insurance presentation specifically tailored for: australian pack send franchises

Insurance Presentation

Specifically Tailored for:

Australian Pack Send Franchises

About Sear Insurance Brokers

Sear Insurance Brokers commenced transacting insurance business in 1975. Our company has exceptional experience and superior knowledge of the insurance sector Australia wide. We specialise in the analysis, placement and management of commercial insurance programs and individual insurance products for business clients. We also provide a wide range of retail products and services for a range of different clients.

As brokers, we act on behalf of clients and represent our clients interests when placing cover, throughout the policy lifecycle and in the event of claims.

The Pack & Send Insurance Facility is exclusively available to participating Australian and New Zealand Franchisees, and has evolved over the past 11 years to specifically suit a Pack Send Franchisee. The Facility is designed to provide Pack Send Franchisees with security against loss, damage and liabilities associated with their business activities world wide. In close alignment with Pack Send head office, this specific insurance program has been tailored to match the risks that Pack Send franchisees are exposed to on a daily basis.

Within this presentation you will find information about the following covers that are available:

* Business Package* Personal Accident & Illness* Marine Transit (Australia Wide)* Marine Cargo (International)* Freight Forwarders Liability

These covers are highly recommended for a Pack Send Franchise, and have been tailor made to suit. This is not an off the shelf cover you are able to buy from another insurer. The cover we offer has been a work in progress for over 10 years, and is possibly the broadest cover available in the freight industry.

Before Signing The Lease, Store Fit Out and Opening:

Please Contact Sear Insurance Brokers For Full Consultation & Induction

We Will Provide Comprehensive Information About All General, Specificand Statutory Insurance Requirements and arrange all necessary cover in accordance with your instructions.

Pack Send – New Business Presentation 2010

CONTENTS

What can go wrong?

Risks you will be exposed to 4

Business Insurance Facility - Cover Summary

Property Loss & Damage 5

Business Interruption 6

Burglary 7

Money 8

Plate Glass 9

Broadform Liability 10

Portable Property 11

Personal Accident & Illness 12

Optional Coverage 13

Basic Risk Management 14

Marine Insurance Facility - Cover Summary

Cover And Trading Preamble 15

Cover Limits and Sums Insured 16

Premium Calculations for all Marine Policies 17

Gold Service Warranty 18

Significance of Gold Warranty to a Franchisee 19

Important Trade Practices/Fair Trading Laws 20

Online System for consignments over $25,000 21 & 22

Cover Exclusions 23

Consignment Notes and Conditions of Contract 24

Risk Management and Special Considerations 25

Low Claim Bonus Information 26

Memorandum Of Agreement 27

Marine Claims Procedure 28 & 29

Consignment Note Terms And Conditions 30Pack Send – New Business Presentation 2010

Somewhere in your Pack Send life, you may ask yourself why you need the insurances you pay for, and again why has there been such an emphasis on ensuring the cover is as broad as it is?

Naturally, you may have periods of time where you may not require your insurances, or need to claim for some time, but for those once off occasions where you need to fall back on the cover, you will be glad you arranged it.

Being involved with Pack Send for over 10 years now, we are confident we have seen almost everything that could go wrong, actually go wrong. That’s why over the last 10 years, Andrew Sear has been working exceptionally hard to continually improve and broaden our program. Extraordinary effort has been put in to ensuring our cover is broad enough to cover risks that a Pack Send Franchise will be exposed to, whilst going about their business. We are confident we have anticipated just about everything that can go wrong.

In the freight industry, it is well known that there are many risks and factors that need to be taken into account. Not only are you responsible for sending other peoples personal belongings, but being part of Pack Send, you are expected to Pack an item in such a way, that it gets to the other end the way it left your store.

Luckily enough, we have already had over 10 years to consider the risks and disasters that may occur, and have set up a specific tailor made set of policies that have yet to fail in the decade we have shared with Pack Send.

Risks you will be exposed to

4Pack Send – New Business Presentation 2010

Business Insurance Facility - Cover Summary 2010

PROPERTY LOSS OR DAMAGE

Material Loss / Damage: Contents Of Every Description, Stock & Customers Goods $ 150,000

Removal Of Debris $ 10,000

Total $ 160,000

Covers: Physical Loss Destruction Of Or Damage To The Property Insured As

A Result Of An Insured Peril.

Basis Of Settlement: Replacement / Reinstatement

Additional Benefits: Accidental Damage $ 250,000 Flood – Set Sum Insured Up To $ 50,000

Capital Additions – Limited to 20% Of Sum Insured of $ 500,000

Alterations & Additions – Limit to 20% of Sum Insured or $ 200,000 Personal Effects Of Directors / Employees $ 20,000 Fire Brigade Costs $ 50,000 Removal Of Debris $ 50,000 Temporary Protection & Security Guards $ 25,000 Temporary Removal – Up to 90 days - 20% of Sum Insured Property In Open Air $ 10,000

