Rebuild Cost Assessment

Protect your organisation from underinsurance

Buildings should always be insured for the amount it would cost to rebuild them. However, fewer than one in ten commercial properties in the UK are covered correctly.  If you are over-insured you are probably paying too much for your buildings insurance. If you are under-insured, you face a reduced pay out in the event of a claim.  

Insurance claims can be reduced by hundreds of thousands of pounds due to under-insurance.   

Watch this short video to see why being underinsured can be a big problem and how you can avoid it. 

Read more:

Underinsurance could cost family almost half a million

Should VAT Be included in Rebuild Costs?    

As your broker we have access to a cost-effective building valuation service, which will provide you with additional comfort and reassurance that your building is correctly insured.  You’ll receive a comprehensive Rebuild Cost Assessment (RCA) report guiding you on how much you should insure your buildings for.   

Protect your organisation from the potentially severe consequences of underinsurance. 

Contact us today to find out more.

FCA Policy Checker

Check if you’re likely to be covered

Clients with business interruption (BI) insurance can now refer to a policy checker provided by the Financial Conduct Authority (FCA).

Based on the outcome of the FCA test case, the online tool is a general guide aimed at assisting policyholders to see if their coronavirus-related BI losses are likely covered.

You can access the policy checker here. You will need to have your insurance policy schedule on hand.

According to the FCA website:

“The policy checker helps you to check whether the wording in your policy is the same as, or very similar to, the 21 policies in the ‘representative sample’ considered by the courts in the FCA’s test case.

“If so, the High Court and the Supreme Court rulings provide important guidance on the way your policy should be interpreted and on the strength of your claim, based wording of your policy.”

How to Avoid Underinsurance

Ensure you have the right amount of cover

Suitable insurance forms a vital part of business continuity planning – but how can you be sure that you are buying the right amount of cover?  Below we share some top tips from How to avoid underinsurance – A guide for small and medium-sized businesses produced by the British Insurance Brokers’ Association.

Top tips

  • Use professional valuation services to help you decide on your sums insured – useful information can be provided by your broker or insurer, or via http://abi.bcis.co.uk or www.rics.org/bcis. Regular valuations will help ensure the sums insured are correctly assessed.
  • Getting the numbers right when you buy your insurance policy will help avoid any inadequate sums insured becoming even less suitable year-on-year.
  • Sums insured for buildings should be based on the cost of rebuilding not the market value – particular features of your premises might affect the cost of reconstruction.
  • For business interruption consider buying declaration-linked insurance because it provides an uplift of 33%, providing that the sum insured and period of indemnity are both correct initially and declarations are made when requested by insurers.
  • When looking at business interruption insurance remember that accountancy and insurance policy definitions of annual gross profit are different. Make sure your assessment of gross profit matches the one in your policy.
  • When thinking about an indemnity period for business interruption covers, remember that 24 months is likely to be the minimum period needed for a business to fully recover its trading level and to rebuild its customer base.
  • Checking documentation is always a good idea; many insurers will make every effort to draw your attention to the important conditions of your policy but it is always important to check to make sure there are no errors.
  • Disaster recovery or business continuity plans may help you recover after a loss.
  • If you buy a simple online package policy check that the liability limits of indemnity, business interruption indemnity periods and other standard policy limits are sufficient.
  • Liability policies are complex. Make sure that you have considered the risk of claims against you and check whether you have taken on any liabilities under your terms of business contracts.
  • New risks sometimes emerge. Consider how the risks to your business change, including areas such as cyber risk or data protection.
  • The costs of claims preparation, such as the costs of instructing an expert or an accountant to help with the claim are not usually included in your insurance cover and may be costly; discuss with your broker whether you need to buy additional insurance to cover this.

As your broker, we can provide advice on how to assess sums insured and can help you to buy insurance cover that meets your needs.  Download the guide for more information on avoiding underinsurance or contact us today with any questions.

FCA Test Case Supreme Court Judgment

Supreme Court hands down its judgment

On 15 January, the Supreme Court handed down its judgment on the FCA’s business interruption test case.

It remains the case that most SME business interruption (BI) policies are focused on property damage and only have basic cover for BI as a consequence of property damage, so are unlikely to pay out in relation to the COVID-19 pandemic and its effects.

Some policies contain ‘non-damage’ related extensions of cover for business interruption, such as infectious or notifiable diseases (disease clauses) and denial of access or public authority closure or restriction clauses (denial of access clauses). The FCA argued that some policy wordings with disease or denial of access clauses do provide cover.

Following the judgment, the FCA advised “The judgment says that most, but not all, of the disease clauses in the sample provide cover.  It also says that certain denial of access clauses in the sample provide cover, but this depends on the detailed wording of the clause and how the business was affected by the Government response to the pandemic, including for example whether the business was subject to a mandatory closure order and whether the business was ordered to close completely.”

Clients who have made claims that are affected by the test case will be contacted by their insurer to discuss what the judgment means for their claim.  The Association of British Insurers has stated that “All valid claims will be settled as soon as possible and in many cases, the process of settling claims has begun.

It is important to note that the Supreme Court judgment does not mean cover will apply in every circumstance or under every policy.

Since 15 January, many insurers have posted policyholder updates in response to the Supreme Court judgment.  We have indicated where an update has been provided since 15 January.  This page was updated on 25 January and will be reviewed regularly, so do check back from time to time.

We are continuing work with insurers to get a resolution as quickly as possible. You can visit the FCA’s business interruption hub for more information here.

