Liquidations and Non-disclosure – why does the past matter?

10th December 2018

First, a little definition – an insurance contract is based on the principle of ‘utmost good faith’ – that is, a person seeking insurance must disclose any information that would constitute a ‘material fact’ or  anything that would affect an insurer’s view of the hazard you pose in offering you cover. This can be both physical hazards (such as the construction of the building) but also moral hazards such as criminal convictions.

Non-disclosure of a material fact can lead an insurer to reduce or reject a claim payment, or even cancelling insurance overall.

One of the most common reasons we find insurers reject claims is through non-disclosure of previously liquidated companies or County Court Judgements (CCJs). This falls into the moral hazard category and is often overlooked when insurance is being arranged, as the impact of these aren’t directly obvious.

We have been asked before about why this matters – why should you be penalised for the mistakes of the past? Simply put, an insurance contract is a promise for you to pay your annual premiums in return for insurers to pay your claims. A previous liquidation or CCJ suggests you are a higher moral risk to insurers, and insurers prefer to take the moral high ground – without further information insurers will automatically assume the worst and believe you might renege on your side of the contract.

There are many legitimate reasons why a company may be liquidated, from changing market conditions and consumer demands (such as many high street chains have struggled with over the past few years), to bad debt from their own customers (see Carillion), to even companies never having traded and being closed off. The vast majority of liquidations can be readily explained, and insurers are more than happy to offer cover with a quick explanation of the past.

If you have had any liquidations or CCJs you must let your insurer or broker know to ensure insurers are aware of all the facts. ProAktive have excellent relationships with insurers and will be able to help.

By Sam Harby Dip CII – Commercial Account Handler

5 Health & Safety Christmas Myths

7th December 2018

Christmas is an interesting time for businesses. There are lots of temporary changes to work patterns, lots of parties (hopefully!) and most important of all, it’s the time of the year to dust off the decorations and make your office suitably festive. None of these things form part of your usual work activities and so you’ve probably not really thought of these things from a H&S perspective. Happily, a few years ago, the HSE published their “Twelve Myths of Christmas” and so we thought it would be a good time to revisit just a couple of the more relevant points that they raised.

(The full list is here http://www.hse.gov.uk/myth/xmasmyths.htm)

1. Workers are banned from putting up Christmas decorations in the office

We’ve heard this one a lot over the years. Workers are definitely not banned from putting up decorations; however as a responsible Employer it just means that you’ve got to be practical about how you do this. Essentially this means using the correct access equipment (step ladders are fine as this would be classed as short duration and infrequent), being careful with decorations near to sources of heat and ensuring that things such as lights are turned off when your premises are unoccupied.

2. Indoor Christmas lights need a portable appliance test (PAT) every year

This is a contentious one. We would suggest that if you have an in-house PAT testing facility, then this would be a good, practical, thing to do to ensure that the lights aren’t damaged. The HSE actually advise that as long as you are checking for obvious signs of damage and not using obviously faulty lights, then this would be okay.

3. You can’t throw sweets out at a Pantomime

It has been seen in the papers. This is a case where the original company involved was simply afraid of having to pay compensation if anyone got hurt and blamed H&S in order to get their way. Our opinion, and that of the HSE, is that it’s a case of “oh yes you can!” Obviously on the proviso that you don’t have someone like Steve Backley (famous javelin thrower for our younger readers) machine-gunning sweets at 100mph!

4. Carol singers are a health and safety risk

They might be a form of noise pollution to some but as long as you follow sensible precautions, such as not signing in the middle of the road or carrying large quantities of cash, then there’s little risk from a hearty rendition of “Jingle Bells”.

We’ve also heard talk of the necessity to apply for a permit to carol sing. Again, we’re not aware of any legal requirement to do this either! Feel free to belt out your favourites at the top of your voice!

5. You cannot clear snow and ice from pavements

We would encourage everyone to ensure that access to their premises is maintained throughout cold spells. It is incredibly unlikely that you’ll be held responsible if you’ve attempted to do the right thing by clearing a path and then someone slips. In fact, we’ve never seen anybody succeed with any claims of this nature in the past 10 years. There are a few tips though to do this successfully:

    • Do it early in the day.
    • Don’t use water as it might refreeze and turn to black ice.
    • Use salt if possible or ash and sand if you don’t have enough salt.
    • Pay extra attention when clearing steps and steep pathways. Add more salt if you can.

Remember to enjoy yourself!

Christmas is a time to have fun, not to be swamped by health and safety regulations. As long as you take a reasonable and practical method of planning whatever you’re wanting to do to get into the festive spirit, we’re sure that you will be fine!