Prevention Of Imminent Damage $ 50,000

Seasonal Increase In Stock (or 50%) $ 75,000

Landscaping – 20% of Sum Insured or $ 50,000

Limited Transit – 20% Of Sum Insured or $ 50,000

Loss of Land Value $ 100,000

Re-Writing Of Records $ 50,000

Architect & Consultants Fees & Costs $ 10,000

Major Perils Covered: Fire Explosion Lightning Or Thunderbolt Earthquake

Impact Malicious Damage Storm &/Or Tempest Water Or Other Liquid Leakage Rainwater, Run Off, Sprinkler Discharge

Excess / Deductible: Standard Excess $ 250



BUSINESS INTERRUPTION

Consequential Loss: Loss Of Gross Profit (Including Payroll) $ 100,000

Increased Cost Of Working $ 50,000

Professional Fees $ 20,000

Payroll Included

Total $ 170,000

Covers: Loss Which Arises From The Interruption Of The Business As A Direct Consequence Of Damage To The Insured Property

Covered Within Fire, Burglary Sections.

Basis Of Settlement: Annual Gross Profit BasisTurnover Less The Cost Of Goods Sold

Indemnity Period: 12 Months

Additional Benefits: Customers & Suppliers Premises $ 100,000

Public Utilities $ 100,000

Computer Installations – Limit 10% Of Sum InsuredPrevention Of Access - 50 kilometresStorage Sites & Temporary Removal - 10% Of Sum Insured Explosion Of Pressure VesselsInfectious DiseaseClaims Preparation Costs

Transit – 10% of Sum Insured Documents – 20% of Sum Insured

Excess / Deductible: Standard Excess $250 / 48 Hours



BURGLARY

Burglary: Contents, Stock And Customers GoodsOf Every Description $ 30,000

Alarm Warranty: Burglary Coverage Is Limited To $20,000 Until AMonitored Back To Base Alarm Is Installed AndOperational At All Times That The Premises AreLeft Unattended. When A Monitored Alarm Is NotInstalled At The Premises An Excess Of $750Applies To Each Burglary Claim.

Covers: Loss Or Damage To Insured Property DirectlyCaused By Theft Consequent Upon Actual ForcibleEntry To The Insured Premises Or Armed Hold UpIncluding Threat Of Violence Or By A PersonFeloniously Concealed On The Premises.

Basis Of Settlement: Replacement Value At The Time And Place Of Loss

Additional Benefits: Personal Property Of Directors & Employee $ 20,000 Theft Without Forcible Entry $ 20,000 Theft In The Open Air $ 5,000 Theft of Permanently Fixed (Non Portable) Apparatus $ 10,000

Employee Dishonesty $ 10,000Keys, Locks & Combinations $ 10,000Safes & Strongrooms $ 7,500Temporary Protection & Security Guards $ 25,000Temporary Removal $ 30,000Damage To Tenanted Premises $ 10,000Re-writing Of Records $ 10,000

Death Following Assault $ 10,000 Seasonal Increase - 50% Of Sum Insured




MONEY

Money: On Premises During Business Hours $ 2,500

On Premises After Business Hours $ 500

Transit To & From Bank $ 2,500

Personal Custody / At Private Residence $ 2,500

Safes & Strong rooms (24 Hour) $ 2,500

Covers: Current Coins, Bank Notes, Currency Notes, Cheques, Credit card Vouchers, Money Orders, Postal Orders, Unused Postage and Revenue Stamps, Telephone Cards, Transport Tickets, Lottery Tickets, Negotiable Securities, Notes and Instruments Belonging To You Of For The Custody Of Which You Are Legally Liable.

Additional Benefits: Property Of Directors & Employees $ 1,000

Employee Dishonesty $ 5,000

Damage To Safes & Strongrooms $ 7,500

Temporary Protection & Watchmen $ 10,000

Locks, keys & Combinations $ 10,000

Seasonal Increase 50%

Death Following Assault $ 10,000




PLATE GLASS

Glass: Internal Glass $ Replacement

External Glass $ Replacement

External Signs $ 10,000

Covers: Accidental Breakage of Glass

Basis of Settlement: Replacement

Additional Benefits: Temporary Shuttering

Burglar Alarm Tapes

Sign Writing / Ornamentation

Reflective material

Door & Window Frames

Overtime / Express Delivery

Total Benefit $ 10,000

Stock Breakage $ 15,000




BROADFORM LIABILITY

Liability: Public Liability $10,000,000

Products Liability $10,000,000

Care, Custody, Control $ 250,000

Covers: Amounts you become legally Liable to pay as compensation for Personal Injury and or Property Damage during theperiod of Insurance as a result of an occurrence happening inconnection with the Business and or products sold or supplied.