FCA Test Case updates since 15 January

Ageas Insurance Limited *Updated

AIG

Allianz Insurance Plc *Updated

Allied World

Ansvar Insurance *Updated

Arch Insurance (UK) Limited *Updated

Argenta *Updated

Aviva Insurance Limited *Updated

AXA Insurance UK Plc *Updated

Axa XL *Updated

Camberford Law Limited

Canopius *Updated

Chaucer *Updated

Chubb European Group SE *Updated

CNA Insurance Company Limited

Commercial Express Quotes Limited

Congregational *Updated

Covéa Insurance plc *Updated

DTW 1991 *Updated

Ecclesiastical Insurance Office Plc *Updated

Ergo *Updated

Folgate Insurance Company Limited *Updated

GB Underwriting Ltd

Gresham Underwriting Limited *Updated

HCC Insurance Services Ltd *Updated

Hiscox Insurance Company Limited *Updated

Imperium Insurance Management Ltd t/as iFarm Underwriting *Updated

JRP Underwriting *Updated

Liberty Speciality Markets *Updated

Markel (UK) Ltd *Updated

Morton Michel Limited *Updated

MS Amlin *Updated

Nationwide Broker Services Limited *Updated

NIG *Updated

Pen Underwriting Limited *Updated

Probitas 1492

QBE UK Limited *Updated

R&Q Commercial Risk Services Ltd

Royal & Sun Alliance Insurance Plc *Updated

Thames Underwriting Ltd

Touchstone Underwriting Ltd *Updated

Travelers

Zurich Insurance PLC *Updated

Unoccupied Property Market Response – Lockdown 3.0

Unoccupied premises due to COVID-19

It is important to distinguish between temporarily closed premises due to COVID-19 and previously longer terms unoccupied premises, the responses contained below are specifically for temporarily closed premises due to government guidelines and will not apply for premises that fall outside of the guidelines. For those customers whom have longer terms unoccupied exposures we recommend that they review their policy document and notify us immediately if they are struggling to adhere to any pertinent policy conditions. The ABI have released the following guidance for those businesses affected:

  • You should continue to check on your unoccupied premises regularly and carry out normal risk management processes unless prevented by any government or local restrictions.
  • If you are unable to visit your premises as set out in your policy, it is best to speak to your broker to discuss. Insurers will look to be flexible around the requirement for individuals to check on their temporarily unoccupied SME business premises regularly. This is as long as business owners have followed the risk management advice provided by their insurer and have taken reasonable endeavours to ensure the premises is suitably secure. However, in some cases where there are higher hazard risks your insurer will be able to advise on the appropriate arrangements for the property being unoccupied and ensure suitable action is taken. 
  • Restrictions will differ between nations and local areas and you should check you are adhering to the law and guidance of the relevant administration or local authority.
  • With the onset of winter, it is important to consider what additional safeguards are needed to prevent damage from occurring in colder weather. This may include turning off water, draining the heating system, or leaving the heating on at a temperature that will protect pipes from freezing and water damage occurring in the property. Further information on protecting the property from water damage is available here

The information below includes the unoccupancy position from specific insurers where we have obtained a response. If your insurer is not listed, please check your policy documents and/or contact your broker for more information. If your insurer is listed, please check your insurer’s occupancy position and if your property is going to be left unoccupied for more than the total consecutive days or you require additional clarity due to the specific circumstances then please make contact.

Ageas

Allianz

Ansvar

Arch

Aviva

AXA

Chubb

Covea

Ecclesiastical

Hiscox

Markel

NIG

QBE

RSA

Zurich

Please be aware that the information from insurers may be subject to change.

Prepare your business for Brexit – Jan 2021

A post-Brexit trade deal could be sealed as talks between the UK government and European Union continue this week.  Before the weekend, both parties said that ‘no-deal’ was the most likely outcome. Whether or not a deal is agreed, you should ensure that your business is prepared for operating under new rules.  Please review the information and guidance below on what arrangements you could face from January 2021 onwards.

Resources to help you prepare for a no-deal Brexit

Create an Action Plan: Answer a few questions for your personalised action list for you and your business from the GOV.UK website.

Importing Goods: If you import goods from the EU, you will need to change your processes from 1 January 2021. Find step by step instructions and prepare your plan now

Exporting Goods: The process for exporting goods to the EU will change from 1 January 2021. Find out what actions you need to take in order to start or continue exporting goods to the EU.

Travelling in Europe: Travel to the EU, Switzerland, Norway, Iceland or Liechtenstein will change from 1 January 2021. You might need an international driving permit (IDP) to drive in some countries. If you’re taking your own vehicle, you will also need a ‘green card’ and a GB sticker.

Find out more if your business is based in Scotland, Wales or Northern Ireland.

Brexit and Driving in Europe

Green Cards for driving in Europe

In leaving the European Union (EU), the UK entered a transition period which ended on 31 December 2020. As a result there will now be a legal requirement to carry a physical document known as a Green Card when driving in Europe.

A Green Card is an international certificate of motor insurance that is accepted in the EU, EEA, Andorra, Serbia and Switzerland.

Green Cards will be required for each individual vehicle and trailers over 750kgs or braked. You may need a separate Green Card for caravans and trailers.

You will be breaking the law if you attempt to drive without a Green Card and may be subject to a fine, having your vehicle seized or prosecution.

Contact us to request your Green Card. Please do so at least a month before you are due to travel so that you receive the document in good time.

We will contact your insurer and your Green Card will be issued either by post or electronically. Print the Green Card on white paper with black ink as electronic copies will not be valid when you travel.

Each trip will need to be notified to the insurer separately and there may be a small admin charge, depending on the insurer.

If you need any further guidance, please do not hesitate to contact us.

Government guidance:
Visiting the EU After 1 January 2021
Driving in the EU After Brexit