By Ian Clayton CMIOSH – Health & Safety Manager

Is the Professional Indemnity tide turning?

29th November 2018

Over the last ten years Professional Indemnity premiums for the traditional and emerging professions have been pretty stable. This has also been the case for the ‘design and build’ construction sector. The market has been characterised by a benign claims climate and a ready supply of Insurers prepared to offer terms at generally competitive rates, even to businesses that had suffered claims. However, in the last 6 months there have been warnings that the market is turning and not for the better! 

The first signs of market change started to show with the solicitors Professional Indemnity Insurance season. This sector is unusual in that for the majority of the legal professions, Professional Indemnity falls due for renewal in October. During the Summer, a number of major insurers withdrew from the market, as a result of worsening claims and increased awards, and this caused something of a price shock. This situation was further exacerbated by the Grenfell Fire Disaster. Following the terrible events of July 2017 the investigation has started to raise questions about the professional advisers involved in the construction and refurbishment of the building. Queries have been raised in relation to professional standards and the duty of care owed by companies involved in the construction and related sectors and this has resulted in a number of significant notifications being made to insurers. As a corollary to this, a number of organisations have started retrospective reviews of their own property portfolios which has lead to an additional spate of insurance notifications against construction related professionals.

To say that this has destabilised insurers is something of an understatement. Premiums have increased, restrictive conditions are being applied and levels of cover that have previously been agreed have been reduced. Policies that previously applied a limit of indemnity per claim are now being limited to providing the limit of indemnity on an aggregate basis which may be in breach of contractual conditions or possibly collateral warranties.

With this background in mind it is essential that your Professional Indemnity cover is reviewed early and you ensure that you are speaking with a specialist broker, such as ProAktive, who can ensure that you receive the correct level of technical advice and support.

This cloud does have a silver lining in that cover for emerging professions is still widely available at sensible rates!

By Andy Morley – Group Managing Director

Terrorism Disruption Insurance

22nd November 2018

A traditional terrorism policy within the UK operates in the event of physical damage to premises as a result of a terrorist attack, targeting loss of life and creating fear and panic.

However, terrorism in the UK is evolving – The changing nature of more recent attacks can cause significant disruption to businesses located in the vicinity of an incident, even if the business has not been directly targeted in the attack.

This means businesses in the vicinity of such attacks will suffer, whether or not they incur physical damage, for the time the area is cordoned off by the police.

Denial of Access covers loss sustained during the period of time when access to your property is prevented. The trigger is physical damage and insurers commonly apply a radius to the impact area to include in the coverage. Policy extensions for aspects like Denial of Access following an act of terrorism are therefore important coverage to consider.

A broader form of Denial of Access Business Interruption cover is when there is no physical damage policy trigger but either a lock-down or a certified threat to a particular area occurs.

Meanwhile, Loss of Attraction may occur where there has been no direct damage to a business’ premises or where there has been no physical damage at all. A loss of turnover or revenue resulting from a physical loss to a property in the vicinity of the premises or as a result of a non-damage/threat type event can be significant. If there is a closure of an important landmark, airport, transport hub or of a particular place where large numbers of people come together (for example, a shopping mall, theme park or nightclub) a reduced number of visitors will result. Industries which are particularly exposed are retail, hospitality and leisure.

While terrorism can occur anytime and anywhere, any size of business can suffer, either directly or indirectly. Businesses located in large urban areas should be even more concerned.

The potential cost of future terrorist attacks is now every bit as great as the physical loss of buildings.

If you would like to discuss terrorism cover in more detail please speak to your usual contact at ProAktive.

By Sam Geddes Cert CII – Commercial Account Handler

Employment Tribunal Fees – Gone Forever?

19th November 2018

It has been no shock to those who work within the world of HR and Employment Law that following the quashing of employment tribunal fees in 2017, the amount of employment claims has seen a significant increase.

You might recall that in July 2013, the government introduced fees to try to reduce the burden on the tribunal system and to try to eliminate spurious claims. However, Unite successfully overturned this decision with a legal challenge going all the way to the Supreme Court and as a result the government were ordered to reverse the decision and reimburse those fees that had been paid by claimants.

We are now starting to hear the rumblings of a change in the system  and the permanent secretary at the Ministry of Justice (MOJ) has recently stated that the introduction of a new fee system is likely. A system that is progressive and that recognises an individual’s ability to pay.

If passed, this could help reduce malicious or unfounded employment tribunals from consuming valuable time and resources from an already strained tribunal system and also give employers some peace of mind that they wouldn’t face penalties when they have rightfully dismissed an employee and followed the correct procedures. 