Additional Benefits: Care, Custody & Control Of Property $ 250,000

Cross Liability

Principals Indemnity

Hoists, Cranes & Unregistered Vehicles

Legal Costs

Charges & Expenses Recoverable

First Aid Expenses

Major Exclusions: Employee LiabilitiesAircraft / WatercraftAsbestosContractual Liability (Other than those implied at law)Design Defect, Faulty Work, Product DefectProduct RecallBreach Of Professional DutyKnown DefectsHold Harmless AgreementsLibel & Slander (Other than accidental utterance)Property In Physical & Legal Control (Insured By Marine)Loss Of UseRegistered VehiclesPollution

Deductible: Standard Excess $ 500



PORTABLE PROPERTY

Portable Property: Contents Of Every Description & Stock $ 5,000

Item Limit $ 2,500

Covers: The Loss Or Destruction Of, Or Damage To Insured Property Caused

By An Unintended Or Unexpected Event – Anywhere In Australia

Major Exclusions: Theft Unless Resulting From Actual Forcible Entry To A

Securely Locked Premises Or Vehicle

Moths, Termites, Insects Or Vermin

Rust, Mould, Rot Or Other Atmospheric Conditions

Wear, Tear, Fading, Scratching Or Normal Upkeep

Error Or Omission In Design

Faulty Materials Or Workmanship

Testing Or Overloading

Unexplained Inventory Shortage

Fraudulent Or Dishonest Acts

Unauthorised Access To Computers / Data

Flood; Water From The Sea, Storm Surge

Damage Whilst Undergoing Repair

Mechanical Or Electronic Breakdown

Loss Of Use Or Loss Of Earning Capacity




PERSONAL ACCIDENT / ILLNESS

Coverage: 1. Death And Capital Benefits $ 50,000 2. Weekly Accident Benefits $

500 3. Weekly Illness Benefits $

500

Insureds Occupation: Postal, Packing & Freight Services

Special Benefit: It Is Hereby Declared And Agreed That Notwithstanding The Definition Of "Earnings" In This Policy We Will Pay The Weekly Benefits Shown In The Certificate As A "Set Sum Insured" After The Happening Of An Injury Or Illness Giving Rise To A Claim For Such Weekly Benefits, Subject To The Terms And Conditions Of The Policy.

"Set Sum Insured“ The Set Sum Insured Will Replace The Standard Definition Of "Earnings" Under The Policy For A Period Of 24 Months From The Date Of First Establishment Of The Business, Thereafter The Standard Definition Of "Earnings" Will Apply.

Benefit Period: 104 Weeks Maximum From The Commencement Of Payments

Standard Exclusions: War, Invasion, Civil War, Rebellion Or Insurrection Intentional Self Injury / Suicide Flying Or Other Ariel Activity Unless As Passenger In Licensed

Aircraft The Insured Persons Criminal Or Illegal Act Participation Or Training In Any Professional Sport Drink Driving Over The Local / Legal Limit Practice Or Playing Organised Football Of Any Kind Driving Or Riding In Any Race Or Trial Motor Cycling Except For Agricultural Or Pastoral Purposes On A Motor Cycle With An Engine Capacity Of Less Than 250cc

Excess / Deductible: 14 Days



Optional Coverage Available

Motor Vehicle: Cover For Business Vehicles Specially Arranged To Suit Pack & Send Usage &

ActivitiesCover For Private Vehicles

House & Contents: Cover For Buildings and ContentsSear & Associates Have Arranged Special RatesFor Pack & Send Franchisees

Work Cover: Employees Indemnity

Electronic Electronic &/or Mechanical Breakdown& Mechanical Accidental Loss Or DamageBreakdown: Restoration Of Data

Increased Costs Of Working

Income Protection: Coverage For Key Persons. Please Contact Our Office If You Would Like More Information On This Type Of Cover.

Death / Disability: Coverage For Key Persons

Superannuation: Statutory Requirement @ 9% On Employee Wages

Important: The Information Above Is An Outline Of TheCoverage Provided. Full Details Of The CoverAre Provided In The Insurers / UnderwritersPolicy Document.

Monthly Premiums: Are Available By Direct Debit Instalments ViaPremium Finance Providers

Further Information: Please Contact Sear & AssociatesFor Any Additional Information Or Assistance



Basic Risk Management

•Monitored Back To Base Alarm To Be InstalledBurglary Cover Will Be Restricted To $20,000 If A Monitored Alarm Is

Not Installed

•Physical Security Of Premises To Be BolsteredInstall Deadlocks To All External Doors (Within Fire Authority

Guidelines)

•Consider Fitment Of Bars / Grills To All Accessible Rear Windows

•Install And Maintain Fire Extinguishers As Required By Local Authorities

•Power Surge Arrester Installation To Be Considered

•Data Back Up Procedures To Be Fully Implemented

•Equipment Maintenance / Warranty Agreements To Be Checked For Adequacy

•Waste Disposal Procedures To Be Implemented

•Check All Contractors / Sub-contractors Maintain Liability Insurance

•Check All Contractors / Sub-contractors Maintain Workers Comp. Insurance

•Ensure All Contractual Obligations Are Understood (Eg. Lease Or Other Contracts)

Cover For Additional Contractual Liabilities You Accept Must Be Specifically Arranged Per Contract

•Check Schedule Of Standard Cover And Sums Insured For Accuracy And Suitability

•Consider Optional Covers Available

•Report Incidents And Claims To The Insurance Broker Immediately

•Do Not Admit Liability To Others

•Do Not Accept Liability For Others

•Due Diligence To Be Applied At All Times


Marine Insurance Facility - Cover Summary 2010

Cover & Trading Preamble

Cover is provided to Pack & Send Franchisees for all consignments undertaken. (except thosegenerally or specifically excluded, which is clearly outlined on the back of the consignment note section 9.b.i) The structure of cover is designed to provide procedurally simple and cost effective methods of protection, to compliment Pack & Send Franchisee trading activities.

