Archive for July, 2009
What happens if your neighbour has a fire that affects your business or your home?
Is your business or home close enough to be affected by problems next door? Have you assumed that you will be covered by your neighbours insurance? If you do, you may get a nasty shock, as insurance works best when you cover yourself. Especially if your neighbour assumed nothing would happen to them and decided not to cover themselves. Businesses in central London had to evacuate their premises recently for exactly that reason.
Click here for a recent story showing what happened.
You can arrange for your insurance to pay for income you lose or alternative premises yet only if you have asked for that type of cover before the problem begins. Don’t rely on the features of the policy that was sold to you. There are lots of terms, conditions and exclusions that can trip you up if you’re not aware of them.
In order to arrange this cover your adviser would have helped you calculate how much cover you need to hire alternative premises and equipment, worked out how long you want you might need temporary premises and totalled the cost of relocating everything essential to the new address. This is also true if you work from home, speaking of which – here’s an unrelated yet handy risk assessment for those that do.
So what can you do today to ensure you’re covered? Call your adviser and ask “how much cover have I got if my premises are out of action, when does the cover kick in and how long does it last?” If the answers seem wishy washy, request a reply by email.
Top Tip: You probably don’t have the time to develop a business continuity document – even though it could be as small as one A4 page. So keep a list of equipment that is critical to your business off site so you don’t have to rely on your memory. Remember what happened on “snow day” and focus on what didn’t work in your business that day. They’re probably your weak points.
See our top tips section for simple ways to help yourself today.
Health & Safety
Discover how to help your business before your neighbours suffer a catastrophe
Did you know insurance claims don’t always get paid when health and safety investigations are underway? There are four companies being prosecuted for H&S failures following the Buncefield fire of 2005. Have their claims for loss of profit and damage settled quickly and swiftly? Imagine the neighbouring businesses had assumed that they didn’t need to arrange their own cover because the site was “bound to have insurance”. A lot of people I’ve helped over the years originally thought they didn’t need insurance for that reason.
At the very least it will take ages for the case to be heard and a successful prosecution could lead to the insurance companies recovering their losses from the companies concerned. I expect that this case will be a watershed much as the Piper Alpha disaster of distant memory.
It is common for health & safety to be maligned yet the small concerns that businesses feel need little attention are often the areas that lead to bigger problems. Health & Safety is about having a robust system for identifying hazards and reducing their impact. If every business did that there would be no need for the “sledgehammer to crack a nut” approach that stifles common sense.
So ask yourself, is your business safe enough to work in? Is it safe enough for your child to work in? If you hesitate to say yes you may not have done all that is reasonable. And if you haven’t done what’s reasonable you’re probably not complying with legislation. And your insurance is dependent on that.
Top tip: Visit the HSE website and search for what you need.
See our top tips section for simple ways to help yourself today.
Insurance Myths – Part 4
To claim or not to claim
I’m often told that businesses have been advised not to make insurance claims because premiums will go up. This is certainly true in some cases yet I feel that analysing trends is the most appropriate way to work out if an incident will lead to a premium increase.
Insurance companies want to make profits. If you have been with an insurance company for 3 years and made two small claims you are still profitable. If the claims were for similar reasons the insurance company would rather nip the trend in the bud than increase premium. Small incidents can lead to larger losses if lessons are not learned.
There are complicated calculations to be done by the underwriters who work for insurance companies because premiums are sometimes broken into sections. If a series of claims are for flood, that part of the premium may have moved into the red and an adjustment can be made to the rate or the excess.
What’s best for both parties is to eradicate the incidents so organisations that are proactive will secure the most competitive rates for the long term. Premium stability is the mark of good rapport between customer, adviser and insurer.
A new insurance company means new policies, terms, conditions, exclusions and warranties. Chopping and changing to improve premiums can sometimes mean your new insurance company takes a hit in the first year. Terms are likely to deteriorate at renewal.
TOP TIP: Discuss every incident especially “near misses” with your adviser. They may have experience of risk prevention strategies which can prevent recurrence. These can prevent minor problems leading to preventable losses which are usually followed by increased costs.
