APJ Vol 55 2023

BUSINESS
BUSINESS
INSURANCE:
REVIEWING THE EMERGING NEW THREATS
An Interview with Suzanne Sparrow
There was a time when businesses could experience a relatively
smooth operational history without the disruption of client
or patient litigation. However, since the pandemic, there is a
disturbing shift towards frequent demands for refunds, with
sometimes disruptive consumer behaviour becoming an evergrowing
phenomenon. To investigate these trends and identify
ways for businesses to gain a better understanding of how to
guard against such incidences, we spoke with Suzanne Sparrow
founder and director of Sparrow Insurance.
APJ Q1: Sue, as an industry specific insurance broker, how
have the frequency of claims changed over the past three
years and are you seeing any patterns?
Sue: In recent times claims have increased by a staggering 50%, so
thank you for the opportunity to share with the industry valuable
information that can help protect their businesses and their future.
There are several behavioural issues that are now creating a
pattern, namely the frequency of individuals seeking refunds based
on a lack of satisfaction of the result of their treatment, rather
than due to practitioner error. Consumers are becoming very
crafty with their terminology and are quite strategic, abusive at
times, attacking practitioners and demanding refunds and damages
for situations that are often unrealistic. These can be very traumatic
for business owners and can result in a growing fear that everyone
is out to get them, which can be quite disruptive to their focus in
growing their business.
We have had cases where there has even been physical violence
where a salon owner was thrown to the ground, or instances
where they have been repeatedly texted with abusive comments
all hour of the night. These instances are become more and more
frequent, and they can be damaging to both the owner and the
staff’s morale and contribute even to mental health issues.
APJ Q2: Through yours and your team’s support, have you
been able to prevent cases going to court?
Sue: As the issue of claims is becoming more complex, this can
be very traumatic and disruptive to a business owner. Our role
is to support them strategically and legally, providing them with
skilled professional help, minimising the impact of their risks and
trauma. We guide them through their challenges and present
them with their best options. Some cased that go to court could
take three to five years, so we guide them on how to prevent
or minimise these disruptions. We also have been able to help
minimise a claim to as low as $120 instead of $1000. In other
instances where someone is seeking compensation of $100,000,
our legal team was able to drop this to $20,000. We recently had
a case where we were able to negotiate and settle out of court
for $5000 instead of $80,000. When faced with these situations,
there are two key elements needed – legal astuteness to navigate
the threats, and the reassurance of care that someone skilled is
standing with you to help you move forward with the least amount
of loss and trauma.
Another objective for us to help businesses minimise claims, as if
a particular procedure is experiencing regular incidences of high
payout figures, the insurance company may decline to cover it in
the future or they may substantially increase the premium.
APJ Q3: In recent times, have you added any additional cover
to your policies to maximise protection for business owners?
Sue: As you can imagine, with the lockdowns there are many
challenges with landlord disputes. So, we have added two
additional covers to help protect businesses - one being additional
cover of up to $25,000 for landlord conflicts and the other, a cover
for cybercrime. When a business is hacked, they can lose valuable
data which can be highly disruptive and contribute to financial
losses. We regularly review growing risks and look at ways to
provide added protection for business owners.
APJ Q4: What are the most common misconceptions you are
seeing that is putting businesses at risk?
Sue: I would have to say that the issue of cutting corners by not
telling us all the treatments they perform. This puts them at risk
in the event of a claim for a procedure that is not included in their
policy. If a business is adding a new technology, such as a laser or
IPl, since their original cover, it is important to notify us to add it to
their policy. The other area in minimising risk is to ensure they are
trained and qualified in the procedures they perform.
APJ Q5: Apart from Professional Indemnity/Medical
Malpractice what other areas require protection that
often businesses neglect?
Sue: Sometimes business owners seek to cover themselves and
their staff for the procedures they perform, but neglect to cover
their property for theft and other damages or losses. Another area
that businesses need to be mindful of is if they are creating their
own skincare from home and there is a reaction. These matters
need to be disclosed to us. Part of our services is to review your
needs and provide you with the appropriate guidelines so that you
gain the best protection at the best premium. APJ
For all your needs and to talk to an expert phone 07 5502 8326
admin@sparrowinsurance.com.au | www.sparrowinsurance.com.au
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