Coverage has been constructed on a tiered liability basis, it is specifically designed for Pack &Send and revolves around the standard trading activities and standard trading terms of the Pack& Send Franchise System.

Marine Transit and Marine Cargo polices provide blanket at call cover, to all participating Pack& Send Franchisees. These policies allow Pack & Send Franchisees to operate the dailyfunction of their business without the need to refer to their insurer for ordinary trading mattersinvolving the risks they contemplate in respect of customers goods.

These 2 policies only provide coverage in respect of material loss or damage to customers goodsaccepted for carriage under a Pack & Send Consignment note. These policies will at the requestof the Pack & Send Franchisee provide indemnity in respect of loss or damage to customersgoods whilst in transit due to accidents or the deliberate acts of third Parties.

Marine Freight Forwarders Liability policy provides coverage in respect of liabilities for loss ordamage to customers goods together with a wide range of typical consequential losses andliabilities that may arise from the handling of customers goods for packing and freight purposes.

About the Formula of Coverage

It is important to understand that whilst all 3 policies provide coverage, the Marine Transit andMarine Cargo policies do so whether the Pack & Send Franchisee has a liability to its customeror not. On this basis the Pack & Send Franchisee has the choice as to whether to provideindemnity or not, this element of coverage facilitates Pack & Send Gold Service. Franchiseescan “call up cover” even if their customer has not included gold service, thus the Franchisee hasthe choice of affording indemnity or not but only up to the standard limits and only in respect ofgoods that are not excluded. A higher excess applies to “call up cover” claims refer to MOA.

Where losses fall outside the Marine Transit and Marine Cargo coverage the Freight ForwardersLiability policy stands behind Pack & Send Franchisees to provide a second tier of coverage.Importantly this coverage is based on strict liability, whilst it intends to indemnify Pack & Sendfranchisees it will only do so if the Franchisee or Pack & Send Systems are libel at law.

Like all insurance policies the Pack & Send policies have exclusions and conditions. Whilst allhas been done to contemplate and provide coverage for all the activities of Pack & SendFranchisees the polices will only respond to claims that fall within the scope of cover.

On this basis it is of utmost importance that Pack & Send Franchisees ensure they understandthe limits, exclusions and conditions of all policies taken, in order to avoid undertaking activities that are not insured / covered.



Cover Limits / Sums Insured

1. Marine Transit Covering Australia Wide Consignments

& Marine Cargo: Covering International Consignments

Automatic Cover “Blanket Limit” Any One Consignment: $ 25,000

Accumulation Limit Any One Conveyance: $ 100,000

Excess $250 Each & Every Claim

2. Freight Forwarders Covering Liabilities Arising From Provision Of Services

Liability: Cover Limit: $ 5,000,000

Excess $1,000 Minimum Each & Every Claim

Special Arrangements Must Be Made In Order To Comply With Procedures as follows:

• Gold Service Consignments Over The Blanket Limit $25,000 - Top Up Cover

To be arranged by endorsement to the policy by accessing our online website. User name and passwords will be issued in a welcoming pack via email.

• Silver Service Consignments Over The Blanket Limit $25,000 – Online Registration

To be logged via the internet using your individual username and password previously

provided (or referred by phone or email for approval) by Sear Insurance Brokers

for monitoring and risk management.

Failure to make the necessary special arrangements will result in either imposed excess’s (as

outlined in the M.O.A) or a failure of the policies to respond on behalf of the Franchisee all together.

Items that fall outside our automatic approval system will need to be manually approved by

Sear Insurance Brokers. This needs to be done when our online system refers you to call us. You

can still complete your quote on the online system even when there is a refer, it just means the

quote is subject to approval!



Premium Calculations For All Marine Policies

The cost for Marine Transit & Marine Cargo to Franchisees is a percentage rate of their own annual Gross Freight earnings. Keep the rate in mind when budgeting, quoting and pricing. The current rate is 1.50% plus other charges. It is safe to assume a total rate of around 2.0% this allows for GST, Brokers fees and other charges.

The cost of Freight Forwarders Liability to Franchisees is approximately .165% of their own annual gross Freight Earnings, this is charged in addition to the Marine Transit & Marine Cargo.

Premiums will be charged annually, or alternatively can be arranged to be put on an instalment program, which is done through our funding company partners, Principal. The premiums are based on each Franchisees estimated Gross Freight earnings including total Packing Earnings as provided to us by Pack & Send Head Office.

Premiums will be adjusted at the end of the insurance period based on Pack & Send Head Office declaration of actual Gross Freight Earnings including total Packing Earnings.

There is no need to account for insurance charges for each transaction as you go. (except consignments that have excluded items. These will need to be accepted, invoiced and paid for individually on a case by case basis)

Consideration ought to be given to the applicable rate you pay when assessing your customer charges. Remember you are paying for all consignments whether your customer elects Gold or Silver Service.

