January Content Insurance

Availability of Professional Indemnity Policies

It would be careless not to acknowledge the tough year that the professional indemnity sector had in 2019. There were numerous key players across the board of insurance providers that withdrew from the sector. This caused a higher demand and competition for insurance products. This, in turn, caused the cost of many premiums for advisory and service business to rise.

Coming into 2020 as a business, you need to be conscious of the professional indemnity market and understand the cover that your insurer is providing for you. When your policy is due for renewal, it is important that you are checking the renewal carefully to ensure that the cover you require is included. One insurer pointed out that sometimes there can be clauses and restrictions that could be added to insurance renewals. This can mean that the risks your business needs protecting from are actually missing from your policy.

The Personal Investment Management and Financial Advice Association has urged the Prime Minister that smarter regulation in the advice and service sector is required. A reduced number of insurance providers will lead to a reduced number of advisory services; which are well needed and respected by consumers. Many have suggested that a legislative resolution may be necessary if the payment for professional indemnity and compensation fails to be sustainable or sensible.

A wise choice going forward is to use a professional indemnity insurance firm that offers a personalised policy to its clients rather than a restrictive policy. In this instance, smaller providers can be viewed as offering a more personable approach which in uncertain times, should be welcomed. A positive that can be taken from the past year is that the competition in professional indemnity insurers has caused firms to adjust their policies to stand out. So, whilst there may be less insurers on the market, the policies advertised can be more attractive to businesses.

Some bizarre insurance claims

As we begin a new year in the insurance industry, with Brexit back on the nation’s agenda and uncertainty reigning once again, we’d like to offer a moment of levity with a brief selection of the more bizarre, surprising and brazen insurance claims that brokers can come across from time to time.

Nesting animals
If you live off the beaten track, then you’re surely used to being surrounded by nature and local wildlife as a part of your day-to-day. Some local squirrels got a little too friendly with an owner’s classic Opel GT, however, making a nest in the car while it sat dormant for years.
That has nothing on a driver who rented a vehicle for travelling in Mexico and stopped to inspect damage after a minor accident to find a large snake had taken residence in its engine.

We all make mistakes…
Insurer Allianz made special note of a valet who had just completed cleaning a brand-new sports car worth upwards of £150,000 who unfortunately proceeded to smash it into another similarly expensive sports car by accidentally pressing the accelerator. We’re sure that went down well with all parties…

Somewhat less forgivable was an incident person responsible for placing a lit sparkler into a dog waste bin, only for it to catch fire and burn a nearby furniture shop to the ground.

Leave it to the professionals
Here’s a lesson in leaving boiler repair for plumbers; one claimant’s attempts to repair their boiler backfired spectacularly and indeed, literally, with the tank itself experiencing such a build-up in pressure that it exploded out of its house with enough force to damage several cars that were parked nearby.

Emoogency surgery
One particular claim as noted by Compare.com really caught the eye; a farmer helped to delivery a calf birthed by one of his cows, but needed to claim on the loss of his iPhone in the process as they’d unwittingly left it inside the bovine in question. We were unable to confirm, but we’re presuming that their insurer didn’t press to firmly for the details!

Black Box car insurance

Black boxes have become a common component of car insurance for many young drivers. The telematics technology monitors your speed, the way you handle your vehicle, and in some cases, what time you drive at.

So why do over a million drivers volunteer to allow insurers to monitor their every moment behind the wheel? Drivers with a black box who drive carefully are rewarded with lower insurance premiums. The data collected by insurers has proved many modern myths about young drivers false – whilst some have been proven.

The data was collected by some of Britain’s biggest telematics insurance providers who discovered the following:

Women are safer drivers than men

Telematics data confirmed one of the most common points of debate for drivers, with women being named the safer drivers of the two sexes. 54% of insurance claims are made by men, whilst 46% belong to women.

17-year-olds are safer drivers than 18 and 19-year-olds

Having only just passed their driving test and still learning their own driving habits, 17-year-olds are actually safer drivers than those who have been driving for a year or two. Growing confidence and freedom from the watchful eye of instructors and examiners, means drivers pick up bad habits.

NHS workers are most likely to be a safe driver

Insurers are allowed to discriminate based on the type of career you have. Given the field they work in, it isn’t surprising that employees of the NHS know the importance of driving carefully. Unsurprisingly, motor racing drivers have a more expensive insurance policy, followed closely by funfair employees.

