Our thanks and sincere appreciation to VRS Vericlaim who have produced a series of small articles on the cover issues that may present problems in the event of a property claim. Practical and very topical help given the soon to be adopted Insurance Act . Amongst many observations Anthony Jones Insurance Brokers would highlight just a few to grab the insurance buyers attention !
- Running the business and a large loss is very difficult at the same time – businesses would do well to avoid trying to do both . Think about a Project manager or maybe a previous Director who can focus on the claim leaving others to run the business.
- Declaration Linked Business Interruption policies does not allow for a proportionate reduction if the sum insured is too low so providing a regular sense check is prudent .
- Listed properties have all manner of additional costs so allow a minimum of 125% sum insured of that for an unlisted building.
- 12 month Indemnity Periods should be a thing of the past . Supply chain issues , planning complications to reinstate buildings , environmental considerations ,reliance on key suppliers or customers can easily eat into a year to get turnover back to a pre loss level.
- Increased costs provision is essential . A policy that empowers a policyholder to spend money to mitigate the loss without an economic limit test is a good thing .
- Asbestos continues to be problematic with high disposal costs and debris removal costs.
- Plant and Machinery costs need to be kept up to speed with as does the reality of replacing timescales. Think carefully about exchange rate movements.
- Contractual penalties are often in place and should be addressed with a Fines and Penalties extension.
- Defining the word “premises” is useful including considering Suppliers or Customers premises to be brought into the definition.