It is worth noting that nothing has been confirmed officially and he does go on to say that there are no immediate plans to introduce one, therefore the current trend of rising levels of employment claims is likely to continue for the foreseeable future. In fact the MOJ have recently launched a recruitment drive, to bring in 54 judges to help clear the backlog of cases that are stacking up.

The reality is that although this isn’t the last we will hear about tribunal fees, we may find that the changes are only implemented alongside a re-haul or reworking of the tribunal system as a whole and the likelihood of this happening in the near future is slim.

With that in mind, there are some practical things that companies can do, including offering the right of appeal in all cases of dismissal, which can help decrease the likelihood of facing an employment tribunal and ensure that they are following the ACAS code of conduct when it comes to their disciplinary procedures. Ultimately, taking professional advice when can help work out the best way to deal with things and reduce the risks from employment claims.

Here at ProAktive we have seen first hand how our clients are receiving unprecedented levels of ACAS contact and therefore if you have any employment queries please don’t hesitate to contact our HR Consultancy Team on 01302 341 344.

Winter is coming

15th November 2018

We know Winter generally hits the North the hardest, but it doesn’t matter if you operate in the north or the south, we all can be affected.

Extremes of snow, ice and longer periods of darkness make driving in the Winter months more hazardous than in other times of the year.

PLAN YOUR JOURNEY 

Regularly check local and national weather broadcasts for the areas you intend to travel through. Avoid driving completely, unless you absolutely must make the journey and driving is the only option.

If you do decide to travel, let someone know where you are going and what time you hope to arrive.

YOUR VEHICLE 

Ensure your vehicle is fit for winter conditions. Pay particular attention to the vehicle tyres (tread depth and pressure). Also ensure that the windscreen and windows are clean, wiper blades are in good condition and screen wash is topped up and complete with antifreeze. Also keep the fuel tank topped up as journeys may take significantly longer.

DRIVING 

Normal speed limits are generally too fast for snow and ice conditions.

Excessive braking, acceleration, speed and steering will cause the car to slide, skid and spin.

  • Don’t brake on bends, slowdown before the bend or corner by getting into a low gear early and allow the speed to reduce slowly.
  • When braking, get into a low gear early and allow the speed to reduce slowly and use the brakes gently.
  • Keep a greater distance from the vehicle in front (up to ten times greater than normal) to allow time for smoother braking and steering.
  • Accelerate gently

EXTRA KIT

A few extra items of kit in your car may help you escape the snow that is stopping you proceeding. Consider a shovel, snow socks / snow chains, tow rope, de-icing equipment and a torch.

Have an emergency kit in your car to help in situations where you can’t proceed. Consider a first aid kit, warm clothes / sleeping bag / car blanket, hazard warning triangle, emergency rations and a flask with a hot drink. Remember to stay in the vehicle but turn the engine off to prevent a build-up of fumes and conserve fuel.

SUMMONING HELP

Remember to keep your mobile phone fully charged to let people know where you are and to call breakdown services or the emergency services so that they can come and help you.

ADVICE

As business owners, it’s worthwhile having the above conversation with your staff to help keep them safe as they travel to and from work. How often do you check the condition of your fleet?

By Ian French CMIOSH – Risk Consultant 

Mental Health in the workplace

25th October 2018

Wednesday 10th October marked World Mental Health Day and this year there is a focus on young people and mental health in a changing world. Mental wellbeing remains at the forefront of the current challenges we face as a society and therefore as businesses.

The ‘Mental Health at Work’ Gateway, headed by the Duke of Cambridge, has recently been launched, where the charity MIND released the following statistics:

  • Only 2% of people would talk to HR about their mental health
  • 25% of people with mental health issues are left to cope in silence

At the Gateway event, two main factors were discussed to change culture when it comes to mental health in the workplace:

  1. Stop people feeling as if they have to hide.
  2. Make sure anyone with responsibility for others at work, knows what to do.

With this in mind, ACAS have produced a framework for positive mental health at work which outlines the responsibilities of Employers, Managers and Employees.

Employers should understand that it is their responsibility to:

  • Lead and embed a wellbeing strategy
  • Reduce stigma in the workplace
  • Tackle the causes of workplace stress
  • Support and train managers
  • Understand the impact personal issues can have on mental wellbeing

Managers need to be able to:

  • Build rapport with staff
  • Plan work with ‘people’ in mind
  • Handle difficult conversations effectively
  • Support work-life balance
  • Have confidence and knowledge in managing mental health

Finally, Employees should be able to:

  • Look after their own wellbeing
  • Use positive coping strategies
  • Identify personal stress triggers
  • Engage with their line managers
  • Take notice and support their colleagues

Ultimately the goal of the framework is to help businesses create an environment where employees feel safe to discuss any mental health issues without fear of prejudice or judgement. By following the framework, employees and managers alike can become more comfortable with discussing mental health openly and making adjustments – just like they would with a physical illness or disability.

