Insurance Myths – Part 2

Posted by on 8 July, 2009 No comments as yet

Employers often ask why insurance companies pay the wrong employee claims.

 

The answer may be that it’s cost effective. Why incur court costs when you know the claimant will accept less than the cost of mounting a defence? The other answer is that sometimes they have no choice, especially when health and safety planning has been botched or ignored.

There are three questions that accident and injury lawyers will ask all claimants: 

  1. Did your employer have a health and safety policy?
  2. When did you last receive a copy?
  3. Have you signed your training record?

If the answer to all 3 is “no” the employer is in breach of a central plank of health and safety legislation. A defence is difficult to mount. Companies that specialise in mounting “no win – no fee” claims realise it’s prudent to keep claims under certain thresholds because they know it is not economical for insurers to incur legal costs attempting to defend. And claims will be paid when they shouldn’t be.

Some insurers seek to recover defence costs from businesses that have shown a flagrant disregard for health & safety. If they cannot repay the insurer the rest of us receive inflated premiums.

The last time I looked, up to 40% of UK employers’ liability premiums were spent defending claims. Premiums would increase further if insurers started fighting losing battles.

So how do we avoid funding these sometimes ill gotten gains? A great way to reduce insurance premiums now and in the future is to embrace health and safety planning. It’s not as complicated as it’s made out to be, common sense is the order of the day. If businesses had effective, up to date health and safety policies, these claims could be declined meaning reduced costs for insurers and lower premiums for all – except those sectors that collectively ignore such plans.

TOP TOP: If you have a governing body or trade association let them know they can help you cut costs by improving standards in your sector. I’m happy to help you work out how to tackle your liabilities. 

P.S. Have a peek at some of the myths http://www.hse.gov.uk/myth/index.htm  the HSE have exploded.

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7 mistakes made making insurance claims

Posted by on 4 July, 2009 No comments as yet

Discover common mistakes that you should try and avoid and get your claims paid or defended

 

  1. Failure to report immediately. You might hope the problem will go away and by not reporting it your rates might not increase. The former is possible yet the latter is unlikely. I cannot think of a single benefit of not reporting an incident immediately.
  2. Not investigating the cause of an incident. Near misses should also be investigated to assess trends and identify unsafe practices. The supervisor of the area where the incident occurred is best placed to determine whether an injury was plausible, preventable and how to prevent recurrence.
  3. Perfect documentation will mean a smooth and swift settlement. Anything else will cause delays. Health & Safety risk assessments allied to electrical checks, training records and asset registers can contribute.
  4. Keeping all parties informed can be tricky with insurers, advisers, claimants and other stakeholders involved yet proves vital when settlement looms. This is especially vital when dealing with injury claims. No mutual mystification.
  5. Not involving insurers in rehabilitation of an injured party, perhaps a return to work policy is in order. The same could be said of not involving insurers in business regeneration. They have experienced these challenges before.
  6. Having a passive attitude to claims. Any incident should be handled proactively to ensure any loss is minimised. Insurers don’t pay out if a situation is allowed to deteriorate.
  7. Not enforcing best practice. Ignorance is not bliss. Failure to adhere to rules and regulations is a sure way to reduce your settlement.

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Insurance Myths – Part 1

Posted by on 1 July, 2009 No comments as yet

Discover a top tip you can take advantage of today

 

My pet hate has always been the term All Risks because it’s utter……..jargon.

It gives the impression that everything is covered when there are still terms, conditions, warranties and exclusions that can trip up the most seasoned business owner. Insurance claims can lead to insurance problems and, eventually, insurance complaints. The FSA has set up a framework for complaints but it’s still a long winded process.

It costs thousands to sue a broker or insurance company if they make an error or use bad judgement. All of the above should be avoided because cash flow is king and small incidents can lead to a dip in income that could affect budgets set aside for marketing, staff, maintenance or other purposes…

Insurance problems are usually due to a lack of clarity. Either the broker has failed to collect all the information an underwriter requires or the insurance company or broker doesn’t communicate the policy conditions to the client effectively. Even though there is a clear duty to do so before any policy is recommended.

The person that suffers most is the insurance buyer so I recommend that businesses ensure they choose an adviser that seeks to understand the business before the budget. Perhaps give them examples of the type of claims that concern you rather than being blinded by the policy features and confused by jargon

I believe the insurer provides the cover and the adviser interprets how it works when a business needs it, the reassurance that I talk about so often. A business with stock cannot afford not to be covered just because they didn’t store it at the correct height. A business reliant on premises does not always want to fund alternative accommodation itself.

If you have all risks cover within a policy you still need to check the conditions of cover. The best way to do that is to ask the adviser what they are, and then plan how to work with them to manage the risks that are uninsured.

TOP TIP: Don’t accept jargon – it’s imperative you understand the workings of a policy, an adviser cannot possibly envisage all the risks to your business but together you can produce a package of protection that meets your needs. By understanding what isn’t covered businesses can make a judgement on the uninsured losses they are prepared to fund. And find policies that suit them.

See our top tips section for simple ways to help yourself today.

 

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