Time for a re-think on terrorism?

Insurers of property, machinery, stock and the like in the UK do not provide cover for damage caused by acts of terrorism. This is perhaps not surprising. Insurers have taken the view that losses from terrorism could be so substantial as to threaten their financial stability.

In many countries losses caused by terrorism may be compensated by the government. This is not so in the UK. The risk is yours and yours alone. The attitude of the UK government stems from the days when IRA terrorism was at its worst. The government of the day took the view that it didn’t really want to give the IRA an incentive to bomb major targets in the knowledge that it would be the government who would foot the bill.

As a result of this attitude, the government and insurers  got together to form ‘Pool Re’. Pool Re is an insurer, funded by insurers, who operate in the UK and ultimately are “reinsured” by the government. Its sole purpose is to provide terrorism cover in the UK and indeed it has done so successfully for many years now. Your business may choose to buy bespoke terrorism cover that can cover liability too.

Many of our clients already buy Pool Re. Certainly those who own key assets in major cities do and banks often insist on cover before lending on a property. But if you don’t have cover, is it time for a re-think?

We used to think of terrorism in terms of IRA bombs. In recent times the threat has evolved from ISIS or ISIS inspired individuals. Whilst acts of terrorism are extremely rare they are on the increase and of course the consequences of an attack can be substantial. Rather than leave your assets exposed perhaps it is time to buy cover? Premiums reflect risk and so locations within major cities and major attractions and events will attract higher premiums than those ‘in the sticks’. Sadly the problem is not a short term issue; David Cameroon spoke recently about the problem being with us for a generation.

Help is at hand. Just ask.

By Ian Laycock – Group CEO


To Suspend or Not To Suspend

Most companies will have a section in their handbook that explains the company’s right to suspend an employee when carrying out an investigation into alleged misconduct. However, the recent case of Agoreyo v London Borough of Lambeth shows why it is important to think carefully before issuing a suspension, whatever the allegation.

Ms Agoreyo, a teacher, was accused of three instances of using unreasonable force towards two children in her class, who were known to exhibit challenging behaviour. The Head Teacher investigated at least two of the allegations and the allegations weren’t upheld. Agoreyo was however, then suspended by the executive head. 

Agoreyo received a letter stating that the suspension was a ‘neutral act’ and not a disciplinary sanction. It also indicated that the purpose of the suspension was to allow an investigation to be conducted fairly.

A claim was brought before the county court for damages for breach of contract, arguing that, in suspending Agoreyo, the council had breached the implied term of mutual trust and confidence. Although the claim was initially unsuccessful, Agoreyo won her case on appeal and the High Court made the following criticisms of the council’s handling of the case:

  • Agoreyo was not asked for her version of events before suspension.
  • The head teacher’s initial investigation, which concluded that unreasonable force wasn’t used, was overlooked.
  • No alternatives to suspension were considered.
  • No explanation was given as to why an investigation could not be carried out fairly without Agoreyo being suspended.

As a result, the High Court held that Agoreyo’s suspension was unnecessary and therefore breached the implied term of mutual trust and confidence. It confirmed the view expressed in previous cases that suspension is not a neutral act and should not be considered a ‘routine response’ to the need to investigate.

What to Learn from this case?

In light of this case, employers should think carefully before suspension, and not use it routinely when it comes to a disciplinary procedure. Employees can mitigate this risk by ensuring the following points are considered in deciding whether or not suspension is necessary:

  • Would the employee’s presence impede an investigation?
  • Is there a risk of the employee interfering with witnesses or evidence?
  • Is there a risk to the safety of other staff, customers, suppliers or service users?
  • Are there suitable alternatives?
  • Is suspension reasonable in the circumstances?

There will still be cases where suspension is necessary however, employers should exercise caution to ensure that it is not the routine, but when used must be a necessary part of that particular disciplinary procedure.

Employers can also minimise risk by ensuring the letter of suspension explains why it is necessary, so it is clear that the decision has been carefully thought through. It is no longer acceptable to state that the suspension implies no criticism of the employee.

To talk to our HR Consultancy Team about your disciplinary procedures or about any other employment issues, please contact us on 01302 341 344.

By Kris Kerins BSc (Hons) PGC (Tech Mgmt) – Risk Services Adviser


E-cigarettes – what rules do you have in place?

In 2007 the smoking ban was implemented across the UK; businesses and the public alike have embraced the changes over the last 10 years.  The e-cigarette was created back in 2003 however their popularity and the trend of ‘vaping’ have seemingly hit a peak in the last couple of years. Whilst it is an alternative to smoking and often used as a method to stop smoking, it is important to recognise that the e-cigarette is not covered by the ban.

