Has your insurance programme been reviewed recently?

Has your insurance programme recently been reviewed by an insurance professional with knowledge of your industry sector?

If the answer to the above question is no then you may want to read on to find out if your business is properly protected…

Why should I have a technical review..?

Under-insurance or gaps in cover pose a tangible risk to the future trading of a business and can also impact the personal lives of its employees and directors. Don’t wait for the worst to happen…

Why choose Direct Insurance Corporate Risks..?

  • Our team specialise in your industry sector
  • We have insurance professionals that understand your sector and it’s needs
  • We have an in-house specialist claims team on hand should the worst occur

What will we do..?

  • We will meet or arrange a call with you to discuss your insurance program at a convenient time
  • We will then conduct a full technical review of your program and provide a report of our findings
  • The report will highlight the positives, any areas of concern and, or any gaps in your cover
  • We can then provide an immediate solution using our specialist products to resolve any issues and concerns
  • You’ll also receive a full specialist quotation

Why not put us to the test?

Our regional Business Development team cover every corner of the UK. We’d love to come and speak to you about our commercial insurance offering… To arrange a visit simply email info@direct-ins.co.uk or call the team on 0203 960 2944.

To learn more about our exclusive offering visit www.dicr.co.uk today.

Directors’ & Officers’ Liability Insurance

In today’s business climate of corporate transparency and accountability, an organisation’s officers and directors face a myriad of employment-related exposures. Claims can come from many sources, employees, regulators, shareholders, creditors, customers, etc. Ever-changing regulations, increased employee awareness of employment rights as well as the rise of shareholder activism means directors are more frequently at risk, translating to rising claims and escalating settlement costs.

In the wake of recent unprecedented corporate scandals, clearly the trend of corporate accountability applies to large corporations. But smaller privately held companies, including not-for-profits, are not exempt from litigation arising out of the management decisions of their boards. They, too, are at risk.

Regardless of your company’s size, the legal cost to defend a director is substantial, as are the potential penalties that can be personally incurred. Due to liability risks, protecting boardroom talent can be a challenge. To help ensure both your officers’ as well as company’s well-being, a directors’ and officers’ liability insurance (D&O) policy is part of a comprehensive risk financing strategy.

D&O Fills the Cover Gap

Unlike liability policies that provide cover for claims arising from property damage and bodily injury, a D&O policy specifically provides cover for a ‘wrongful act’, such as an actual or alleged error, omission, misleading statement, neglect or breach of duty.

For example, a manufacturer told one of its suppliers to increase inventory because they were expecting a large increase in production. As predicted, demand for the manufacturer’s product grew but the manufacturer increased its inventory with another supplier instead. The original supplier successfully sued the manufacturer, alleging they suffered damages as a result of having relied on the manufacturer’s promise.

A D&O policy provides defence costs and indemnity cover to the entity listed on the policy declarations, which may include:

  • cover for individual directors and officers;
  • reimbursement to the organisation for a contractual obligation to indemnify directors and officers that serve on the board; and
  • protection for the organisation or entity itself.

Indemnification provisions are typically included in the charter/bylaws of a company. While an important risk component, small to medium-sized enterprises or not-for-profit organisations often do not have the financial resources to fund the indemnity provisions, making the bylaws hollow. A D&O policy can provide an extra blanket of security in the event of a covered loss.

A ‘fraud’ exclusion is typically included in a D&O policy, which eliminates cover for losses due to dishonest or fraudulent acts or omission or wilful violations of any statute, rule or law.  D&O cover can be tailored to your needs but be aware that D&O insurers are not consistent with their policy forms. This fact, plus the complexity of D&O claims, requires the insurer to have market commitment and deep expertise as well as the financial resources to handle potential claims.

There are also additional forms of cover to adequately protect directors and officers, including:

  • entity cover;
  • payment priority for insured persons;
  • severability of the insured as well as severability of the application;
  • cover over time, meaning cover responds to past, present and future directors and officers;
  • pay on behalf clause; and
  • duty to defend clause

Consideration for Not-for-Profits

Many not-for-profit organisations with directors and officers often report some difficulty in affording the cost of D&O insurance. To minimise the costs, brokers should recommend choosing only those policy provisions considered most critical. For example, a volunteer-run not for profit without paid staff may skip employment practices cover until it hires staff. To defray the cost of premiums, some not-for-profit organisations consider charging board members a portion of the policy cost.

We’re Here to Help

Whether you are a not-for-profit, privately held or a public company, it is likely that your business can benefit from a D&O policy. Since there is no such thing as a ‘standard’ policy, a professional broker is invaluable when purchasing D&O cover. We understand your organisation and can knowledgeably help design policy language to meet your needs. Contact Direct Insurance Corporate Risks at 01277 844 360 today to learn more about the appropriate protection for your company against potential directors’ and officers’ liability.