Low Claim Bonus discounts have been incorporated into the costing methodology and are designed to encourage all individual Franchisees to mitigate losses and claims.

The standard low claim bonus discount applies to any Franchisee that has incurred lower than 50% loss ratio for the previous full years trading. Currently the low claim bonus discount is a 20% reduction of the standard rate. An additional 10% low claim bonus discount applies to stores whom have maintained a loss ratio of less than 50% for the previous 3 qualifying years.



Gold Service Warranty

(Refer to section 9 of the Pack & Send Consignment Note Conditions of Contract)

It is the intention of the Pack & Send Franchisees to offer all customers Gold Service in accordance with the consignment note

conditions of contract.

Not only is Gold Warranty a great way to offer your customers protection against the rigors of transportation, but a good tool for a Franchisee to raise their profit margins.

Pack & Send Franchisees must not offer to arrange insurance or advise on insuranceto their customers. It is an offence to offer to arrange or advise on insurance if you are not aholder of an Australian Financial Services License or an Authorised Representative of a Licensee.

Instead your Pack & Send consignment note conditions of contract facilitate the option of offering Gold or Silver Service to customers. Gold service provides a loss and/or damage warrantyto customers (not insurance) for the market value of the goods being sent.

When Gold Service is provided to customers Pack & Send Franchisees will be individually accepting responsibility for the loss or damage to customer’s goods as detailed on the consignment note.

Pack & Send Franchisees will in turn rely on the Pack & Send Marine Insurance Facility toindemnify them for amounts they become libel to pay to customers.

It is therefore imperative for Franchisees own protection, that a consignment note is issued andcompleted in full for each consignment and that the full market value of customers goods is declared for every consignment.

Why is it so Important I get the Consignment Note Signed and Filled In Properly?

When a customer signs the consignment note, they are agreeing to adhere to the terms and conditions on the back of that consignment note.

In the event of a claim, the insurer needs to see that the customer agreed to the terms and conditions on the back of the consignment note, when agreeing to settle a claim.

We anticipate that whilst running a busy Pack Send franchise, there may be a time where you forget to get the consignment note signed. This does not mean there is no coverage, it just means that when settling the claim a penalty excess may apply to ensure that the system is not abused. To see more information on the penalty excess’, please turn to page 24 for further information and excess amounts.


The Significance of Gold Warranty To A Pack Send Franchisee

For a Pack Send Franchisee, Gold Warranty is a tool that can potentially earn another 30-40% of extra revenue per year, if issued and marketed to your customers correctly.

Not only is it a very effective way to put more money in a Franchisees pocket, but also an excellent way to keep your customers coming back again when they are in need of something to be packed and sent.

For any consignment that falls under the $25,000 value mark, gold warranty is automatically accounted for with our blanket cover if the Gold Cover is selected. Meaning there is no need to go online and arrange for registration or extra cover.

For items over the $25,000 blanket cover, our online system is there to guide you through the registration process, and provide automatic acceptance in most cases within a couple of minutes. Once you have received a quote for extra cover from our online system, you have the ability to store that quote on the system and access it at a later date, perfect for when a customer calls up for a quote, and won’t know whether they will go ahead for a week or so.

It is vital that each Pack Send franchisee understands what it is they are selling to their customers before going out and offering it, and remember most importantly that:

The cover is provided for the market value of the goods being sent.

It is important that the customer is not advised they are buying insurance, it is an offence to do so without the appropriate licensing, and that the cover is provided for loss or damage, for their market value.

To really familiarise yourself with the terms and conditions that apply in the case of a Gold Warranty claim, see the last page of this presentation, and read section 9 of the consignment note terms and conditions.

A specific clause that is relevant to the market value of the goods is section 9.c.ii. That should be a clause you familiarise yourself with so when selling the warranty, you are able to recognise and identify key points within the cover.

19

Important – Trade Practices / Fair Trading Laws

The structure of the Pack & Send Marine Insurance Facility contemplates the provisions of the Trade Practices Act whereby the disclaimers and warranties contained in the conditions of contract may not effectively provide protection for loss or damage to customers goods.

These issues specifically and predominantly apply to “consumer goods / consumer transactions” consigned under Silver Service.

Cover under the Pack & Send Marine Insurance Facility, therefore provides blanket cover up to the standard limits in order to ensure that Franchises are reasonably and consistently protected.

Blanket cover is provided to Franchisees for use at their commercial discretion, the policies will automatically provide cover for customers goods where Gold Service is selected on consignment notes.

Blanket cover also applies to all other consignments (Silver Service) at each Franchisees commercial discretion and upon specific request. This is referred to as “call up cover” and is always subject to the standard policy limits, terms and conditions and to the verification of all reasonable considerations of the facts involved, refer to the M.O.A. It should be the Franchisees intention not to indemnify (accept liability for, or pay for losses to) customers that have consigned goods under the Silver Service unless required to do so at law.