There are factors to consider when making the decision whether or not to allow employees to use e-cigarettes on your premises.

  • Will customers’ perceptions of your company be altered if they see your employees using them?
  • Role models – young people who see smoking, including e-cigarettes, can mistakenly believe this to be a normal healthy adult activity and this may influence them to smoke themselves.
  • Will employees be distracted by the e-cigarette and could this be dangerous when driving or operating machinery? 

Ultimately the decision on whether or not to ban e-cigarettes from your premises is up to you. Guidance is available from organisations such as ASH (Action of Smoking and Health) and the HSE, although the HSE does not enforce legislation or standards for e-cigarettes. You need to weigh up the positives of encouraging employees to cut down or stop smoking to benefit their health and the negatives of their use in the workplace.

To speak to us about e-cigarettes or any other Health & Safety queries, contact our team on 01302 341 344. 

By Kris Kerins BSc (Hons) PGC (Tech Mgmt)Risk Services Adviser


Voluntary Overtime and Holiday Implications

Earlier this month the Employment Appeal Tribunal (EAT) heard a case that will affect thousands of employers when it comes to calculating holiday pay.

The case in question was: Dudley Metropolitan Borough Council v Willetts (and others)

56 employees brought a joint claim against the council in respect of voluntary overtime not being included in their holiday pay, which they claimed was against the Working Time Regulations 1988. These employees worked set hours per week which constituted their normal working hours however, once every 4 or 5 weeks they participated in a call-out register and worked voluntary hours. 

Their claim was successful as the tribunal didn’t consider the overtime to be ad hoc or irregular; which is still excluded from holiday pay, but instead would form part of their normal working hours. The EAT specified that overtime that ‘extends for a sufficient period of time on a regular and/or recurring basis’ and has become part of the worker’s normal pay must be included [in holiday pay]. This also means that regular overtime worked at certain times of the year, for example over the festive period should be taken into account for holiday pay.

There isn’t a statutory definition of ‘normal pay’ and what amounts to it, however this case will be binding on employment tribunals. Therefore employers may have to provide a satisfactory argument as to why any overtime undertaken by their employees isn’t considered part of their normal pay, in order to have a tribunal decision awarded in their favour.

If you are concerned whether or not the overtime worked by your employees should be considered as part of their normal pay, or for advice on any other employment matters, please contact the employment team on 01302 341 344.

By Kris Kerins BSc (Hons) PGC (Tech Mgmt) – Risk Services Adviser


Kidnap and Ransom – A dangerous world

Kidnap and Ransom cover is designed to protect individuals and corporations operating in high-risk areas around the world. Locations most often susceptible to Kidnap and Ransom incidents include Mexico, Venezuela, Haiti, Nigeria, Somalia, Brazil, India and Central Asia (Afghanistan and Iraq).

In practice, generally speaking, a crisis management helpline is also provided by the insurer as part of the service. This provides access to specialist response consultants to provide support in the event on an incident.

Typically, the insured would initially pay the ransom and then look to seek reimbursement under the policy.

So, what is covered?

  • Kidnap and Ransom– Seizing an employee with the intent to demand money in return for the employee
  • Extortion – Demanding money with the threat to injure or kill an employee, damage property, divulge trade secrets or spread a computer virus
  • Wrongful detention– Confining an employee under the guise of government
  • Hijacking – Holding an employee for an extended period of time against his/her will on an aircraft, motor vehicle or ship.

You should know…

The existence of Kidnap and Ransom insurance cover is highly confidential; there are clear conditions in the policy that require the insured company to take reasonable steps to restrict knowledge of the insurance as far as possible i.e. only key personnel to be aware of its existence. The employees travelling should not have any knowledge that the cover is in force, as this could result in the individual revealing to potential captors that they are insured.

Facts & figures

There are 15,000-20,000 kidnappings reported globally each year, with many more going unreported. A kidnapping is not only traumatic, but it can lead to significant financial losses from ransom payments, associated costs, business interruption, litigation, adverse publicity and long-term reputation damage.

If you are unsure as to whether the territories you operate in are high risk of Kidnap and Ransom activities, you can check this on the Foreign & Commonwealth Office website: If you require any further information or advice you can contact us on 01302 341 344 or 0114 243 9914.