Commercial Property Insurance

Your property is subject to many risks, including social and catastrophe perils, structural issues and even disputes with tenants. By purchasing a commercial property insurance policy, you can make sure that you are protected against these risks.

Insurable Perils

Basic commercial property insurance policies provide one of two basic levels of cover: all risks, and named or defined perils. All risks cover generally applies to all losses caused by perils that are not specifically excluded by the policy. Named or defined perils are enumerated in the policy and can include the following:

  • Fire
  • Explosion
  • Lightning
  • Smoke
  • Floods
  • Windstorms
  • Hail
  • Acts of terrorism
  • Riots or civil commotions
  • Theft
  • Malicious damage
  • Vehicles and aircraft
  • Subsidence
  • Accidental damage or loss

Make sure you know what perils are covered under your current policy, and what perils are excluded.

Buildings Insurance

Typical commercial property insurance includes cover for buildings on your property. Buildings insurance covers the cost of rebuilding or repairing buildings after loss or damage due to the perils listed above. Items typically covered under buildings insurance include:

  • Structure (walls, roof, floors, etc)
  • Fixtures and fittings, such as kitchen units
  • Outbuildings
  • Gates and fences
  • Car parks and garages
  • Pipes and ducts
  • Cables and wiring equipment

Property owners commonly insure their premises on a reinstatement basis, rather than on an indemnity basis. This means that instead of the insurance settlement having a deduction for wear and tear (indemnity basis), the settlement would allow you to repair or replace the covered buildings as new (reinstatement). The reinstatement cost is based on the sum insured value of the property—that is, the total cost to rebuild and repair. These costs are determined at the time of the loss, not when the insurance was actually purchased.

When you purchase insurance, it is important to select a sum insured value that takes into consideration the cost inflation throughout the duration of the policy period. Because it is difficult to assess inflation trends, many commercial buildings are insured on a ‘day one’ basis. This entails assessing reinstatement costs and declaring a value for the building at the time the insurance policy takes effect (‘day one’ of the policy). An agreed percentage is then added to the declared value to cover inflation costs. Typically, 15 to 30 per cent is enough to cover inflation during the period of insurance and period of reinstatement.

Loss of Rent

When you are leasing a building or building space to a business or company, you could lose your rental income if your tenant must relocate after a covered peril. Check your commercial property insurance policy to see if it covers loss of rent. If not, you can purchase it as an extension. Keep in mind that this will not cover instances where your tenant refuses to pay rent owed.

Property Owners’ Public Liability

Property owners’ liability covers you for costs and damages—including medical—if a member of the public, or someone visiting your tenant, is injured while on your property. This cover is often included in commercial property insurance policies, but you may need to add it as an extension.

Unoccupied Property

Unoccupied buildings are more susceptible to fire, vandalism, undetected repairs and other losses. If you own unoccupied property, it is advisable to purchase unoccupied property insurance to protect against risks.

Other Insurance to Consider

As a property owner, you may also want to consider the following covers:

Employers’ liability. If you employ administrative or maintenance staff, you are likely required by law to carry employers’ liability insurance. This insurance protects you against claims due to employment-related injuries or illnesses, including compensation and costs for accidental bodily injury to anyone you employ, including temporary staff and volunteers.

Legal expenses. Legal expenses insurance provides cover for legal costs that result from incidents on your property. Covered legal costs may include property protection, repossession, tenant default, legal defence, contract disputes, debt recovery, tax protection and bodily injury.

One of the most important aspects of owning a property is making sure that you have purchased enough cover to be adequately protected. At Direct Insurance Corporate Risks we understand that determining your property’s value is critical, so we’re here to help. Contact the team on 01277 844 360 today to learn more about our insurance and loss control solutions to protect your property.

Business Interruption Insurance

If a fire causes the facility to be temporarily unusable, what would you do next? Would your business be able to pay utilities, wages or any other standing charges without any income? It could take months before the damaged property is rebuilt and the stock, machinery and equipment are repaired or replaced. Ideally, you would move to a temporary location while your permanent place of business is being repaired. Yet, traditional Property Insurance does not cover this move or a loss of income when a business must temporarily close. With Business Interruption Insurance, this setback can be minimised by simply adding this cover to your Property Insurance policy.

What can be included in a Business Interruption Policy?

  • Compensation for lost income if has to vacate its premises as a result of disaster-related damage covered under a Property Insurance policy.
  • Compensation for the gross profits that would have been earned based on previous financial records, had the major loss/peril not occurred.
  • Covers operating expenses, such as utilities, that must be paid even though business temporarily ceased.
  • Covers the increased cost of working, including expenses of operating in a temporary location while repairs to the permanent location are completed.