For Example:

Mrs Jones comes in with her art work she needs sent to the UK by next week. She tells you not to worry about the Gold service as she has arranged her own insurance. The package is sent on Silver Service, and somewhere along the way the carrier has smashed the frame the picture sat in. Mrs Jones is rather upset, and demands Pack Send pays for the goods, as her own insurance des not cover the item whilst in transit.

Mrs Jones is a very regular customer and so far you have made $10,000 in revenue off her business. You want to keep her as a regular customer, and want not to upset her and for her to take her business elsewhere.

The cover provided to our Pack Send Franchisees accounts that mishaps like this occur. You are still able to claim when Silver Service is selected, as long as it makes commercial sense to do so. The only penalty that may apply in instances like this is a penalty excess, which may be imposed to protect the Pack Send deal we currently have with our insurer.

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21

Online System For Consignments Over $25,000

Pack Send franchisees have blanket cover for any consignment up to $25,000. For those jobs that are over the $25,000 blanket cover limit, we provide an online system to facilitate the need for Pack Send franchisees to register every consignment over the blanket cover limit, whether it be under Gold Service or Silver Service.

Consignments over the $25,000 limit that are to be sent on Gold Service, will incur an extra premium that the system will calculate. Alternatively, if it is being sent on Silver Service, you simply need to register it online.

The system will walk you through around 8-9 steps where you will be asked a range of things such as the packaging, the items being sent and values of the items. The system take around 2 minutes to register or quote a consignment, and once completed, a quote will be shown and saved on the system. This quote will be available for you to register it at a later date.

When you click the Save button at the end, you will be able to access it when you next log on. So when a customer comes in wanting to know how much it will be to their goods, you are able to access the system, calculate his extra premium, save the quote, and then register it when he calls back wanting to go ahead.

If you lose your password or user name, its easy!

Just call Sear Insurance Brokers, and we can

Reissue them for you.

Pack Send – New Business Presentation 2010

Online System For Consignments Over $25,000 Continued

As shown above and below, the system guides you through questions which are relevant to the calculation of extra premium. Naturally, higher risk items, attract a higher extra

premium.



Cover Exclusions

The three policies provide cover for most categories of goods available. There are however, a list of around 8-9 items which are automatically excluded. These items are not covered by any of your marine insurance policies and need to be referred to Sear Insurance Brokers for manual acceptance on a case to case basis.

General Exclusion (Applicable To Marine Transit & Marine Cargo Policies)

• General Policy Exclusions & Conditions - Refer To Policy Wordings On Packnet

Specific Exclusions (Applicable To All 3 Marine Policies)

• Bullion, Cash, Coins, Banknotes

• Jewellery, Gold Or Silver Articles Or Articles Containing Gold Or Silver

• Precious Stones

• Deeds, Bonds, Bills Of Exchange Or Other Documents Representing Money

• Livestock And Bloodstock

• Living Plants

• Imports

• Storage Other Than Incidental To Transit - Goods Held In Storage Upon Customers Request

• Non Freight Services - Do Not Offer Gold Service For Any Services Provided Without Freight

• Static Cover - Do Not Offer Gold Service For Goods Whilst On Display At Third Party Locations

No cover is provided under the marine freight forwarders liability policy for specifically excluded goods

M.O.A - Additional General Exclusions (Do Not Offer Gold Service Without Prior Approval)

• Third Party Pick Ups - where the Franchisee does not sight or handle the customers goods• Postal Items, Mail Or Documents - Including Reports, Titles, Certificates, Legal Documents• Home Delivery / Authority To Leave

Failure to make the necessary special arrangements will result in either higher excess’s (asoutlined in the M.O.A) or a failure of the policies to respond on behalf of the Franchisee alltogether.



Consignment Notes – Conditions of Contract(Refer to front & rear of Pack & Send Consignment Note)

The laws pertaining to the handling of freight within Australia and Internationally are complex.Common law, tortious laws, contractual laws and statutory laws apply. International treatiestogether with differing laws of many countries also apply. Once goods leave your possession yourcontrol of the their destiny is somewhat lost, hopefully the goods will arrive at their destination,undamaged.

This creates a mine field of exposures to business involved in the handling of freight. As such, thefreight industry operates with the use of contractual terms and conditions that endeavour to defineand clarify the responsibilities being undertaken.

The use of terms and conditions endeavour to provide you with certainty, security and legalprotection. This is why you must always use a consignment note.

The Pack & Send consignment note provides a facility to provide either Gold or Silver service or acombination of both should the need arise. Care must be taken when completing the consignmentnote, all goods should be clearly and accurately described and valued on the consignment note.

Customers signatures must be obtained in all instances to ensure that agreed terms of servicehave been acknowledged and accepted by the customer.

If the customer is unable to sign the consignment note in person “the Franchisee” will send thefront and back of the consignment note for signing prior to providing the service. This also appliesfor post, fax, e-mail, telephone and annual agreement letters.

Correct issuance of consignment notes together with adherence to proven procedures will ensurethat all details of the goods being carried and your terms of trade are established at thecommencement of your service contract.