Black boxes pick up the signs of a crash before they happen

Data collected from black boxes following an accident has revealed that in many cases, there were signs of erratic driving (when compared to the driver’s usual habits) which contributed to the accident. When probed many drivers admitted to scenarios such as stress at work or arguments with a spouse, which influenced their poor driving.

Young drivers need further education on navigating country roads

Many young drivers believe that because the speed limit is 60 mph on a country road, they can stick to that speed when taking corners and flying up and down hills. Black box data has revealed that these types of roads are death traps for young drivers and that inexperienced drivers require further educations on how to navigate roads.

Unsurprisingly speed is young driver’s main issue

The data collected from telematics revealed that one-third of drivers drive too fast in poor road conditions. The data also revealed that drivers who speed 20% of the time increase their risk of having an accident by 87%.

Insurance advice for new drivers

As a new driver, you will be elated to have passed both your theory and practical test and be gifted with the freedom that comes with being able to take to the open roads. Before that final step of purchasing your first car is taken, you should consider the cost of insurance associated with the vehicle and the level of cover that you require.

With two thirds of people taking their driving test in the UK aged 25 or under, and success rates highest amongst this age group, it is a safe assumption that a large proportion of new drivers belong to this young group. With road safety charity Brake stating that drivers aged 17 – 19 account for nearly 10% of fatal and serious crashes, having comprehensive cover is absolutely essential for all new drivers, but with a particular pertinence for those under 25 years of age.

Aside from comprehensive cover, other types of policy available include “third party”, which is the minimum cover required by law – covering damage only to other vehicles or people and not your own costs, and “third party fire and theft” – covering the same as “third party” but with the added protection of your vehicle being damaged, stolen or destroyed in fire.

As aforementioned, a comprehensive policy is key for new drivers and, according to MoneySuperMarket, the average annual premium for new drivers insuring their vehicles under a fully comprehensive policy currently stands at £979 per annum. As the statistics from Brake indicate, new drivers are generally seen as carrying a higher level of risk which results in more expensive policies.

In order to help reduce the cost of your insurance policy as a new driver, there are a number of actions that you can take. A simple option is to choose a policy with a telematics box, also known as “Black Box insurance”, as this can save younger drivers on average £151.25. The telematics box records driving activities and takes into account speed limits, as well as cornering and braking – with the better savings afforded to the most careful drivers.

Selecting a vehicle that is in a lower insurance group will also equate to lower insurance costs. See a list of car variants in the lowest insurance groups below;

Group 1 insurance cars
Ford Ka+ 1.2 Studio
Nissan Micra 1.0
Skoda Fabia 1.0 S
Smart ForFour 1.0 UrbanShadow
Volkswagen 1.0 Take up!, Move up!
Volkswagen Polo 1.0 S

Group 2 insurance cars
Dacia Logan 1.0 Access
Ford Fiesta 1.1 Style
Hyundai i10 1.0
Skoda Citigo 1.0 S
Toyota Yaris 1.0 Active
Vauxhall Corsa 1.4 Active

Group 3 insurance cars
Dacia Sandero 1.0 Access
Fiat Panda 1.2 Pop
Renault Twingo 1.0 Play
SEAT Ibiza 1.0 SE
Smart ForTwo 1.0 Urbanshadow
Vauxhall Adam 1.2 Jam
Vauxhall Viva 1.0 SE

The importance of cyber security

Cyber-crime is currently the biggest threat facing businesses around the world. It has never been easier for criminals to target businesses – big or small – with sophisticated methods that steal your data and leave your business crippled.

Recent years have seen several organisations such as the NHS, HBO and Sony were hit by cyber breaches, leading to business and system downtime and public scrutiny. So it is understandable that many UK cyber security executives are concerned about what 2020 might hold.

According to cyber-security firm Alert Logic's Threat Monitoring, Detection & Response Report, 48% of cyber-security experts said they were concerned that more businesses would be hit with ransomware attacks (such as wannacry) and phishing attacks.

47% also named data loss as a growing concern for businesses, as the public becomes more concerned about the privacy and security of their personal information.

