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Contractors_hard_hats_insuranceWhen looking for contractor’s insurance, one size does not fit all contracting businesses.

The contracting sector is coming under increasing pressure from rising material costs and a reduction in access to affordable skills. This may lead firms to look for cost-saving measures in other areas such as insurance and opt for a generic policy that may not cover all the risks they face in their day to day work.

Contractors risk underinsurance and higher costs in the long run and should check the terms and conditions and any exclusions before buying insurance cover.

Consequently, contractors are strongly encouraged to work with their insurance broker to seek out specialist cover for their respective trade.

This will help protect against the risk of an insurance claim not being paid as well as protect them adequately should a claim be made against their business.

The key restrictions in insurance cover that contractors need to check are as follows:
  • Height and depth limits
  • Activity restrictions
  • Premises restrictions
  • Hot work exclusions
  • Activity exclusions
  • Subcontractors not being covered
The process of arranging insurance cover shouldn’t be rushed, particularly if the type of contractor work being covered entails a variety of risks such as working at height or with hot materials.

While there are specialist covers available online to purchase direct from an insurer, it makes better sense to use an insurance broker who will seek out the cover that’s right for your business and the specific risks you face.

Other cover you may need
Whilst remembering to insure your equipment, materials and a variety of activities, you may also need professional indemnity insurance if you provide advice to other businesses or one of your customers makes a complaint for negligence or financial loss against you.

You will also need employers’ liability insurance if you employ contractors, staff or part time workers.
In some cases, a contractors’ all risk insurance policy will be the most suitable for your requirements; for other businesses a more tailored solution may be needed.

As your broker, we ask the right questions to ensure we secure the correct levels of protection. Most importantly, we will know the claims record for the insurers we work with. This is one area where contractors should use expert help and find specialist cover – the risks of not doing so can be far reaching.

For more information about insuring your contracting business, call us on 0121 321 4600 or email us at info@clarisksolutions.co.uk
Management_Liability_InsuranceIf you are running a business, you will have made sure you are insured if anything happens to your employees, premises, equipment and stock. Losing any of these could have a major impact on the financial survival of your business.

What you may not have considered is a scenario where you could lose your own personal property or wealth. After all, your company is a limited company and therefore has limited liability so there is nothing to worry about. However, as a director of the company your liability is unlimited. If a claimant cannot get full compensation from your company, they are entitled to seek redress from the assets of its directors.

Directors and company owners often make decisions that entail an element of risk. If, because of a decision you have made, the company is sued for negligence or a wrongful act, claims can be made not only against the company but also against the company directors. This could have massive implications on your own wealth and lifestyle. Legal and investigative costs can run into hundreds of thousands of pounds and that’s before any compensation or fines are levied by the courts.

Management liability insurance
This insurance cover has been specifically developed for companies with a turnover of up to 50 million. It is taken out in addition to your usual commercial and property insurance and does not add very much in the way of premium to your standard insurance costs.

The cover includes directors’ and officers’ liability and company legal liability, employee dishonesty cover and legal pursuit.

You can also include pollution clean up costs and cyber-crime liability.

Access to employment, legal and regulatory advice is available with this policy to help you to manage a critical situation that could have devastating consequences for the company and its directors.

Why risk your own personal wealth now and in the future for a small additional cost?

Some of the decisions you make as a director now may not have an impact for years to come. You will still be liable for those decisions even if you have left the company. The last thing you want is to be caught up in a claim after you have gone.

This insurance cover is ideal for small to medium sized businesses that are just as vulnerable to this type of claim as larger corporations. It is often easier to reach and identify the owners of these companies.

Peace of mind is not easy to come by these days; for the price of a few sandwiches and drinks at your next board meeting, you could protect your company directors from claims on their personal wealth and the company from a devastating loss of funds.

To get a quote for your peace of mind, simply go to the contact page on our website and fill in your requirements and one of our team will contact you with more information about how management liability insurance works and the amount of cover you will need for your company.
Asbestos_insuranceIf you are a consultant, surveyor or contractor working in the asbestos removal industry, you will need a range of insurance to protect your business from the risks involved with handling the material.