By Lauren Quincey ACII – Chartered Insurance Broker



Supreme Team Scrap Tribunal Fee Dream

In what is being called a dramatic ruling, The Supreme Court have ruled in favour of Unison, against the Government, agreeing that tribunal fees are unlawful and must be scrapped. On the back of this those that have paid to bring a case to tribunal since July 2013 will be refunded.

The Supreme Court judges decided that the fees were preventing access to Justice and indirectly discriminatory towards women, who were more likely to bring serious and costly cases to court and therefore this contravened EU Law. 

Although originally the fees were implemented to deter false claims, reduce costs to taxpayers and prevent a backlog in the system, many groups have fought against the fees claiming it would allow employers to mistreat their employees with less fear of repercussions. This was especially a concern for employers who employed minimum wage and/or part-time employees.

Looking Forward:

Going forward it is likely that the amount of claims brought to tribunal will increase, however some experts believe that employers may now be more inclined to settle these matters during ACAS conciliation or before tribunal.

Estimates place the refunds to be in the region of £27 million and many people believe that the government will look to try and get a parliamentary act through to change the system again rather than use the secondary legislation route which they used originally. BUT based on the current political environment, and with the labour and liberal democratic parties being against the fees, it is unlikely that this would pass through parliament.

As there are fewer barriers for employees to bring a claim against an employer once again, it is vital that employers act fairly and follow the ACAS code of conduct when it comes to the treatment of their employees and the procedures they follow.

To contact us regarding any HR concerns you may have please get in touch on 01302 341344.

By Kris Kerins Cert CII– Risk Services Adviser


Will your plant still be on site in the morning?

Theft and arson on construction sites are two significant reasons why insurance costs are rising. These sites are an easy target for thieves as the lure of high value plant & equipment makes it easy for them to make a quick profit. Plant security is a difficult area to get right as thieves are well versed in both stealing and disposing of plant and equipment with over £ 1,000,000 worth being stolen every week in the UK and with less than 10 % being recovered. 

It is not uncommon to find items of plant and equipment, without any form of security, being left vulnerable to theft overnight on open contract sites just waiting to be stolen. 

Our suggestions on how to protect such items are:

  • Use physical security and on-site security measures to help prevent the loss from occurring in the first place
  • Fit security devices to the plant and equipment to improve the chance of the item being recovered
  • To remove the keys when not in use and for these to be locked away out of hours. Keys for the plant and equipment tend to be on the basis that a common key fits all, so it is important to do this.
  • To have effective marking on the plant and  machinery to confirm ownership

In view of the inherent losses, Insurers are now looking for ‘minimum security’ to be implemented on construction and contract sites with warranties/conditions to this effect. These warranties/conditions will still apply if a Sub Contractors plant and equipment is stolen, even if he has no control over the site security.

At ProAktive we are advising policyholders of their responsibilities for security of their plant and machinery to ensure that if a claim occurs they have complied with their Insurers requirements and the claim will be paid. If you would like any further information, please feel free to contact us on either 01302 341 344 or 0114 2439914.

By Martin Singleton Dip CII – Account Executive


The Taylor Review: A Quick Summary

Last week the Government released the findings of the ‘Taylor Review’, which looked at working practices of the modern economy in the UK.

The review was instigated to review all the various aspects of the current modern working world and review how employment legislation and practices are coping with this evolution.

The review was tasked with putting in place a Strategy to provide ‘good work’ for all. Their definition of good work encompasses the following:

  • Fair wages
  • Education and Training
  • Working Conditions
  • Flexibility
  • Work Life Balance
  • Collective representation

The review also suggested that everyone should enjoy basic protections and be allowed to progress.

A large part of the review surrounds the recent controversies and ambiguities arising from what has become known as ‘the gig economy’. Recent cases have seen companies such as Deliveroo and Uber defending themselves in respect of cases which have been brought by their workforce, with the key questions relating to the status of that ‘workforce’ and the protections and entitlements they should be afforded.

The review concludes that those workers operating within platform-based companies such as those described above, should be classed as ‘dependent contractors’, rather than ‘workers’ or ‘self-employed’.  The review recommends that there should be a new test for what defines a ‘dependent contractor’ hinging on the level of control that the contractor has on the services they are providing.

On a positive note for business and the economy, the review recognised the benefit of the gig economy for most workers, which allows greater flexibility than other forms of employment. However, it did determine that that clearer distinctions should be made between dependent contractors (such as those working for platform companies) and legitimately self-employed persons.

The report also calls for the Government to put strategies in place that allow those who currently earn the National Living Wage, to progress in the workplace, earn more and not be stuck on this base level of pay for the long term.