The consignment note will identify the value and type of goods and assist you to identify any needto make special insurance arrangements to protect your exposures to loss or damage of customergoods. The policies in place cover market value as follows "the insured goods are agreedto be valued at invoice cost or value or, if there is no invoice cost or value, at the market value orat the cost, at the time of commencement of transit, of replacing the insured goods by similargoods of same age or condition, limited to the sum insured“.

It is important that Franchisee have customers declare the full market value of their goods whenGold Service is being selected. This will ensure that Pack & Send Franchisees collect theappropriate fees for the actual risks being accepted and will ensure that customers can receiveadequate payment for claims. Franchisees must warn customers of the existence of clause 9.C.II.on the rear of the consignment note which imposes an averaging clause for settlements wheregoods are under valued.

Customers will have a clear understanding of your terms of trade. The consignment note providesyou with protection at law. This translates into satisfied customers and safe business practices.



Risk Management and Special Considerations

Particular care should always be exercised when offering Gold Service or simply whenaccepting certain types of customers goods, especially the goods listed in the special consideration category. The goods in this category have a high propensity to incur loss ordamage.

The Items listed in this category below are covered by the Pack & Send policies, however,Caution should always be exercised. If there are excessive claims / losses incurred by theinsurer the value of the cover provided will diminish due to increased overall premiums and /or reduced benefits.

All Pack & Send Franchisees are encouraged to consider individual exposures to the risksof Loss and / or damage. Franchisees should be cautious with decisions to accept liability forsome goods. Franchisees may need to consider the type of packing, choice of carrier, modeof transport and all other logistical matters in order to manage and reduce the risk of loss andor damage.

Goods Which Require Special Consideration and Applicable Clauses

• Household Removals (Furniture, Antiques, Artworks Clause) (Co-Insurance clause)• Items Of High Value (Co-Insurance clause)• Antiques (Furniture, Antiques, Artworks Clause)• Collections (Pairs & Sets Clause) (Furniture, Antiques, Artworks Clause)• Curios Or Works Of Art (Pairs & Sets Clause) (Furniture, Antiques, Artworks Clause)

A valuation certificate not more than 3 years old should be sought from customers for any antique, collection, curio or work of art, valuations will avoid disputes after loss or damage occurs

• Cigarettes And Other Tobacco Based Products• Liquor, Wine & Spirit• Items pre-packed by customers (Insufficiency of Packing Excess - M.O.A)• Items of a fragile nature (Insufficiency of Packing Excess - M.O.A)• Motor Vehicles Of All Kinds (Precondition reports required prior to acceptance)• Machinery / Electronic Equipment (Mechanical or Electronic Breakdown / Malfunction Clause)

Other Special Consideration

• Goods that may be temporarily stored during transit (ie. going to several destinations) suchas display goods, where the goods may be stored for a period of time that is not incidentalto their transit. Special arrangements must be made to arrange static cover for customersgoods.

• Freight & Packing Charges - Add the cost of your packaging and freight charges to thevalue of goods in order for customers to clearly have these costs covered in the event of aclaim.


Above Clause References from the Terms and Conditions

-Co-insurance clause – 9.c.ii- Pairs and sets clause – 9.c.iii- Mechanical/Electronic Breakdown clause – 9.a.v

Low Claim Bonus

As an incentive to all Pack Send franchisees to minimise the claims that are made throughout the year, a low claim bonus scheme has been implemented.

To be eligible to receive the low claim discount, you firstly must have had a full 12 months trading from your last renewal.

You are not eligible to receive a low claim bonus if your paying a minimum premium.

If you are paying a “minimum premium” it means you are already paying the lowest possible amount for your cover. If this is the case we are unable to lower the cost of the cover any further than what it already is. A minimum premium is charged when a franchisee has an annual turnover of less than $150,000.

The low claim bonus system honours those franchisees that have managed to keep claims to a minimum through out their period of insurance, and can offer up to a 30% discount on your marine policies.

The formula is simple.

Firstly add up your annual premiums for your marines policies to know how much you paid for your cover.

If your annual claims amount is less than 50% of that total, you will receive a 20% discount! Keep that going for three years running, and you will receive a 30% discount!

As our marine policies for all Pack Send Franchisees expire on the same date for everyone each year (March 1) it is easily identifiable which franchisees are able to receive the discount.

If for instance you had a claim ongoing with us that carried over to the next period, we will simply apply the claim amount to the next period of insurance to ensure you wont miss out on receiving the bonus two years in a row.

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Memorandum of Agreement

The Marine Transit, Cargo and Freight Forwarders Liability policies are subject to the conditionsoutlined in the “Memorandum of Agreement” (M.O.A). The M.O.A is attached separately with thispresentation.

All Pack & Send Franchisees sign off the M.O.A at the commencement of their policy term.The M.O.A confirms that Franchisees acknowledge and agree they have a full understanding ofthe procedures, limits and conditions applying to the Pack & Send Marine Insurance Facility.

The M.O.A also imposes penalty excesses for claims where Franchisees do not adhere to theminimum procedures applicable as listed below. Please contact us immediately if you requireclarification of the conditions outlined in the M.O.A.