If you have been working in the industry for some time, you will be aware of your insurance requirements and of the different policies available to you.

You have probably found that with some policies you must declare the number of contracts you expect to carry out in a year.  On an adjustable policy, this could lead to additional insurance costs at the end of the year if you go over the specified number or value.

CLA (Risk Solutions) contract works insurance
Our specialist asbestos contractors’ insurance is available as a non-declaration fixed policy. You can work on any number of jobs throughout the year and not declare them on your policy, so you know exactly what your insurance premium will be without any surprise costs at the year-end.

Furthermore, if your current insurer is asking you for an additional premium to cover your previous 12 month’s contracts/work, we may be able to cover some of these costs within your new policy when you transfer to us.

We can provide all the other insurance cover you are likely to need such as:
  • Employers liability insurance
  • Public liability insurance
  • Fleet vehicles
  • Legal expenses
Our broking team can source the most suitable and cost-effective insurance products for your business, so you will have all the advice and support you need under one roof to give you the best protection.

The hidden dangers of asbestos
It is a well-known fact that exposure to asbestos is harmful to health. Even low exposure can risk lung damage resulting in cancer or asbestosis, sometimes up to 10 to 20 years later.

Due to the nature of the product, the fibres are only released when the material is disturbed. Asbestos was a popular building product in homes, schools, factories and other premises built before the year 2000. Therefore, contractors working in the building industry are particularly vulnerable when working on properties found to have asbestos used in their construction.

The fibres are invisible to the human eye and, if released into the air, are breathed into the lungs causing long-term damage.

A specialist contractor, licensed or un-licensed (depending on the work involved), can deal with the problems of removing, cleaning up and disposing of asbestos safely.

Asbestos removal contractors, inspectors and analysts offer a professional service to businesses, local authorities and householders to assess and deal with the material when it is discovered. You can find out more on the Asbestos Removal Contractors Association website.
If an employee is injured or becomes ill as a result of the work they do for you, they can claim compensation from you.

Meeting your health and safety duties is easier than you think. Providing you have taken reasonable steps to prevent accidents or harm to your employees (and the injury or illness was caused after 1 October 2013), you shouldn’t have to pay compensation. However, if a court finds you are liable, employers’ liability insurance will help you to pay any compensation for your employees’ injuries or illness.

Though there were fewer prosecutions taken in 2016/17, the statistics show an increase in fines to £69.9 million from the 2015/16 total of £38.8 million. New sentencing guidelines in England and Wales were introduced in 2016. Twenty large fines accounted for £30.7 million of the new figure.

Key figures for Great Britain (2016/17)
  • 1.3 million working people suffering from a work-related illness
  • 2,542 mesothelioma deaths due to past asbestos exposures (2015)
  • 137 workers killed at work
  • 609,000 injuries occurred at work according to the Labour Force Survey
  • 70,116 injuries to employees reported under RIDDOR
  • 31.2 million working days lost due to work-related illness and workplace injury
  • £14.9 billion estimated cost of injuries and ill health from current working conditions (2015/16)
Above taken from http://www.hse.gov.uk/statistics/ and http://press.hse.gov.uk/2017/britains-annual-injury-and-ill-health-statistics-released/

How insurance premiums are calculated
Your insurance premium is calculated by insurers by assessing the risks associated with the type of work being carried out. For example, if you employ mainly office based personnel, your premiums will be lower than for manual workers because the risks are generally lower.

Other factors include type of industry, previous claims history, number of employees and factors that may improve your risks such as management systems you have in place.

Generally, your employer’s liability insurance will cover you against compensation for injury, disease, damage or death together with any related financial losses incurred by the claimant. It will also reimburse the Department for Work and Pensions for any benefits paid out during the claim.

