COVID-19 - Coronavirus

07/04/2020   Will my insurers recognise a reduction in my risk?

Will my insurers recognise a reduction in my risk?

FAQ’s about your insurance … Things you may wonder

 All of us are under exceptional pressure and seeking to reduce our expenses.

Our view is we all have to ‘take the hit’, including Insurers. There are no exceptions.

We know about insurance and here are some ways to reduce your insurance outgoings …

What are my duties?

Has my risk reduced?

During lockdown we recommend you act prudently and minimise risk. As long as you adhere to your normal security procedures, meaning, all your physical security arrangements and Intruder Alarm (if applicable) are fully operative your insurance cover should be unaffected. That said for some, who make an extra effort to minimise risk, there is opportunity (subject to minimum premiums) to make savings to assist cash flow.

 How do my insurers assess and price my premium?

It’s times like this where additional explanations may help you.

Imagine your stock and goods in trust sum insured to be the foundation and ground floor of a building and that all the other policy parts, such as elsewhere risks, entrustments to others, salesman with stock on the ‘on the road’ or at their home, sendings, exhibitions so on and so forth all rise up from there to form the upper floors. 

Areas of risk:

Premises:

Place everything in your safe or vault if you have access to one, thus minimising ‘out of safe’ values.
For retailers with window displays further savings can be achieved due to there being no risk in their displays.

Outside or Elsewhere

Trade deliveries, fetching carrying etc. by you or your employees 

Selling or ‘On the road’ risks 

Home cover (NB: If your sales reps still hold stock or goods in trust you will need to maintain this cover)

Entrustments to others, such as Outwork, Approbation or Assay Office 

Sendings by Post or carriers (beware of removing this part of your cover as discovery of a lost or missing parcel can occur months later giving rise to gaps in cover).

If lockdown becomes extended consider the practicality of arranging a Local PO Box and organise for your post to be re-directed from your office directly to the PO Box. Beware there is generally a time lag of 3 to 4 weeks so perhaps and hopefully it’s not worth the effort. 

Exhibitions 

Any event that you had planned to insure in the foreseeable future may have been cancelled so consider deleting the cover.

Loss of Profits

 Unless your policy is due for renewal over the next 3 months there will be little to gain by reductions in cover. If this section is insured its premium is adjustable in arrears with provision for up to 50% return of the LOP premium subject to minimum credit of £30 plus insurance premium tax. 
Insurance is not available for COVID-19.

 Employers and Public Liability

Most premiums here are set at a minimum level so the likelihood is there is little scope for savings unless you employ several staff and the annual payroll exceeds £100,000.

Employers must maintain Employers Lability insurance for staff either working from home or who have been furloughed under the Government Scheme.

For those Policyholders due for renewal over the next three months payroll projections will need to be adjusted down to reflect revisions which must include a downward adjustment for furloughed employees, perhaps estimated pro rata 80% of salary.

General

 Monitoring business premises is becoming virtually impossible. We need to give you peace of mind and inform you that one can only do that which we are permitted to do … your insurers are unable to condone breaking the Law so if you are unable to monitor to the same degree you first considered possible do not concern yourself unduly. The Financial Conduct Authority have already warned insurers to adopt a flexible approach and ensure they act and treat their customers fairly.

Treating customers fairly has never been more important for firms

To explore your options and find out where you can achieve reductions in your premiums contact Jocelyn or Harry Warren on the usual phone numbers … or by email:

jw@gjis.co.uk or hw@gjis.co.uk

Stay safe and well …