Following the recent tragic Grenfell Tower fire, there have been many reports and discussions surrounding the cause of the fire and where responsibility should rest.
Whilst the enquiries into this fire are in their early stages, it is clear that it will be very difficult to establish responsibility and a number of different organisations could be brought into play.
It is anticipated that the insurance claims costs alone could be anywhere from £200.00m to £1.00bn. It is therefore inevitable that some of the results of these reports will focus on the insurance covers arranged by a variety of parties who are associated with the fire and the building itself. The focus is likely to be on the types of insurance policies in place and the sums insured/limits of indemnity that are effective under the various policies.
As Insurance Brokers we believe that, in the sad aftermath of this fire, it is important to consider some of the implications of its consequences and ask that our clients assess the enormity of potential claims. Consideration should be given to what risks you are exposed to and to identify them.
It is therefore vital that we bring to your attention a number of matters that should be the subject of a thorough review of your insurance arrangements, along with reference to some other related subjects :-
- Insurance covers
Do you have protection for directors, if they’re sued, investigated, prosecuted or threatened with such actions because of their management of the company? Do you have protection for the company itself, reimbursing it for its costs of defending its directors and covering the company’s costs to defend itself?
A Directors & Officers Liability policy would provide this protection.
Does your business give advice or offer a professional service? If you’ve given the wrong advice, could you afford to pay a claim made against you for financial loss suffered by your client?
A Professional Indemnity policy would provide the cover to pay this type of claim.
- Sums insured and limits of indemnity
Buildings sums insured may be inadequate to reflect the rebuilding cost of the property. You should ensure that the sum insured is adequate in all cases as failure to insure for the correct sum could result in a claim being reduced or even, in extreme circumstances voided.
Liability insurance indemnity limits may not be adequate to cover a serious incident. You should consider your largest premises and/or contract and assess what a significant claim could cost in terms of damage and injury. In the current climate, limits of £1.0M or even £2.0M could be considered insufficient.
- Fire Risk Assessments
Those responsible for workplaces and other buildings to which the public have access can avoid fires by taking responsibility and adopting the right behaviours and procedures.
Employers (and/or building owners or occupiers) must carry out a fire safety risk assessment and keep it up to date. This shares the same approach as health and safety risk assessments and can be carried out either as part of an overall risk assessment or as a separate exercise.
- Duty of disclosure
Following the implementation of the Insurance Act 2015, we have a duty to make sure we have asked all questions that may affect the underwriting of the risk.
It is important to disclose not only details of bankruptcies, CCJ’s and criminal offences but also full details of the exact method and location of your business operations and details of any changes to your premises, particularly structural alterations.
We feel that our customers should carefully consider these matters and whilst our representatives will be in contact to talk about reviewing the insurances, if you do wish to discuss this further, please do not hesitate to contact us.
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