Natural Disasters: Impact on Commercial Insurance

When a flash flood strikes and causes almost £50 million in damages, it’s often referred to as an ‘act of God’. It’s difficult to apply that same term when science is involved…

Just weeks ago, a Russian rocket transporting a satellite into space malfunctioned and plunged into the Pacific Ocean. It’s still unclear what exactly caused the engine failure (currently described as an ‘abnormal situation’) but it will never be deemed as ‘fate’ by scientists.

The damage to the satellite resulted in a loss of approximately £254 million. Satellites can be insured – predominantly under ‘all risks except’ policies. Should Russia’s satellite have impacted on land and damaged business property, the owners of such establishments would have legally been able to claim.

This is far from an ‘act of God’ and is extremely rare but it’s nice to know you’re looked after against extravagancies such as space damage. When it comes to floods, lightning, fires etc, we should take business insurance much more seriously…

Flood Damage

Early January saw Cyclone Oswald strike Queensland, Australia; inflicting fatalities, injuries and property damage all over the coast. In the wake of the damage, over 6,000 claims were filed and the City of Bundaberg endured its worst ever flood – 1,000 properties completely swamped.

This is just one recent example of an ‘act of God’ occurring outside of the UK but with the wettest year on record just behind us, it’s time to up our own flood precautions.

Business Protection

So, just what does a commercial insurance policy offer you in terms of protection? With a broker, it depends on what you need. For example, you may require cover for external damages only, because your flood defences are adequate enough to prevent water from entering the property (it will take more than a few sandbags). In this situation, the broker can remove the contents feature from your policy and you save money.

For clarity’s sake, let’s take a look at what a standard protection package should include:

  • Property damage
  • Material damage
  • Business interruption

All the liability insurance is included too – protecting you against any lawsuits from customers or staff, but the above three are arguably the most important when it comes to natural disasters.

The exterior of the building can be in such a state, that the business becomes inoperable. Now, this is a world away from a satellite becoming inoperable as your business can be repaired and fit for trade within weeks. During the interim, the broker has your back for any income loss and so the holistic impact from an ‘act of God’ is cushioned by your commercial property insurance.

The Different Types of Motor Trade Insurance

Why Insurance Policies Should Be Tailored to Your Type of Motor Trade Business

Motor trade is a diverse industry and refers to anyone who buys, sells, repairs or maintains vehicles. Motor trade businesses also vary in size and can handle any type of vehicle from vans and motorbikes to vintage cars and commercial vehicles.

While the most common types of motor trade businesses are new or used car dealerships, car valeting firms and car repair services can also get motor trade cover. The company’s yearly turnover could be five cars or five hundred cars so motor trade businesses require different policies according to their size and function.

The beauty of motor trade insurance is that the policies are as flexible as the industry is broad. Each motor trade insurance policy can be tailored to the policy holder’s specific business needs and protect the company against third party damage, fire, theft and accusations of poor standards of work or negligence.

Motor Trade Insurance for Car Dealers

Car dealerships regularly buy and sell vehicles and many allow buyers to give the vehicle a test drive before they buy it.

Since it would be impossible to insure each individual driver that needs to test drive a vehicle, motor traders are able to choose a policy that covers anybody who they give permission to drive their vehicles rather than just one named driver.

Motor Trader Insurance for Garages

Local garages are regularly in possession of different cars for maintenance and repairs and therefore they must also be covered by motor trade insurance. Vehicles will only temporarily be in their possession but mechanics or valets may occasionally need to drive them in order to move or reposition them.

It would be impractical to insure each vehicle individually so motor trader insurance providers can create a bespoke policy where all garage employees may drive any vehicle that is part of their work.

Important Points for All Motor Traders

It is important to remember that the more flexible the policy, the higher the premiums will be. However, discussing your motor trade insurance needs with an experienced motor trade insurance broker like Flint Insurance can secure the right level of cover for your business and ensure you pay the right price for the protection you need.

Commercial Insurance: The Importance of Full Disclosure

Insurers have a duty to protect your business for everything which you disclose in the policy but if you omit certain aspects, accidentally or not, it could result in prospective claims being rejected. Brokers can shoulder this responsibility for you.