Liability_Insurance_for_health_and_safety_proceduresHow to reduce your employers’ liability insurance premium

Providing you can demonstrate that you have an effective Occupational Health and Safety management system in place, insurers can usually reduce your premiums. An effective management system will help to minimise the risk of injuries and diseases and the risk of a successful claim being made against your organisation.

You may need the support of an external consultant if you do not employ your own health and safety personnel.

CLA have partnered with Health and Safety Assist to provide access to your own safety management hub and expert advice via an online portal. This will help you to manage your entire health and safety processes, action plans and audit trails with documentation all in one place.

Join Health and Safety Assist to improve your health and safety management and reduce your insurance premiums.

For more information visit our web page http://www.clarisksolutions.co.uk/health-and-safety-assist or call one of our account managers.

 
Employers_Liability_InsuranceEmployers’ Liability insurance is compulsory for any business that employs staff. Following the recent changes to personal injury law that came into effect on 27 February 2017, you may want to consider whether you currently have the right level of cover.

While the statutory minimum is £5m and today’s policies tend to start at £10m, many customers will need a higher limit to adequately meet their needs.

You will find our 6 steps (below) for choosing Employers’ Liability a useful guide.

Rate change highlights need for review
Work-related injuries regularly involve issues of long-term care and loss of earnings. In such circumstances, lump sum settlements can be awarded with the intention of compensating claimants over a long period of time.

As these sums can be invested, a ‘discount rate’ is applied to offset prospective investment returns and ensure claimants are not under- or over-compensated.

Since 2001, this rate has been set at +2.5%, meaning settlements were reduced in expectation of positive investment returns being made.

However, on 27 February 2017, the Lord Chancellor dramatically reduced the rate to -0.75%, meaning settlements will now be increased to reflect expected negative returns.

£10m on a single claim is now plausible
The reduction in the discount rate has immediate implications for the potential size of future personal injury settlements.

The following 6 points should be considered when determining a suitable level of cover:

1. Multiple Claimants
The EL indemnity limit applies to each claim individually. However, work related injury claims can often involve multiple employees.

A claim, or series of claims arising out of a single cause, are considered to be one loss; therefore, thinking should always be framed in terms of whether a limit is sufficient to sustain multiple claimants arising from the same incident.

2. Concentration of staff
Employees are often concentrated in one area, for example in an office or on a building site. In these circumstances, one incident has the potential to harm multiple people.

The more staff concentrated in one place, the higher the limits of indemnity customers should be considering.

Individual claims are now reaching £10m. If multiple staff are potentially at risk you need to be questioning whether your cover is sufficient.

3. Nature of activities
The largest EL claims tend to involve injury as opposed to death, with claimants suffering long-term loss of earnings and the need for continuous care.

You should therefore consider whether customers are engaged in any activities with a higher risk of injury, such as working at height.

4. Hazardous locations
Certain locations are more susceptible to incidents and more likely to involve multiple people.

Common examples include offshore locations, railways and airports.

5. Inner limits
Most EL policies include some common limitations. For example, incidents arising from terrorism or offshore will typically be limited to the statutory minimum of £5m.

While these don’t impact the majority of customers, inner policy limits need to be considered depending on your company’s activities.

6. Future circumstances
EL claims can arise years after the alleged incident – in the case of work-related diseases, this can even be decades later.

Between buying a policy and a claim being settled, a lot can change to affect final settlement values.

The recent change in the personal injury discount rate is a perfect example of this. You’ll want to factor-in some contingency for prospective claims inflation.

Options for increasing limits
You should talk to your broker or insurer if you think higher limits are required.

Sometimes a more economical option is to source an excess of loss policy, which delivers the required capacity above your primary limit. Your advisor will be able to recommend the best option for your company.

How we can help
CLA’s insurance providers can also help customers prevent incidents occurring and significantly reduce the size of claims that do occur.

To find out more or discuss options for increasing limits of indemnity, please speak with one of our team.
In early 2016 the discovery of a piece of plastic in a Snickers bar in Germany triggered a recall that saw manufacturer Mars withdraw its chocolate bars from the shelves of retailers across a staggering 55 countries.

