Insurance Consideration

Do unoccupancy conditions still apply for my business premises?

Your policy will likely contain an unoccupancy condition outlining what you must do at your premises for cover to continue. This is an area where insurers are showing early flexibility with many relaxing these conditions. It is unlikely that most insurers will apply terms to your cover or increase premium, but you should notify them regardless – some will still require this acknowledgement.

You should ensure, of course, that your premises is secured, that doors, windows and gates are locked, alarms are active and services shut off where possible.

Do I need to keep my vehicles insured?

Any vehicles still on the road will of course still need motor insurance. If you are taking vehicles off the road and registering them as SORN, we will need to seek confirmation from insurers that they will provide a reduction in premium mid-term.

Whilst the UK Government has extended the inspection regime for commercial vehicles we would recommend that you undertake your own inspection following the Driving Standards form and keep a video log for your own protection.

If my business premises are closed, what happens if I miss the deadline for post-survey risk improvements?

We are seeking consistent confirmation from insurers on this but expect them to show flexibility and leniency on such matters.

Should I notify my Insurers that my Construction site has closed?

Yes. All CAR policies will have a “Stoppage of Work” or “Cessation of Work” clause. These vary but in essence there is an obligation to notify the relevant insurer if work stops for a set number of consecutive weeks or months – typically ranging from 4 weeks to 12 weeks.
If there is cessation, the insurer may have the right to modify cover (i.e. restrict perils), remove cover altogether or charge an additional premium.

My renewal is due during this period how do i estimate my wages and turnover due to unknown length of disruption and recovery period?

Try and be as accurate as you can without overestimating. We can always adjust estimates upwards when this uncertain period is over. There may be additional premiums to pay in future, but this will be at a time when business is returning to normal trading and cash flow improved.

Can i reduce my wages and turnover mid-term so that payments can be reduced.

Employers & Public Liability insurance policies are generally fixed annual contracts. Some are subject to declaration adjustments, but most “package” policies arenot. We and an other insurance trade bodies are pressing insurers firmly for an industry wide response to this request.

Can I take payment holidays?

We are discussing this with insurers, at the moment, there is no commitment from insurers to offer payment holidays and we continue to press this matter with them.

Close Bros are willing to consider assisting customers who experience difficulties through the crisis and gave the following examples as indications of what may be possible. They made it clear that assessments would be made on a case by case basis while being as flexible and supportive as possible:

Up to 3 months payment at 50%

Depending on the instalment profile, the shortfall will be paid by extra payments in the following month(s) e.g. if the customer is on a 10 month profile, there will be an extra full payment in month 11 and a 50% payment in month 12
Default fee waived

Call 0333 321 8567 to discuss:

If you have missed a payment or payment is due in the next 4 days
If payment is due in the next 4-7 days. Customers should only call when their payment is 4 days away.

What impact will the current situation have on minimum and deposit premiums, especially for recent renewed cases where estimates will now be significantly reduced on declaration?

We and other insurance bodies are currently lobbying insurers and the ABI for a common approach.

What impact will the current situation have if I hold an LTA?

Most insurers’ Long-Term Agreements contain conditions allowing them to reconsider any fixed terms agreements, including:

material changes in legislation or regulations
changes in insurers’ reinsurance terms
changes in the activity of the insured and/or their business activities
extraneous factors that materially change the risk profile of the company

It is likely that some, not all, insurers will seek to withdraw from such arrangements. We are talking to them on behalf of all our clients who currently enjoy a Long-Term Agreement for early decisions on maintaining these and will talk to you once their position is understood to decide our strategy for renewal.

What happens of I cancel my Insurance?

Please talk to us first.

We appreciate that at the moment, many businesses are looking to reduce costs, but this could be a false economy. For example, if your insurers have paid a claim under your policy, you are unlikely to receive any refund at all, so you could end up paying a whole years premium for a few months cover. You may also find yourself without compulsory insurances, in breach of mortgage covenants or contractual requirements.

Even though the business might not be trading, there is still the possibility of loss. There may still be visitors (invited or not) to your premises or contract sites who could be injured. “Vacant” buildings are more susceptible to other losses, such as burst pipes, arson or malicious damage and such an event is likely to add further financial burden to your business. If cover is cancelled, most businesses would struggle to survive such damage.

You should also remember that cancelling your Employers Liability will leave a “gap” in compulsory cover. Even if you are furloughing employees, they are still employed and your liabilities remain. If you are retaining any employees, this cover remains compulsory.

Businesses that supply products could still have latent Products Liability with claims arising in the future. Goods already supplied may not have been “consumed” yet and this could happen at any time. If you cancel cover and your products cause damage, injury or illness to a third party during this break in insurance, you will not have any protection.

For professionals who purchase Professional Indemnity insurance, these policies are issued on a “claims made” basis, meaning that you must have a policy in force at the time a claim is made against you, regardless of when the work was actually carried out. In effect, you will have no insurance for any works previously completed.

Your business will be making important, speedy decisions during times of such uncertainty, and in our opinion, retaining Directors & Officers Liability insurance will be essential.

Insurance Consideration