Only 42% were even moderately confident that their organisations’ security would be robust enough to repel a cyber attack, highlighting the level of threat that businesses currently face.

When it came to the likelihood of a cyber attack impacting on their organisation, 32% believed it was more likely that they would be a victim, 29% thought they were now less likely, 22% didn’t think the threat level had changed and a worrying 17% weren’t even sure.

The majority of respondents agreed that the best defence was detection when it came to warding off attacks. However, over half (51%) of respondents said that they lacked the budget and 49% said they had the budget but lacked the skilled personnel to maintain the defence. Only 32% expect to get a larger budget this year, 9% say they will receive less and 54% say their budget will remain unchanged, despite all the high profile cases in the news.

"Overall, a large portion of security spending is driven by an organisation's reaction toward security breaches as more high profile cyber attacks and data breaches affect organisations worldwide," said Ruggero Contu, research director at Gartner.

"Cyber attacks such as WannaCry and NotPetya, and most recently the Equifax breach, have a direct effect on security spend because these types of attacks last up to three years."

As cyber threats become more sophisticated and the probability of an attack on your business rises, it is just as important to focus on a response to an attack, include repairing the damage done, managing media attention and spending on repairing your company’s image. A cyber insurance policy can assist with the cost of responding to a cyber attack, meaning you can focus on the defence of your business.

Drive in Europe post-Brexit

With Brexit on the horizon and the recent election, it is no surprise that a recent survey from the RAC showed that over over a third of motorists had never heard of a Green Card. We answer your questions, to keep you up-to-date and ensure your insurance remains valid.

What is a Green Card?

A Green Card is an internationally-recognised document which proves that you have valid insurance in whichever country you are driving within. Accepted in 47 countries, including all of Europe, and beyond.

Do I need a Green Card?

In the event of a 'No-Deal' Brexit, a Green Card will be a legal requirement in order to drive abroad, despite whether you have foreign travel cover as part of your policy. Currently, there is no legal requirement for a Green Card whilst travelling abroad, but should you be in an accident it will prove extremely useful - some insurers also require for you to have a Green Card in order for your cover to be valid whilst travelling abroad.

 

How much is a Green Card?

Green Cards are free of charge, however individual insurers may charge a small administration fee to process the request.

Do I need to know anything else?

If, in January, a 'No-Deal' Brexit does take place, then Green Cards will be necessary in order to be covered - another requirement may be an International Driving Permit (IDP). An IDP can be issued for 12 months or 36 months and may be a requirement depending on the country that you are visiting.

If you need a Green Card, please contact your account handler for advice.

Is your holiday accommodation insured?

There’s never been more emphasis on correctly insuring your holiday when preparing for a warm or cold weather break. Research carried out by the Association of British Travel Agents (ABTA) last summer discovered that 38% of British holidaymakers were preparing to travel without any insurance, which suggests that the majority of the country’s trips abroad were being covered. However, more recent findings have shone a light on one aspect of our typical holiday experience that is going unnoticed.

Quality Tourism, an accommodation accreditation company are reporting that 58.1% of the customers that they surveyed assumed that their lodgings had adequate insurance, but less than one in three of those questioned confirmed whether appropriate cover was already in place.

“It shows that there is still a gap between what people perceive to be in place automatically in regard to safety, cleanliness and compliance with the law, but in reality, it’s not the case,” offered director Deborah Heather. “Importantly, not enough customers are checking these standards before booking. Insurance is seen as one of the essential elements of any rental accommodation’s minimum standards, but we know that in many cases there isn’t the appropriate insurance in place.”

This shifts the focus back onto those running lodgings or short-term rental hosts on websites such as Airbnb who aren’t providing their customers with appropriate cover in the event of theft, damage or accidents, something that could be hugely costly for both sides.

“If the majority of guests are not bothering to check, it could lead to a very unfortunate situation where they are not covered should they experience theft, trauma or worse, a severe accident leaving them hospitalised or even permanently injured or incapacitated,” commented insurance firm Pikl’s CEO Louise Birritterri. “We very much encourage anyone booking a short-term rental to check whether their host has the right insurance cover in place.”

Whilst all holidaymakers should be more aware of confirming that their accommodation is adequately insured for the duration of their stay, it’s up to those providing lodgings to ensure that the space that they provide is properly covered. Failure to do so could severely damage their reputation and ability to bring in new clients in the event of any incident.