Considerations for Business Interruption Insurance

  • Business interruption insurance cannot be purchased on its own—it must be added to an existing insurance policy, such as property or office insurance.
  • Purchasers must also determine that the policy’s maximum indemnity period is sufficient to cover the amount of time it will take for the business to recover following a major loss. This includes considering the worst damage or disaster that the business could incur, estimating how long it will take to repair or replace buildings, machinery and stock, and determining the length of time it will take to recover customers and market share. Typical maximum indemnity periods range from 12 months to 36 months, in 6 month increments.
  • Price of cover depends on the risk of disaster to the premises. This may depend on the business location, nature of the business and how easily the business could function at an alternate location on a temporary basis.

Insurance experts estimate that Business Interruption Insurance is one of the most, if not the most, valuable cover available. Yet, it is often overlooked by business owners. Since Property Insurance only covers the cost of physical loss or damage and contents of a business in the event of a disaster, Business Interruption cover is invaluable in covering the loss of income while the permanent business location is being repaired. Contact Direct Insurance Corporate Risks at 01277 844 360 today to learn about our business continuity resources and to make sure that your business can survive an interruption.

Hauliers’ Insurance

Whether you are an owner operator or managing an entire fleet, your haulage business is at risk whenever your vehicles are off the road. Stagnancy is alarming for the transport industry—every second that any of your vehicles are side-lined threatens your earning potential. To ensure maximum profit and efficiency, your employees and vehicles need to be perpetually in motion. Keep them on the move with a hauliers’ insurance policy.

Hauliers’ insurance policies protect you from any loss or damage to goods that you are transporting. Without a hauliers’ policy, you could be liable for loss or damage, which can translate to substantial compensation claims that stop you in your tracks. Clear the road of any obstacles and ensure your own peace of mind with a reliable hauliers’ insurance policy.

Contract Conditions

Hauliers operate according to trade contract conditions that clarify each party’s responsibilities and liability. Typical conditions of carriage include the Road Haulage Association (RHA) conditions or the Freight Transport Association (FTA) conditions. You must be a member of these trade organisations in order to use their conditions of carriage.

Both RHA and FTA conditions of carriage allow hauliers to limit their liability to a certain amount per tonne, but this amount will never exceed the actual goods’ value. Hauliers’ insurance only covers the hauliers’ liability specified in the trade contract, not the actual goods they transport.

Make sure your contract wording also covers liability incurred under the Convention Relative au Contrat de Transport International de Merchandises par Route (CMR), ratified in the United Kingdom by the Carriage of Goods by Road Act 1965. The CMR is a United Nations convention that designates responsibility in the road movement of goods between two participating countries. The CMR facilitates easier travel across national boundaries by establishing standard trading practices and assigning liability, such as making the haulier responsible for shipment delays. Extra CMR liability should be addressed in your hauliers’ policy.

Underwriting Considerations

Insurers rely on underwriters to assess your risks and calculate your premium depending on several factors, including what goods are typically transported. Tanker operators, household removal specialists and hauliers that transport refrigerated goods are all subject to increased underwriter scrutiny due to the sensitivity of their cargo. Policies generally exclude specialist goods like livestock or explosives. It is possible to find policies which insure such specialist goods, though they are likely to have extra restrictions.

Typical Policies

Because hauliers may transport a wide variety of goods, insurers can include an equally wide breadth of cover in their policies.

Hauliers’ insurance policies are diverse. They can be based on a limited contractual liability basis or an all risks liability basis. Depending on your specific policy, it could include the following types of liability covers:

  • Contractual liability cover protects against liability from standard conditions of carriage from the RHA or FTA, or bespoke haulier contracts.
  • CMR liability covers liability generated from shipments which fall under the CMR agreement.
  • Liability at common law provides extra cover, sometimes with a separate indemnity limit.
  • Extended liability offers increased protection for increased liability.

Other possible covers include goods in transit, employers’ liability, public/products liability and business interruption.

Extensions

Insurers echo the array of different hauliers’ policies with a wide range of possible extensions, some of which are enumerated below:

  • Legal costs
  • Hauliers’ property
  • Debris removal
  • Containers
  • Legal liability for consequential loss
  • Drivers’ personal effects
  • Commercial considerations
  • Frozen food
  • Trailers

Exclusions

The exclusions to the average hauliers’ insurance policy can be as numerous as the extensions. Common exclusions include the following:

  • Inner limits are applied to most goods deemed very attractive to thieves, such as precious stones or metals, bottle spirits, tobacco, computers, non-ferrous metals and mobile phones.
  • Theft restrictions designate when a haulier is liable for damage or loss of goods due to theft, such as failing to leave a trailer in an enclosed premises overnight.
  • Claims conditions specify that the haulier must not make any admission, offer, promise or payment without the insurer’s prior consent.
  • Loss or damage while someone other than the haulier is driving the haulier’s vehicle will not be covered.
  • Radiation
  • Terrorism
  • War
  • Riots

Bespoke is Best

Consult with the insurance professionals at Direct Insurance Corporate Risks by calling 01277 844 360 . We can write a bespoke policy that helps avoid any extraneous haulier liability and ensures a smooth path for your business to keep delivering goods on schedule well into the future.