The importance of maintaining insurance during tough times

During times of economic uncertainty insurance brokers are receiving an increase in calls from clients looking to cancel or pause their cover on Contractors Liability Insurance or Professional Indemnity Insurance Policies
Given the current climate we understand times are difficult for businesses but the implications of not having an insurance policy in place are not always clear.

Often clients don’t realise the potential for claims to still occur leaving them to handle the cost themselves with no insurance coverage in force, either becoming liable as a company without adequate insurance or as a director without adequate Directors and Officers Insurance cover.

Here are a few examples why keeping your insurance in place is essential.

Public Liability Insurance

An insurance policy on a ‘Claims Occurring’ basis meets claims that occur during the policy period irrespective of when the claim is made. The usual general liability insurances such as Employers’ Liability, Public Liability and Product Liability are normally on a ‘Claims Occurring’ basis. If a claim was notified after a policy was cancelled midterm but the premium was not received, an insurer may decide not to honour a Public Liability claim in full or at all leaving you liable.

Types of Liability Claim that could occur –

• Plumber – If a pipe burst flooding a building
• Roofer – If a roof bowed or leaked creating damage to a home
• Scaffolder – If scaffolding blows over and causes any third party damage

Even when work is completed there is still the potential for claims to arise and be notified further down the line which you may not be aware of.

Contract Works Insurance

Contract Works Insurance or Contractors All Risks cover provides cover for plant, tools and part built projects. With our current lock down in place what better time to have cover in force. Un finished projects are left to face the risk of fire, storm, flood and vandalism.

Professional Indemnity Insurance

Professional Indemnity is written on a claims made basis as such a valid claim will only be picked up if a current insurance policy is in force regardless of when you undertook the work.

Professional Indemnity Insurance includes a retroactive date which covers a policyholder for any loss from the date the insurance was first held, this could be 5, 10 or 15 years of business activity being covered. A live policy would pick up any loss from a previous years, however if cover is cancelled it will break the continuity of insurance cover which means that past work will no longer be covered, and when a new policy is taken out at a later date it will only cover the activities going forward.

Contractors Yard, Materials and Tools

Where you insure your commercial premises, you have an exposure here too. There is still a chance of theft, fire, storm etc happening whilst we go through this period and the cost of replacing tools and stock or worse still the cost of rebuilding the property should a large loss occur which will not be covered if insurance is not in place.

For a no obligation review of your current insurance arrangements call 01732 252 898 or email info@clarkewilliams.co.uk to speak to one of our specialists.