See our top tips section for simple ways to help yourself today
Insurance Myths – Part 3
Here’s some handy tips to combat workplace stress
Not all employers’ liability policies cover all types of stress claims because stress is not an illness or an injury.
Stress is a modern buzzword for allsorts and you probably have a very simple way of helping anybody in your organisation that might be suffering but you might not know about it. Part of health and safety relates to identifying and addressing stress and insurers know that the cost of looking after employees is significantly reduced if proactive assistance is provided. So they give you help lines, usually for free (some even have free phone lines).
All you need to do is create a plan to identify those that are at risk and enforce it, here’s a handy guide http://www.hse.gov.uk/stress/standards/downloads.htm. Provide information and advice to employees, including the help lines, keep a record and plan to review your procedures at least annually. I’m happy to help guide you to the appropriate adviser.
TOP TIP: The help lines are confidential and numbers can be placed on notice boards, in company handbooks or handed to those with symptoms of stress, definitely in private.
See our top tips section for simple ways to help yourself today
Insurance Myths – Part 2
Employers often ask why insurance companies pay the wrong employee claims.
The answer may be that it’s cost effective. Why incur court costs when you know the claimant will accept less than the cost of mounting a defence? The other answer is that sometimes they have no choice, especially when health and safety planning has been botched or ignored.
There are three questions that accident and injury lawyers will ask all claimants:
- Did your employer have a health and safety policy?
- When did you last receive a copy?
- Have you signed your training record?
If the answer to all 3 is “no” the employer is in breach of a central plank of health and safety legislation. A defence is difficult to mount. Companies that specialise in mounting “no win – no fee” claims realise it’s prudent to keep claims under certain thresholds because they know it is not economical for insurers to incur legal costs attempting to defend. And claims will be paid when they shouldn’t be.
Some insurers seek to recover defence costs from businesses that have shown a flagrant disregard for health & safety. If they cannot repay the insurer the rest of us receive inflated premiums.
The last time I looked, up to 40% of UK employers’ liability premiums were spent defending claims. Premiums would increase further if insurers started fighting losing battles.
So how do we avoid funding these sometimes ill gotten gains? A great way to reduce insurance premiums now and in the future is to embrace health and safety planning. It’s not as complicated as it’s made out to be, common sense is the order of the day. If businesses had effective, up to date health and safety policies, these claims could be declined meaning reduced costs for insurers and lower premiums for all – except those sectors that collectively ignore such plans.
TOP TOP: If you have a governing body or trade association let them know they can help you cut costs by improving standards in your sector. I’m happy to help you work out how to tackle your liabilities.
P.S. Have a peek at some of the myths http://www.hse.gov.uk/myth/index.htm the HSE have exploded.
See our top tips section for simple ways to help yourself today.
7 mistakes made making insurance claims
Discover common mistakes that you should try and avoid and get your claims paid or defended
- Failure to report immediately. You might hope the problem will go away and by not reporting it your rates might not increase. The former is possible yet the latter is unlikely. I cannot think of a single benefit of not reporting an incident immediately.
- Not investigating the cause of an incident. Near misses should also be investigated to assess trends and identify unsafe practices. The supervisor of the area where the incident occurred is best placed to determine whether an injury was plausible, preventable and how to prevent recurrence.
- Perfect documentation will mean a smooth and swift settlement. Anything else will cause delays. Health & Safety risk assessments allied to electrical checks, training records and asset registers can contribute.
- Keeping all parties informed can be tricky with insurers, advisers, claimants and other stakeholders involved yet proves vital when settlement looms. This is especially vital when dealing with injury claims. No mutual mystification.
- Not involving insurers in rehabilitation of an injured party, perhaps a return to work policy is in order. The same could be said of not involving insurers in business regeneration. They have experienced these challenges before.
- Having a passive attitude to claims. Any incident should be handled proactively to ensure any loss is minimised. Insurers don’t pay out if a situation is allowed to deteriorate.
- Not enforcing best practice. Ignorance is not bliss. Failure to adhere to rules and regulations is a sure way to reduce your settlement.