On investigation, it transpired that the offending piece of plastic was part of manufacturing machinery originating from its factory in the Netherlands. Even though only a single foreign object was found it was enough to cause a health and safety recall costing the confectionary giant millions of pounds of lost sales.

Most companies plan for a loss scenario of a couple of day’s product manufacture that may be affected before the problem is identified, however in the case of Mars it was six months! It can be argued that smaller companies do not have multiple manufacturing sites and therefore the risk is somewhat minimised.  But should an incident arise, it is not just the cost of the products that have to be recalled but the negative publicity that comes with it and possible legal costs.

The challenges are not limited to incidents occurring within the supply chain. There is of course the threat of damage to property with nearly 10% of the largest fire losses in the UK being in the food and drink sector (Allianz), of that material damage is usually around 50% and 27% is the business interruption loss. As well as the risk of fire, the threat of flooding continues to affect businesses across the UK.

Before you open the factory doors, it would be wise to check you have all of the adequate insurance policies in place and for the correct amounts of cover.

At CLA Risk Solutions we are on hand to offer free advice and a review of your insurance cover to ensure that you obtain the most relevant insurance policies for your business.

Commercial-Insurance-1For example, CLA can offer a comprehensive policy designed to run in conjunction with your Commercial Combined or other primary insurance. Designed for UK registered private companies with a turnover of up to £50m and charities, clubs or associations with up to £2m income.

Cover includes:
  • Directors’ and Officers’ or Trustees’ Liability up to £5,000,000 limit any one claim on a worldwide jurisdiction basis
  • Company Legal Liability up to £5,000,000 limit any one claim
  • Pollution clean-up costs included up to £25,000
  • Cyber Liability included
  • Employee Dishonesty cover included for £100,000 limit any one period of insurance
  • Employment Practices Liability up to £5,000,000 limit any one claim as an optional section
  • Professional Negligence cover included (for charities and associations only)
  • Access to Employment, Legal and Regulatory advice
  • Crisis public relations advice helpline
Call one of our Account Managers for more information.
Directors and Officers Insurance

It all started back in 1929 with the Wall Street crash, when it was felt that many directors involved could face legal action from angry shareholders. Increasingly popular in the USA, Directors and Officers insurance over the past few years has started to emerge in the UK too. It is a common misconception that legal expenses or professional indemnity insurance provide all the cover needed, however this cover is not always adequate.

Directors-and-Officers-InsuranceEven if you have been involved in the running of a limited liability company for years without a problem, your personal assets could still be at risk. FACT: It is not just companies that are at risk, any director, officer or employee carrying out supervisory functions can face unlimited personal liability for actions they take on behalf of the company.

Having legal expenses and PI cover in place is simply not enough, for example a PI policy does not provide cover against actions pursued by shareholders or employees. Frequently taken out by larger companies, SME’s are unfortunately slow to realise the potential benefits of a Directors and Officers policy. The fact is, a smaller business could be more vulnerable because it may have less stringent corporate governance procedures in place and therefore it is even more important for them to consider cover.

A D&O policy will typically cover; claims from shareholders against the management, employment tribunal costs, Health & Safety Executive enquiry costs, legal and defence costs, and damages arising from employment practices and discrimination.

With tougher stances from the regulators the risk of investigation and fines is on the increase. In 2013 fines from the Financial Conduct Authority totalled £474m, a 50% increase on the £312m its predecessor, the FSA handed out in the previous year. A D&O policy may not cover the fine, but behind every investigation there is a significant drain on management time, legal defence expenses and potential brand damage.

Why businesses need Directors and Officers cover
  • Increase in claims - Regardless of the size of the company, they are increasingly seen as targets for criticism.
  • Growing litigious society - Employees, shareholders, investors and creditors know their rights and are far more likely to take action against a company and its directors.
  • World has no boundaries - With an increase in global business, it leaves directors exposed to risks associated with the legislation and regulation in any country in which it operates.
  • Absence of risk management - Often smaller firms can’t afford adequate risk management systems which make them more susceptible to errors.
  • You could lose everything! - D&O claims pose a threat to directors’ personal assets including their homes, possessions and investments.
  • Legal Expense cover is not enough - This should not be seen as an alternative to D&O as limits tend to be lower and provide defence costs only rather than damages as well.
  • Family Fallouts - Smaller firms may be in family ownership and therefore disputes can lead to shareholder rifts and greater exposure to litigation claims amongst relatives.
  • Regulators are getting tougher - The risk of investigations are increasing and so are the associated fines. Failing to have D&O cover could be a costly mistake.
 
Insurance is often seen as a necessary evil by many, but when something goes wrong it can be worth its weight in gold. Prudent freight forwarders already appreciate the value of purchasing liability insurance for their business, fully aware of the financial implications that they could potentially face if they become liable for another party’s loss.

Having general liability insurance might not provide you with the absolute guarantee that you are protected for the specific requirements needed for marine freight. You may not realise this until you need to make a claim. So what can you do?

The team at CLA Risk Solutions have put together a few tips to ensure that your liability cover provides you with the correct protection, when you need it most:
  • Ensure that you purchase marine liability insurance because general non-marine liability insurance does not provide cover for international forwarders – remember to check the fine print.
  • Make sure that you have full liability protection to cover all your forwarding operations.
  • Check that your insurance covers you for Errors & Omissions and Legal Liability. As a freight operator you have a contractual liability for a loss regardless of who is responsible.
  • If you trade internationally ensure that you have adequate limits of liability; remember laws differ across the world.
  • Defending an action brought against you can be costly even if it’s not your fault; therefore make sure that your policy covers ‘Defence’.
  • Make sure that General Average and Salvage Charges are included as claims can fall back onto the forwarder.
  • Utilise your own ‘Conditions of Trade’ to limit your company’s liability in your day-to-day business where no standard limitations of liability are employed. Always make reference to them on your literature and website.
  • Never accept liability without first speaking to your insurer.
When it comes to reducing potential losses, we suggest you consider:
  • Freight_forwarders_insuranceNever agree to release containers or cargo without the production of the original Bill of Lading, no matter how well you know your customer.
  • Always keep the original Bills of Lading in a secure place and ideally separate some of them so that if there is a fire or flood you will not lose all of the originals.
  • Reduce the risk of a customer seeking compensation from you for loss or damage to their cargo, by encouraging them to purchase cargo insurance.
At CLA Risk Solutions we are on hand to offer advice and ensure that you obtain the most relevant cover.

If you already have Liability Insurance, we would be happy to provide you with a FREE review with no obligation to purchase, simply get in touch.
 
Providing professional advice as a freelance consultant can be costly if you were to accidently provide incorrect advice or omit to pass on relevant information. Working for yourself is stressful enough without the added worry of potentially being liable for damage claims. Professional liability insurance cover has been designed with you in mind and can be tailored to meet your individual requirements.

The following story is typical of the risks that small businesses have to deal with:

Susan Jones works as a freelance training consultant contracted to a local university providing training courses to students on a variety of marketing techniques. Some of the courses cover the works of many of the famous Masters in marketing theory.

In preparation for the courses Susan put together a suitable programme approved by the university using widely available material gleaned from the internet and various publications and books. The university approved the course and Susan duly went on to produce material that would be given to the students during the course.

The course material was fairly generalist and contained references to the books and websites of the various experts in order to allow the students to follow up on the information should they wish to. There was no suggestion that the course was intended to teach any of the techniques, but was instead aimed at providing the students with the knowledge of what was available and where to find it.

Prof_IndemnityOne of the students of the course was particularly interested in one of the marketing Masters and decided to book a course with him. The student gave the Master a copy of the notes that he had been given by Susan. The Master decided to instruct solicitors to write to Susan alleging breach of copyright and seeking damages of £100,000.

Luckily for Susan she had adequate professional indemnity insurance which covered the costs and expenses of defending the claim. Following a formal apology from Susan the claim for damages was dropped.

Not having Professional Indemnity insurance in place could have been a costly mistake for Susan.

 
The view that Professional Indemnity insurance is simply something forced on you, could leave hundreds of individuals and firms complacent about the level of cover required with disastrous consequences. Professional Indemnity insurance protects your reputation, your business and often your livelihood. Yet industry insiders are shocked how little attention it receives.

Professional_IndemnityThis is a highly litigious age. Did you know that some estimates suggest that the number of people named in lawsuits against social media giant Facebook, is almost the same as the number of people using Facebook?  You are wide open to being sued if you are in a huge range of sectors of trade and industry - consultants, contractors, trainers, professional service companies, estate agents, and anyone else who gives advice or provides an area of expertise. One wrong move and you could be facing claims of negligence, breach of duty, errors or omissions. And if the claimant can prove loss of income, it can put you out of business.

Yet the root cause of the Professional Indemnity insurance misconceptions and under-insurance appears to be quite simply a lack of information.  That’s where an independent local broker like CLA comes in. With specific information about you and your firm we can explain what cover you need and what you need to pay. Crucially, we can also advise on what the costs would be if you don’t protect your professional reputation. We can explain how your cover and the limits within it will protect you against breaches of legislation and actions from other firms and individuals.  We can also talk you through how conscientious and prompt we will be in progressing claims, to help ensure your policy pays out to rectify damage and settle any legal fees and other costs involved. Professional Indemnity insurance can even cover your legal fees in defending false claims.

Not going to happen to you? Think again. Headlines about lawsuits for financial corruption and mismanagement are increasingly common.  But that attack on your professional reputation can come from anywhere. An advertising firm missed a mail shot deadline, as the printer it used went bankrupt. It led to a a claim for  £250,000 for loss of business. An estate agents accused of underselling a property had to pay out £200,000. An auctioneers sued for unwittingly selling stolen paintings was forced to part with £20,000. A travel agent who forgot to mention travel insurance had to pay out £10,000 when their client fell ill on holiday.

So if you don’t want to see years of hard work wasted by one slip-up, talk to us about Professional Indemnity.  We can negotiate great deals on premiums, at the same time as being thorough in the cover we recommend. We can make sure you are not over-paying,  and that levels of compensation in the policy are appropriate to your specific trade sector. Then, if there ever is a action against you, we will step in to personally manage the process of making a claim on your Professional Indemnity insurance.

 
Pollution

The subject of environmental impairment liability has risen up the corporate agenda in recent years, following the European Environmental Liability Directive in 2009 and the arrival of the Environmental Civil Sanction Order in 2011.

Recent research reveals that around a quarter of businesses feel that EIL has no relevance to them. Many companies mistakenly believe that environmental issues stem primarily from sudden and catastrophic accidents, and only in the high-risk industry sectors such as utilities or chemicals require such cover.

However, businesses across the spectrum - from car dealerships, to hotels, schools, property developers and financial services firms - may find that something more routine such as a long-term leak can lead to a gradual polluting of the environment, which can cost hundreds of thousands of pounds to remedy.

A recent incident involving a producer of pastry products was left facing costs of £800,000 after equipment failure led to the release of cream into a river. This resulted in a biochemical oxygen demand greater than that for untreated sewage, causing significant damage to flora and fauna.

Confusion amongst different policies can leave your business at risk especially where there is a belief that general liability products provide sufficient cover against environmental exposures. With a wide range of liabilities, it is important for businesses to understand where coverage on different policies stop and start, and the potential costs.

Business top tips
  • Check for any historical exposures that your business may be liable for
  • If your business is situated in a highly industrialised area, you may unwittingly own land or buildings on what previously was an industrial site that is now contaminated.
If you would like to discuss the option and potential risks to your business please contact us on:
t 0121 3214600
e info@clarisksolutions.co.uk