1. Don’t Just Assume Your Broker/Insurer Knows Everything
Engage in consistent communication. Verify the accuracy, completeness, and currentness of all information in all papers, including proposal and statements of fact.
2. Disclosure All Material Circumstances and Facts & Keep Insurers Updated
This is of paramount importance, as the claims verification process is far more rigorous than ever. Insurers will routinely perform checks for CCJs, insolvencies etc as part of the claims verification process.
3. Check Compliance With Policy Terms, Conditions & Endorsements
Insurers impose these for a reason; usually as a result of previous claims/losses. Failure to comply could result in your policy being treated as null and void in the event of a claim.
Check your policy wording, in addition to the schedule of cover, endorsements and statement of fact/proposal forms.
– For commercial policyholders, these are likely to include amongst others: minimum security conditions (physical and alarm); electrical inspection requirements; work away exclusions; portable heater exclusions; trade specific exclusions and/or conditions etc
– For fleet policyholders, these are likely to include: driver age, licence &/or vehicle restrictions; driver checks; reporting requirements in respect of changes of vehicle and MID updates; all vehicles being owned by/leased to the policy holding company (unless specifically agreed otherwise); no employee owned vehicles being driven under the fleet; no business use or commuting, other than in respect of the policyholders business etc
4. Check Your Basis Of Cover
The majority of policies offer coverage for “reinstatement as new.” On the other hand, coverage on a defined “indemnity” basis may be more acceptable in cases where equipment and machinery have been acquired secondhand or reconditioned, provided that “like for like” replacements would be readily accessible in the event of a loss.
– The sums insured must account for inflation and fully represent the reinstatement as new expenses in cases where coverage is granted on a “reinstatement as new basis.”
Not every insurer uses an index link for sums insured. As a result, it’s critical to ascertain (i) how your insured amounts have been determined and (ii) whether they require revision to guarantee they continue to be sufficient.
5. Be Aware Of Average
Be Aware Most plans have an average condition that states that a claim will be pro-rata reduced down to the extent of under-insurance in the case of under-insurance.
For instance, (Declared Value: £80,000 ÷ Full Value: £100,000) x (Claim Value: £50,000) = 80%, or £40,000, is the percentage that the insurance will pay.
– The average condition typically covers every area of the covers. As a result, caution must be used to guarantee that the declared values are always sufficient.f Mean
6. Check Your Scope Of Cover
– Material Damage – Buildings: The market value and rebuild value of a property should not be confused. The cost of demolition, site clearance, and rebuilding after a loss will be far higher than the cost of the initial development, even with new construction. Remember that not all insurance companies that provide renewal terms use index linkage.
Material Damage – Contents: If you haven’t made any new purchases, don’t automatically assume that your contents insurance coverage is still sufficient. When itemized and tallied together, the overall cost of replacing all of the business contents that have been acquired over the years, such as plant, machinery, tooling, fixtures, jigs, racks, fixtures and fittings, etc., might be far higher than expected. Make sure there is sufficient protection in place in case of stock level fluctuations.