Research shows that over the last 24 months, more than 10% of commercial insurance applicants have had a claim contested due to nondisclosure. It is accepted this is mainly owing to confusion and business owners not even realising it is their responsibility to disclose certain things on a policy. It’s an insurance act dating back over a century ago that obliges applicants to full disclosure…

The Marine Insurance Act 1906: “The assured must disclose to the insurer, before the contract is concluded, every material circumstance which is known to the assured, and the assured is deemed to know every circumstance which, in the ordinary course of business, ought to be known by him. If the assured fails to make such disclosure, the insurer may avoid the contract.”

A complete reform is already in discussion and we could soon see commercial insurance buyers required to disclose less information on their policy – shifting more responsibility onto insurers to look into the applicant data. If the insurer then fails to identify a certain detail, then it will be deemed as their fault.

Until then, brokers can take care of everything.

Professional brokers work closely with their clients and comb through every necessary detail to make sure the policy is transparent on both ends – the applicant and the insurer.

How does a genuine broker operate?

Much has been made of ‘ghost brokers’ by the media in recent weeks and there are fears genuine brokers could be caught in the crossfire. Always get in touch with a long-established business liability insurance broker to avoid falling victim to fraud.

Real brokers gather every bit of relevant information from the applicant, to thoroughly assess their insurance needs and level of risk.

In the meantime, their job is to develop strong relationships with insurance providers – via a range of mediums including face-to-face meetings. It is near impossible to build such relationships without that personal touch.

With the applicant details and custom policy at-hand, the broker can then negotiate with their contacts in the insurance sector for the best quote. They have more leverage when it comes to ‘haggling’ because they can commit to things like repeat business.

If the broker is also taking care of the disclosure side of things, again, all parties stand to benefit; the policyholder will never have claim refused on the grounds of non-disclosure, the insurer reduces the level of fraud (albeit sometimes accidental) within their customer base and the broker continues to develop a reputation as a reliable operator.

Countering Insurance Fraud with Everyday Technology

Countering Insurance Fraud with Everyday Technology
Tech-savvy insurers protect business owners against fraudulent liability claims

As an employer, you’re exposed to claims from fraudulent employees. Shielding that is the job of your insurer – who may or may not be using fresh technology to combat criminal activity.

An Airbus worker recently claimed against his employer for damages of up to £500k. His injuries allegedly left him disabled and thus Airbus looked like paying out a hefty sum. However, using surveillance technology, it was later proven that the claimant was in no way disabled (he was actually caught refurbing a house).

Private Investigators

This was a rare case and insurers do not hire private investigators to invade on privacy. It’s a professional practise, designed to legally (and ethically) record evidence of fraud – to then use against a claim that would be otherwise difficult to contest.

Bobby Gracey, Executive Vice President for Global Operations, was recently quoted by the Insurance Times explaining how the use of surveillance in legal cases is at an ‘all-time high’.

The technology has come a long way and it is certainly no longer a case of spies in trees, using telescopic lenses. Remote-controlled cameras in vehicle headrests or even rocks have been used to film fraudsters getting on with their non-hindered lives.

Still, it’s the simpler approach to ‘espionage’ the PIs are taking which have catalysed the success rate; just one visit to the home when a claimant is ‘off work’ can reveal how they’re actually out of the house and working elsewhere.

Everyday Technology

Over the course of the last decade, innovations like Facebook and YouTube have even come into legal play. It can save a lot of time (and money) for an investigator to find a YouTube video of a claimant bungee-jumping, post-claim.

This is just one example but even the odd Tweet can trigger suspicion. Fraudsters are now required to live a complete lie for the rest of their time on Earth. Their employers are the immediate victims but with the help of an experienced insurance broker, they can defend against unfair and criminal claims.

Business liability insurance is in place to protect you from all claims – fraudulent or otherwise. This includes cases from employees and the public alike.

Established brokers can take care of all your negotiation so you get a good quote, so why not set yourself up against legitimate and fraudulent claims? With the right public liability insurance policy safeguarding your business, you’re covered for the worst case scenario – and the best in the industry are seemingly cornering more fraudsters by the day.