IMPORTANT AREA TO NOTE: At the moment failure to issue a written statement of terms; which could be a contract, can only lead to an award of compensation when included as part of another tribunal claim i.e. unfair dismissal or discrimination. Going forward the report recommends that there should be a stand alone right for individuals to make a claim in the employment tribunal for failure to issue a written statement.

Since the report is only there to make recommendations, there is likely to be a debate at a Government level as to what changes it will be implemented……. so we will continue to keep an eye on developments and keep you updated.

To read the Taylor Report in full: Click here

To speak to us about any potential impact in your business or any other employment matters please contact on our HR Consultancy Team on 01302 341 344.

By Kris Kerins Cert CII – Risk Services Adviser


HSE following through on strategy

At the beginning of the year we wrote a blog outlining the HSE’s strategy for 2017. The majority of that article focused on how the HSE were focusing on the health of employees, including Occupational Stress and Health, Musculoskeletal Disorders and Occupational Lung Disease.

We are now starting to see some serious fines being delivered to companies who fail to adhere to the HSE standards specifically when it comes to the above priorities. 

In May, Barroerock Construction Limited were fined £750,000 and ordered to pay additional costs of £14,874.68 after pleading guilty to two offences of breaching regulations when it came to the management of Asbestos substances during construction.

More recently on the 11th July an engineering firm was fined for failing to control the risk to employees using hand held power tools from Hand-Arm Vibration Syndrome (HAVS). The company pleaded guilty to breaching the Regulations 6(1) and 8(1) of the Control of Vibration at Work Regulations 2005.

This company was found responsible for injuries to an experienced worker and a 20 year old apprentice by failing to control the risks associated with vibration. The HSE inspector said “The Company also failed to ensure workers were looked after when symptoms did arise leading to further exposure. This was wholly inadequate, and led to two employees suffering significant health effects”. The fines for these breaches came to £120,000 and ordered to pay £7,241.

It’s also important to remember there will be additional costs on top of this due to damaged reputation, replacing injured workers and liability claims, leading to increased insurance premiums.

If you would like any more information on managing these risks or any other Health & Safety topics please contact our team on 01302 341 344.

By Ian Clayton CMIOSH – Health & Safety Manager


Business Interruption – It’s not just your own premises you need to worry about!

As you may know, the intention of Business Interruption cover is to put your business back into the trading position it enjoyed before a loss (fire, flood , storm etc.) once the damage has been repaired & the business is back up & running. This can take many months, if not years, & it is important therefore to have an indemnity period (the length of time over which your cover will operate) that will allow the business to fully recover its trading position to its pre-loss level.

However, losses that directly affect your premises are not the whole story. Your business can be affected by losses that occur elsewhere, which you can also insure. Here are just a few to think about:

  • Losses at customers’ or suppliers’ premises

If you are dependent on a particular customer or supplier, whether in the UK or overseas, a loss at their premises could have a significant impact on your ability to trade. Cover is available on a specified or non-specified basis for customers & suppliers.

  • Failure of supply – e.g. gas, electricity, telecommunications

A failure of power to your business will significantly affect your ability to produce goods or otherwise continue to trade. Cover is available for losses that arise from losses at the supply undertaking’s premises or on a wider basis for anything that affects supply to the terminal ends at the point of entry to your premises.

  • Denial of access

If property is damaged in the vicinity of your premises it could have a significant impact in preventing or hindering the use of or access to your premises.

  • Loss of attraction

If property within the vicinity of your premises suffers a loss it may result in a diminished attraction to customers that would have otherwise visited the area & your business. This is particularly applicable to retailers who may benefit from footfall due to a big name store being nearby.

  • Act of competent authority (e.g. bomb threat)

Cover is available for denial of access to your premises even when there is no physical damage to any property – for example if the police close the roads due to a bomb threat or other incident in the area

  • Loss at a location where your property is stored

Cover is available to indemnify you if you suffer a loss of profit following a loss at a third party premises where your property is being stored

  • Loss at a contract site

If a significant proportion of your turnover is derived from a particular site, cover is available to protect your income from a loss at that site

  • Loss in transit

Cover is also available for loss of profit following damage to property in transit

It is important that you consider the impact of any/all of these scenarios when deciding on the right business interruption cover for your business. We at ProAktive can help you review your existing cover & make sure it meets the needs of your business. Please contact a member of the team if you wish to discuss in more detail.

By Beverley Brown FCII MBA – Broking Director & Chartered Insurance Broker