The general election and insurance

Last month proved to be an extremely interesting end to 2019, with a key general election taking place. With the result of the vote being a majority government, the most important consequence of the election on the insurance industry is that of stability and certainty.

After months of industry professionals decrying the lack of information available about the political future of the United Kingdom, we can now see a light at the end of the tunnel. What this means for insurance is that policies and their application post-Brexit are becoming more clear, especially for policies which aren’t solely restricted to the UK – such as holiday home cover in Europe.

Graeme Trudgill, executive director of BIBA, commented “Our work representing insurance brokers and raising member issues means that we work closely with senior politicians and civil servants across all parties. We have enjoyed constructive and productive relationships with the Conservative government over the last few years and we look forward to continuing our representation work with the relevant ministers and MPs.”

Aside from Brexit, 2020 also brings with it important modifications to the insurance industry, chiefly the Whiplash Reforms. The Whiplash Reforms are a part of a wider set of changes introduced by the government in order to change the way that low-value personal injury claims from car accidents are handled. According to the Ministry of Justice the reforms will “reduce insurance costs for ordinary motorists by tackling the continuing high number and cost of whiplash claims.”

Insuring your mobile phone

In these modern days, a mobile phone is essential to many of our day-to-day lives; from using it to wake us up each morning to keeping in touch with people around the globe. For a piece of technology that is so crucial, our mobile phones are so easily damaged, yet very few of us actually insure our phones in case the worst should happen. If your phone was damaged, would you be covered?

Mobile phones are increasing in cost, with the latest models such as the Samsung Galaxy Fold peaking at almost £2,000, meaning that a phone insurance policy is well worth the outlay. Before you take out an individual policy on your mobile phone, however, we would recommend that you check your home contents insurance as you may well have phone cover included in your policy. A recent study from Defaqto found that 99% of home contents policies do indeed include mobile phone cover as standard, however excesses can be higher when claiming through this policy – up to £500.

If your mobile phone is stolen or submerged in water, then it is unlikely that your home contents policy will cover the cost, with Defaqto finding that only 18% of home contents policies covered claims of this nature with regards to mobile phones.

If you have a history of losing your phone or breakages are more likely, then a specific mobile phone insurance policy may be worth considering as the standalone cover will be more comprehensive than that included in your home contents and excesses will also be lower.

For most of us, however, ensuring that our home contents policy is up-to-date and reading the small print will be enough to give us peace of mind that our phones are duly insured.

Anna-Maria Duthie, mobile phone insurance expert at Defaqto, agrees that home cover should be enough and added that ““If you are getting a new phone this Christmas, it is worth considering what you would do if anything happened to it. We are all so dependent on our phones days, you want to make sure you have peace of mind should anything go wrong.”

Protecting your Christmas gifts

The festive period has now passed leaving us with brand new gifts from our friends and family. Some of which, if we’re lucky, can be rather expensive. According to Finder, people in Britain spent as much as £500 on presents in 2019, which means that overall, the UK spent hundreds of millions on festive gifts in 2019!

Whilst Christmas Day itself sees the lowest number of claims for theft compared to a typical day of the year, the weeks following Christmas see a huge spike in thieves attempting to burgle people’s homes. A leading insurer stated that the criminals use this time to take advantage of high value items to target, with the dark nights giving them the further advantage of being undetected.

Popular gifts of 2019 include glassware, jewellery, earbuds for listening to music, and other gadgets, which are all in the higher price range. Its important following Christmas that you take good care to keep your new items safe and secure. A leading insurer listed the top three places that people hide valuables, which have been found to be:

1. Cupboards
2. Spare bedroom
3. Under the bed

As these places are the most common places to hide your gifts, insurers are urging people to get creative with their hiding places for added protection.

If you are a home owner, you shouldn’t assume that your new gifts are covered by your home insurance. It is important to check your own policy to find out what level of contents your insurance provides. If your gifts are extremely valuable, you should consider taking out a separate insurance policy to cover them; even if you have home or contents insurance.

This is because some policies will have a single article limit, which is a maximum amount that they will pay out for a single item no matter how much the item is worth. Gadget insurance can also be taken out on new electrical items which can provide more bespoke protection and wouldn’t affect your home insurance if you made a claim.