shown on your
Insurance Certificate.
The amount payable for rent default will be as per the ‘Limits’ section of this policy, then
reduced by:
1. any bond or bank guarantee held as security that has not been exhausted; and
2. any other excess shown on your Insurance Certificate.
What you must do after a loss
1. take all reasonable steps to prevent further loss;
2. advise us of the claim and submit a claim form as soon as possible;
3. provide us with the proof we require to establish the extent of the loss.
Providing proof of your loss
Documents we may ask for include but are not limited to:
1. a copy of the current lease agreement(s);
2. a copy of the tenant’s rental payment history;
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3. copies of any correspondence or notices issued to the defaulting tenant;
4. copies of advertisements seeking new tenants;
5. invoices detailing the costs of re-letting expenses;
6. copies of entry, exit and routine property inspections reports together with photographs;
7. any court issued document, letter, claim, writ or summons in relation to your claim as
soon as possible after you receive it.
Other important matters
GST
If you are not entitled to an input tax credit on any part of the premium you paid for this policy,
the sums insured, sub limits or limits of liability stated in this policy are inclusive of GST.
If you are entitled to an input tax credit on any part of the premium you paid for this policy, the
sums insured, sub limits or limits of liability stated in the policy are exclusive of GST to the
extent of your input tax credit entitlement.
In situations where we make a cash payment to you for the purchase of goods or services for
which you are entitled to claim an input tax credit, we will only pay you an amount that is equal
to your net cost i.e. your cost after claiming input tax credits.
The policy does not cover any amount of GST, or any fine, penalty or charge that you are liable
for because of a failure to disclose or a misstatement made by you, in relation to your
entitlement to an input tax credit for the premium. You must tell us if you become aware that the
extent of your entitlement to an input tax credit for your premium disclosed to us is incorrect.
How we protect your privacy
We are bound by the Australian Privacy Principles (APP) under the Privacy Act 1988 (Cth) and
comply with the Privacy Act 1988 (Cth). We are committed to ensuring that all our business
dealings comply with the APP and acknowledge the importance of keeping personal details for
individuals confidential and secure.
We collect personal information for the purpose of providing insurance, including arranging
insurance, policy administration and claims handling. Without this information, we are not able
to provide you with the services you require.
If you would like a copy of our privacy policy, would like to seek access to or correct your
personal information, or opt out of receiving materials we send, please contact us. Our detailed
privacy policy can be viewed on www.hollard.com.au or a copy can be obtained by phoning 02
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9253 6600.
Determining your premium
When you purchase your insurance we will tell you the premium you must pay, which is
determined by considering factors such as the cover you want, the tenants of your property, the
applicable limits and excesses and your insurance history. It also includes any compulsory
government charges, taxes or levies (such as Stamp Duty and GST) that we are obliged to pay
for your insurance. Your premium, including these charges, will be noted on your Insurance
Certificate.
Financial Claims Scheme
Hollard is an insurance company authorised under the Insurance Act 1973 (Insurance Act) to
carry on general insurance business in Australia by the Australian Prudential Regulation
Authority (APRA) and is subject to the prudential requirements of the Insurance Act. The
Insurance Act contains prudential standards and practices designed to ensure that, under all
reasonable circumstances, financial promises made by Hollard are met within a stable, efficient
and competitive financial system.
The protection provided under the Financial Claims Scheme legislation applies in relation to
Hollard and the policy. If Hollard were to fail and were unable to meet their obligations under the
policy, a person entitled to claim under the policy may be entitled to payment under the
Financial Claims Scheme (access to the Scheme is subject to eligibility criteria). Information
about the Financial Claims Scheme can be obtained from the APRA website at
www.apra.gov.au or the APRA hotline on 1300 55 88 49.
Hollard is exempted from the requirement to meet the compensation arrangements Australian
financial services licensees must have in place to compensate retail clients for loss or damage
suffered because of breaches by the licensee or its representatives of Chapter 7 of the
Corporations Act. Hollard has compensation arrangements in place that are in accordance with
the Insurance Act.
The Dispute Resolution Process
We welcome every opportunity to resolve any concerns you may have with our products or
service. In the first instance contact your insurance broker.
If your concern is still not resolved to your satisfaction please write to our Internal Dispute
Resolution Committee at:
The Hollard Insurance Company Pty Ltd
Internal Dispute Resolution Committee
Locked Bag 2010, St Leonards NSW 1590
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or email resolution@hollard.com.au or call 02 9253 6600.
Your concern will be investigated by an officer with full authority to deal with the complaint and
you will be informed of the outcome within fifteen working days of receiving your concern. If
your concern still remains unresolved to your satisfaction or has not been resolved within 45
days, you may refer the matter to the Financial Ombudsman Service (FOS) subject to its terms
of reference, which acts as our external dispute resolution provider. FOS is an independent
body and its service is free to you. FOS can be contacted via:
Post
GPO Box 3, Melbourne, Victoria 3001
Web
www.fos.org.au
Email
info@fos.org.au
Phone
1300 78 08 08
A decision of FOS is binding on us (up to specified jurisdiction limits). A decision of FOS is not
binding on you and you have the right to seek further legal assistance.
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General Insurance Code of Practice
Hollard is a signatory to the General Insurance Code of Practice. The objectives of this Code
are to:
•
commit us to high standards of service;
•
promote better, more informed relations between us and you;
•
maintain and promote trust and confidence in the general insurance industry;
•
provide fair and effective mechanisms for the resolution of complaints and disputes
between us and you; and
•
promote continuous improvement of the general insurance industry through education
and training.
You can obtain a copy of the Code from the Insurance Council of Australia website
www.insurancecouncil.com.au or by phoning (02) 9253 5100.
Updating our PDS
We may need to update this PDS from time to time if certain changes occur, where required
and permitted by law. We will issue you with a new PDS or a Supplementary PDS or other
compliant document to update the relevant information except in limited cases. Where the
information is not something that would be materially adverse from the point of view of a
reasonable person considering whether to buy this insurance, we may issue you with notice of
this information in other forms or keep an internal record of such changes (you can get a paper
copy free of charge by calling us).
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