For the last 12-15 years, buying liability insurance has been like sailing on calm seas with a following wind on a warm, quiet Saturday afternoon. Yes, there have been exceptions (the waste industry for instance) but for most businesses, the market has been very straightforward.
Unfortunately there is stormy weather ahead. Squally showers at the very least.
Insurer competition is reducing and, following recent changes to the Ogden tables, increases in claims costs are already feeding through. So it’s perhaps unsurprising that insurers are taking the opportunity to rebalance their accounts, increase premiums and adopt a tougher approach to risk management requirements.
It’s not the first time insurers have hardened their stance but what’s different this time is that they’ve exhausted their options to do anything else; they’ve released their old reserves, they’ve taken on the solicitors and claims farmers responsible for the proliferation of claims and they’ve created claims handling centres of excellence.
And still they need to improve their underwriting performance – which means renewing your liability policy could be more difficult and expensive than you expect.
In these circumstances you need the expertise and support of a broker who has sailed in these waters before and can help you navigate back to dry land. That’s where we come in.
At Finch we recommend a simple two stage process:
Step 1 – Show the insurers you take risk management seriously
We all make mistakes from time to time and that’s why we have systems in place to protect us. But no system is perfect and as your business develops so should your systems. Is it time to give yours a sense check?
Health and Safety systems.
Have someone audit both the actual systems and how well your employees comply with them. People will always look to find ways to work around a system to make life easier, so find out if those daily, weekly and monthly checks are being done as rigorously as possible or are boxes just being ticked? In the last 18 months I’ve seen first-hand the catastrophic consequences and significant losses ‘work rounds’ can cause.
Help your insurers defend spurious claims
Many defences fail due to a lack of supporting evidence that proves employees were adequately trained, provided with the right safety equipment or that adequate maintenance and cleaning regimes were in place.
The Ministry of Justice reforms mean insurers are having to make very quick decisions on accepting or denying liability on your behalf so ensure your “paperwork” is complete and up to date and provide your insurers with the information they need quickly. This includes a robust accident investigation report after any loss.
Step 2 – Work with your broker – we work for you not the insurers!
The key to obtaining the best possible premiums is showing the insurers that your business represents less of a risk to them than others in your sector.
To do this you need to work closely with your broker to create a comprehensive and accurate “market submission” which demonstrates how you go about managing the risks in your business. This may include getting the insurers out to meet you well in advance of the renewal.
So, be prepared to invest some time throughout the year to do this and don’t leave it until the last minute. The more the insurers understand your business the better the premiums they offer tend to be.
We will help you to:
- Create an accurate and compelling market submission which answers all the questions an insurer will want to know to provide their best possible terms.
- Build relationships with prospective insurers so they fully understand and appreciate the risks in your business and how you manage them.
- Negotiate hard. Insurance is all about relationships and negotiation. An assertive and experienced broker, like Finch, with our large market relationships is likely to get a better result for you.
- Evaluate both insurer and policy coverage. The devil is definitely in the detail in insurance and we will help you understand exactly what you’re buying and what terms and conditions come with it.
When it comes to our clients, we believe in doing things right and doing the right things!