M.O.A - Standard Excess’s and Additional / Penalty Excess’sAre known and understood by “the Franchisee” and its employees as follows;

• $ 250 Standard Marine Transit and Marine Cargo excess for each and every claim

• $1,000 Standard Freight Forwarders Liability excess for each and every claim

• $1,000 Excess applies when a claim is lodged and the cause of the damage has been attributed to insufficient packaging by “the Franchisee” its employee’s or any other person employed for the purpose of packing the goods or the customer if self packed items are accepted by “the Franchisee”

• $1,000 Excess applies to all “call up cover” claims where Gold Service has not been taken

out by the customer prior to acceptance and carriage of the goods

• $2,500 Excess applies when a Pack & Send consignment note has not been issued, fullycompleted or signed by the customer. (Applicable to Gold or Silver service claims

lodged for consignments within the blanket limit of $25,000)

• $5,000 Excess applies when a Pack & Send consignment note has not been issued, fullycompleted or signed by the customer. (Applicable to Gold or Silver service claims

lodged for consignments over the blanket limit of $25,000)

• $5,000 Excess applies to any claim lodged under Freight Forwarders Liability where the value of goods accepted under Silver Service exceeds the standard “blanket limit” of $25,000 and registration of the consignment has not been lodged by “The Franchisee” with “the Insurance Broker” prior to accepting the goods for transit

• $5,000 Excess applies to any claim lodged under Freight Forwarders Liability where the value of goods accepted under Gold Service exceeds the standard “blanket limit” of

$25,000 and a special arrangement extension of cover has not been specifically pre

arranged by “the Franchisee” with “the Insurance Broker” prior to accepting the goods for transit. 27Pack Send – New Business Presentation 2010


Marine Claims Procedure

Pack & Send Franchisees are responsible for all service to their customers and are requiredto conduct all communications directly with their customer in administration and settlement ofclaims.

Upon submission of a completed claim we will administer settlement of the claim betweenthe insurer, the franchisee and their customer.

The claim process is as follows:

• When a customer reports loss or damage to the Pack & Send Franchisee, they are to document all details given to them in respect of the damage etc.

• It’s important at this stage of the claim that the Pack & Send franchisee needs to request the customer hold the goods for inspection, obtain thorough digital photos of damage, arrange quotes for repairs or replacement (depending on the extent of the damage) and send a loss or damage report form to their customer for completion and return.

• Pack & Send Franchisees then collect all relevant transport documents such as consignment notes, airway bills, bills of lading, packing lists if applicable and proof of delivery to support the customers claim.

• Pack & Send Franchisees should then forward all documents directly to Sear & Associates for consideration. It is important to have all your documents ready when submitting the claim to ensure a speedy settlement process.

• Sear & Associates will evaluate the documents and circumstances and will make recommendations on any additional matters that may require consideration and will lodge the claim with the insurer

• If all matters are clear and the loss can be assessed and finalised based on the documentsprovided Sear & Associates will confirm with the Pack & Send Franchisee that settlement will proceed

• At this stage if any issues are identified that require further consideration prior to settlement such as any Items not covered, matters relating to settlement quantum, procedural problems, delays or other matters such as consequential loss, arrangements will be made for independent assessments, investigations or representation for and with the Pack & Send Franchisee collectively with the insurer

• If any issues are identified in respect of settlement at this point consideration of lodging a claim under the Freight Forwarders Liability policy will be given in an endeavour to fully indemnify the Franchisee

• Upon the insurers agreement to settle Sear & Associates will prepare a deed of release and provide same to the Franchisee for execution by their customer (claimant) in preparation of settlement

• When the Franchisee returns the deed of release, the Franchisee must also forward the excess payment (usually $250) to the insurer via Sear & Associates.

• Upon receipt of the duly executed deed of release Sear & Associates will arrange settlement cheques in favour of the Pack & Send customer (claimant) which will be sent directly to the Pack & Send Franchisee who will then in turn pass on to their customer

• If the Pack & Send Franchisee has already indemnified the customer (claimant) or if the customer has accounts outstanding with the Franchisee settlement cheques can be directed accordingly if advised


Claims Procedure At A Glance

Damage is Reported to P+S by customer

Additional Information Requested from customer

by P+S

Report Form sent to customer

Photos of Damage, Quotes for repair/replacement and a

completed Report Form received from customer

P+S organise all consignment documents such as the con note, carriers con note, packing lists,

customs declarations etc

Once The Customers Documents Are Received

At this point you should have gathered all documentation required for submission to

Sears

Submit all information to Shane at Sears for assessment of the claim.

Once the claim is lodged, Sears will advise if any further information is required. As some claims can get quite complicated, more documentation may be needed to come to an appropriate decision. If further info is required, again send it to Shane for further assessing.

Sears will assess all details and submit the claim to the insurer with a

suggested settlement price. The insurer will then need to approve the

suggested settlement.

Once settlement has been approved a deed of release and EFT form will be sent to P+S. The customer fills in the EFT form so the settlement can be transferred, and the deed of release is signed by both P+S and the customer. Once they are returned, the funds are arranged to be transferred.


If it’s a straight forward claim: