A Director’s Guide to Business Insurance

D-and-O

DIRECTORS AND OFFICERS INSURANCE: A BUSINESS ESSENTIAL

Imagine you have the opportunity to invest £100,000 for your company, with a 70% chance of providing a 20% return within five years. Do you decide to go for it? Now consider whether your decision would be different if you could be held personally liable for making the wrong decision; your home and other assets are on the line. Do you have the same approach to risk?

This simplified scenario demonstrates why Directors & Officers (D&O) insurance exists. Senior employees are exposed to civil and criminal liability in relation to a host of responsibilities including employee safety, tax and finance law. Company law can also give rise to personal liability, for example if directors know a company is about to become insolvent but continue trading anyway, resulting losses can potentially be recovered from their personal assets.

D&O insurance gives directors and officers the confidence to know there is support to pay compensation or defend claims or prosecutions when things go wrong. It’s not a ‘get out of jail free’ card to excuse negligent behaviour, but it does provide valuable protection in difficult situations.

Let’s consider seven key things you need to know about D&O insurance.

  1. Claims can be brought by a variety of company stakeholders
    It’s not just shareholders who may bring a claim against senior staff. Employees, bondholders, lenders, customers, consumer bodies, suppliers and competitors could all have legal standing to bring a claim. The likelihood is that at some point, every company will face the threat of a claim.

 

  1. D&O insurance is not compulsory
    The law does not require you to hold D&O insurance, but in practice companies can find it very difficult to recruit top talent without having a policy in place. Qualified candidates see insurance as an essential protection and usually ask to see the policy before entering an employment contract.

 

  1. Operating without D&O insurance can cause undue risk aversion
    Failing to put D&O insurance in place will not only harm recruitment; it also impedes the ability of senior executives to make decisions on behalf of the company. Put simply, they are likely to be more risk averse when their own assets are under threat.

 

  1. Professional indemnity insurance and D&O cover different types of risk
    There is often confusion about whether policies for professional indemnity and D&O are the same thing. They are separate: professional indemnity relates to situations where it is claimed that a service or advice has not been delivered to a competent standard. D&O insurance relates to the management of a company and concerns risk connected to governance and oversight.

 

  1. The first policies were developed in the Great Depression
    History time: D&O insurance was created in the 1930s after new laws were introduced in the US to hold directors to account for failings that led to the 1929 Wall Street crash.

 

  1. The law says some areas of liability must be excluded
    Providing cover for every corporate misdemeanour would arguably create a moral hazard in which executives would feel immune from the consequences of their actions. This is why English law says insurance cannot cover some types of penalty and fines. However, D&O insurance can pay for costs such as legal fees in defending a criminal charge.

 

  1. Cyberattacks are increasing risk for directors and officers
    Cybercrime is increasingly common for companies of all sizes; 74% of all small UK businesses have experienced a security breach in the last year. Executives can face claims from customers, shareholders and other interested parties following a breach, with losses being virtually unlimited. This is another incentive to put a quality D&O policy in place.

Do you have the insurance cover you need?

Visit http://www.insureeasy.co.uk or call 01737377250 For all of your insurance needs

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A Director’s Guide to Business Insurance

TWO THIRDS OF LANDLORDS LIVE CLOSE BY TO THEIR PROPERTIES

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TWO THIRDS OF LANDLORDS LIVE CLOSE BY TO THEIR PROPERTIES

It appears that landlords are not only choosing to buy close to where they already live, but prefer to manage them day to day as well.

Two thirds of landlord live within 10 miles of their property, while analysis of 10,000 addresses shows one fifth are only a mile away or less.

Despite promise of higher rent yields, Simple Landlord suggests that familiarity with the area in which they live is one of the deciding factors.

The firm’s findings also show that 65% of the landlords questioned made a conscious decision to invest in property, while 17% become landlords “accidentally”. Meanwhile 9% are buying homes for family members, such as a child at University.

It appears that landlords are not only choosing to buy close to where they already live, but prefer to manage them day to day as well. 65% of landlords prefer to tackle any maintenance issues themselves.

Alex Huntley of Simple Landlords explained the findings, ‘We are seeing an increasing trend of savvy landlords taking direct control of how their property is let and managed and becoming much more self-sufficient,’

‘While it can be easy to bash landlords as faceless investors, these results show they are more likely to be part of the community they invest in and take a personal interest in making sure their property is well maintained and tenancies are long term,’ he said.

The poll revealed that 45% owned a single rental property while 40% owned between two and four. The percentage for those who owned over five homes was lower at 15%.

Some 45% of those polled owned a single rental property, while 40% owned between two and four properties and 15% said they have a portfolio of over five homes.

For more information about how we can help with your property owners insurance. Please feel free to contact us on 01737 377250 or if you would like to handle your insurance on http://www.insureeasy.co.uk

TWO THIRDS OF LANDLORDS LIVE CLOSE BY TO THEIR PROPERTIES

Affordable & Reliable Tradesman Insurance

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Buying Liability Insurance online could not be easier. InsureEasy.co.uk not offers a full Quote-TO-Buy comparison engine for Public Liability Insurance. Compare your insurance needs with the top insurance companies at the click of a button. Commercial Insurance Services Ltd will still be offering a brokers experience, so if you ever need to call us during your policy term we will be at the other end of the phone to guide you with the advice you need. So what are you waiting for!? Click here https://lnkd.in/e73vXVw for an affordable & reliable insurance quote today!

Affordable & Reliable Tradesman Insurance

SHOPPING AROUND FOR CAR INSURANCE BLAMED IN PART FOR RISING PREMIUMS

car-insurance-shopping-101-things-to-remember_3Rather than increasing competitiveness pushing the cost of car insurance down, close analysis shows that the opposite may be true.

A closer look at the most recent AA British Insurance Premium Index showed that the average cost of a comprehensive policy had risen by £12.50 bringing it up to £568 for an annual policy. The average cost of five of the cheapest quotes from comparison websites showed were up by nearly £84.

It seems this increase is down to the reluctance insurers have in offering cheap introductory offers at a loss, as they’re now well aware that most people will shop around come their renewal for a cheaper deal when the policy levels out to its normal rate.

AA director of insurance Michael Lloyd shed some light on one of the reasons for this upward trajectory,

“As more people look for introductory offers there is less incentive for companies to offer loss-making prices to attract new business that will, a year later, go elsewhere. So I believe this is one driver of recent premium increases while insurers are looking for ways to better reward customer loyalty.”

The Insurance Premium Tax (IPT) which rose by 67% between January to March 2016 has also been blamed for pricier premiums. This pushed up the overall cost of insurance premiums up by 15%, the highest ever recorded according to the British Insurance Brokers’ Association (BIBA) and the Acturis Insurance Price Index.

Add to these factors the claims for whiplash which are still “unacceptably high” and the instance of uninsured drivers and you have a trend which shows no signs of back tracking,

“Premiums have not risen by as much over the second quarter as some commentators predicted although it’s still an upward trend that I expect to continue over the rest of the year,” Lloyd said.

 

For more information on why you should use a broker rather than a comparison site, visit http://www.insureeasy.co.uk or call us on 01737377250

SHOPPING AROUND FOR CAR INSURANCE BLAMED IN PART FOR RISING PREMIUMS

Counting the cost: a business interruption event could threaten your company’s survival. Do you need insurance?

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BUSINESS INTERRUPTION CAN HAPPEN AT ANY TIME – ARE YOU PREPARED?

Most of us take our workplaces for granted. We come and go, popping out for lunch or to a meeting, expecting that everything will be the same when we return. But what if something happened to disrupt this smooth flow?

As hundreds of workers found out in the City of London in July 2016, the work environment can become inaccessible in the blink of an eye. A gas leak around Blomfield Street led to the evacuation of many office buildings in the densely packed adjacent streets.

The gas leak took hours to put right. How much did that cost the surrounding businesses? All those missed deadlines, unwritten reports and lost opportunities; the wasted hours spent by some of the most highly paid people in the country.

Are you vulnerable to business interruption?
Business interruption can happen to any company. Adverse weather, civil unrest, fire, burglary, and vandalism: there is a huge range of events that could potentially stop your organisation from operating as normal. No company is totally immune.

While companies usually protect themselves with insurance to cover property, equipment and stock, it is less common to think about the loss of profit during business disruption. Yet in the event of business interruption, the usual costs such as salaries, rent and so on need to be paid, but no new income will be received.

Meanwhile, despite your best efforts, if your business is interrupted then relationships with customers are likely to suffer and they may look elsewhere. You may also miss out on new business opportunities that could have made up the gap.

How business interruption insurance helps
Business interruption insurance protects you when disaster strikes. This form of insurance provides compensation for loss of income as well as assistance with meeting the increased costs of working while the premises are restored, such as temporary offices, overtime, hired equipment or transport costs.

Insurance often also provides cover for marketing costs to tell your customers when you are back up to full speed. An advertising campaign is typically required to ensure this message reaches the right people.

How to manage a business interruption claim
There are some key steps you can take to ensure that if you need to claim on your business interruption insurance, the matter will progress smoothly. Firstly, before taking out insurance make sure that you read the policy carefully and understand exactly what is covered, what is excluded and what excesses are applicable. You should also be clear about time limits for submitting a claim.

When a business interruption event occurs, document the event and damage as far as you are able. This might include taking photographs, making notes, and keeping contact information of any emergency or remedial services you used. Be careful to keep receipts for payments in relation to the disruption.

The more information you can provide with a claim, the more likely it is to proceed quickly and successfully. Of course, ensuring you purchase insurance from a reputable and reliable provider is also essential.

Counting the cost: a business interruption event could threaten your company’s survival. Do you need insurance?

What would you guess tops the list for holiday regrets? (hint: it’s not travelling without insurance)

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TRAVELLING WITHOUT INSURANCE RANKS #46 ON BRITISH TRAVELLER REGRETS

As far as being sensible goes, having travel insurance should be at the top of the priority list. But it seems like it comes quite far down the list of holiday regrets, behind leaving your passport in your room and being hospitalised, but above riding mopeds without helmets.

SPANA, the animal charity which works towards the welfare of animals working abroad, such as those which are critical to the tourist industry, conducted the research which showed that allowing others to dictate how you spent your holiday was the number one regret. After that came “choosing a destination that was too touristy” and “choosing a destination where there was literally nothing to do.”

Travel decisions featured heavily in the list, with some lamenting the decision to go out the night before an early flight, wishing they’d paid for priority boarding and resenting not leaving enough room for holiday purchases in their luggage.

It also appeared that some holidaymakers regretted not being more adventurous, with  “failing to try local foods when given the opportunity” and “being too scared to experiment with different sports and activities” both making the top 20. On the flipside, “getting food poisoning”, “embarking on a holiday romance” and “drinking local alcohol to excess” shows that a happy medium might make less room for remorse.

While insurance appears to be less of a priority, getting it right could help solve a lot of the other holiday misdemeanours. Alas there’s no cover for “choosing a destination that was too ‘British’”. That’s something that can only be helped with a bit of research.

 

TOP 50 HOLIDAY REGRETS

  1. Letting others dictate how you spent your holiday, rather than doing what you wanted
    Choosing a destination that was too ‘touristy’
    3. Choosing a destination where there was literally nothing to do
    4. Falling out with the people you went on holiday with
    5. Deciding not to purchase a souvenir and then wishing you had
    6. Choosing a destination that was too ‘British’
    7. Forgetting to wear sun cream / sunbathing all day and getting badly burnt
    8. Drinking local alcohol to excess
    9. Drinking too much on a night out and behaving badly
    10. Getting food poisoning
    11. Not bringing plug adapters
    12. Choosing not to leave the resort, and failing to ‘sight see’
    13. Not making any effort to learn language basics
    14. Going on holiday with the wrong people (in-laws, annoying friends)
    15. Failing to try local foods when given the opportunity
    16. Getting ripped off (e.g. not knowing the exchange rate or currency value)
    17. Falling into a deep sleep on the sunbed and getting sunburnt
    18. Being too scared to experiment with different sports and activities
    19. Going out on the last night before a really early flight home
    20. Not taking more sun lotion / mosquito repellent and paying more for it abroad
    21. Walking through unsafe, unlit areas at night
    22. Not telling your bank you’re going abroad
    23. Not ‘switching off’ from work
    24. Forgetting your phone charger
    25. Embarking on a holiday romance
    26. Deciding not to embark on a holiday romance
    27. Not saving space for holiday purchases
    28. Not paying for priority boarding
    29. Talking about work on holiday, instead of enjoying the holiday
    30. Being overly trusting when approached by people
    31. Trusting a local and ending up lost
    32. Not arriving early enough to reserve your sun bed with a beach towel
    33. Not querying your hotel room on booking – so you end up with a bad view
    34. Forgetting your ear plugs
    35. Not knowing local dangers (e.g. avoiding tap water, salads etc)
    36. Deciding to get a really early flight home
    37. Leaving your passport in the room
    38. Sleeping with a stranger
    39. Booking the cheapest hotel – and being stuck in the middle of nowhere (no research on locations, facilities etc)
    40. Working on holiday instead of relaxing
    41. Being hospitalised / sustaining injuries
    42. Not paying extra to take more luggage
    43. Not researching the hotel, and its other residents, well enough
    44. Not knowing what to do in an emergency (e.g. 999 equivalent)
    45. Getting into unsafe taxis
    46. Travelling without insurance
    47. Taking all your currency out with you
    48. Not knowing local customs (e.g. appropriate dress)
    49. Riding mopeds without helmets
    50. Sleeping on the beach

Source: SPANA

 

For more information on how we can provide you with travel insurance visit http://www.insureEasy.co.uk

What would you guess tops the list for holiday regrets? (hint: it’s not travelling without insurance)

SECOND INCREASE IN A YEAR FOR INSURANCE PREMIUM TAX

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No sooner had we gotten used to the increased IPT rate of 9.5%, up from the 6% introduced in 2011, do we find that it’s going up again, albeit by less than the 3% predicted.

Why does IPT exist?
Insurance premium tax was introduced in 1994 at a rate of 2.5%. Insurance is exempt from VAT – the most common form of tax. The new rate of 10% will be introduced on the 1st October 2016, and by February 2017 it will be applied to all qualifying policies, regardless of when the contract was arranged.

Our IPT rate is much lower than the 19% in other European countries, however we still have the fourth most costly car insurance premiums in the world after the US, Austria and Germany.

What impact will it have?
IPT will be applied to personal policies including buildings and contents, pets, car insurance, and private medical insurance. It’s anticipated that the increase of 0.5% will equate roughly to an extra £2 on motor insurance and £1 on building and contents. This is less of a hike than that of last November, which estimates that on average £13 would be added onto car insurance and £10 onto home cover.

Travel insurance remains unaffected, as a new higher level of IPT was first introduced at 17.7%. This has since increased to 20%.

Because the tax is a percentage of the premium, location and circumstances of the policyholder could have a significant impact on how much they would have to pay in IPT.

Why is it being increased?
The extra funds generated by the increase are to be ring-fenced for flood defences and resilience strategies. Last year’s increase was anticipated to generate an extra £1.5 billion, while the extra 0.5% due in October should further boost this figure by 700million.

If you would like to know more about how IPT might affect you specifically, please call us on 01737 373222 or email info@cisl.co.

SECOND INCREASE IN A YEAR FOR INSURANCE PREMIUM TAX