By Jodi Cooling – Operations Director and HR Consultant

Are your staff insured to drive their own vehicle?

22nd October 2018

Driving can be one of the most dangerous work activities that people can do. Research indicates that over 100 people are killed or seriously injured every week in crashes involving someone who is driving for work purposes. As an employer, you owe the same duty of care under Health & Safety Law to your staff that drive their own vehicles for work (often referred to as ‘Grey Fleet’) as you do to employees who drive company vehicles.

When was the last time you reviewed your Grey Fleet? 

A few things to consider:

  • you need a system in place to make sure that your employees understand that they are not allowed to use their own vehicle for either business use or occasional business use, e.g. going to the bank / Post Office etc, unless they have supplied a copy of their driving licence & insurance schedule confirming that their policy includes ‘business use on behalf of their employer’.
  • it is an offence to allow an employee to drive a vehicle that is in a dangerous condition for business purposes. Are you checking this?  It’s relatively straight forward to monitor company vehicles but it is much harder when a vehicle is owned by an employee.
  • conduct regular driving licence checks on all staff that drive for work; is their licence still valid? Have they received any points in the last 6, 12, 18 months?

Employees may believe that as their personal motor insurance provides cover for commuting to their usual place of work that it will them allow them to drive to multiple locations whilst at work.  This is not the case as personal motor insurance policies only provide cover for one permanent place of work. If an employee visits multiple locations, their policy needs to be extended to include business use. If the policy is not extended there will be no cover in place in the event of an accident.

How many of your employees are driving their vehicle without adequate insurance?

By Helen Parsons – Commercial Broking Manager

“Work alone is noble.” But is it safe?

27th September 2018

Many employees often find themselves the only one left in the office at the end of a busy day or driving to see a customer alone. If this situation sounds familiar it is likely that your employees are lone working. If your employees work alone you are required to consider, and then deal with, any health and safety risks that this exposes them to.

It will often be safe to work alone. However, the law requires employers to think about and deal with any health and safety risks before people are allowed to do so.

Things you could consider to help ensure lone workers are not put at risk include:

  • assessing areas of risk including violence, manual handling, the medical suitability of the individual to work alone and whether the workplace itself presents a risk to them
  • requirements for training, levels of experience and how best to monitor and supervise them
  • making sure you know what is happening, including having systems in place to keep in touch with them

What types of job might require people to work alone? 

  • Working alone in a small workshop, petrol station, kiosk or shop
  • People working on their own outside normal hours, e.g. cleaners and security, maintenance or repair staff
  • Agricultural workers
  • Service workers, including postal staff, social and medical workers, engineers, estate agents, and sales or service representatives visiting domestic and commercial premises
  • Driving on company business

So what should you be doing?

Employers have a duty to assess risks to lone workers and take steps to avoid or control risks where necessary. This must include:

  • Involving workers when considering potential risks and measures to control them. Many companies trust their employees and don’t want to appear as though they are checking up on them, however, if something happened how would you know?
  • Taking steps to ensure risks are removed where possible, or putting in place control measures, e.g. carefully selecting work equipment to ensure the worker is able to perform the required tasks safely.
  • Instruction, training and supervision. It is important that all employees understand the procedures in place for lone working that have been designed to keep them safe. For example, calling to check in every so often or locking the office door when staying late.
  • Reviewing risk assessments periodically or when there has been a significant change in working practice.
  • Being aware that some tasks may be too difficult or dangerous to be carried out by an unaccompanied worker, for example, working in confined spaces.
  • Where a lone worker is working at another employer’s workplace, assessing the additional risks involved and making sure your employee will be safe in that situation. For example, social workers or an engineer visiting a person’s home.
  • When a risk assessment shows it is not possible for the work to be conducted safely by a lone worker, addressing that risk by making arrangements to provide help or back-up. Risk assessment should help employers decide on the right level of supervision.

What happens if a person becomes ill, has an accident, or there is an emergency?

Your assessment of the risks should identify foreseeable events. Emergency procedures should be established and employees trained in them. For example, it may be decided that mobile workers should carry mobile phones, personal alarms or first-aid kits.

If you’re concerned about your lone workers and need some advice, contact ProAktive on 01302 341 344.

By Rachel Cuff CMIOSH – Risk Consultant

Motor Claims Made Easy

25th September 2018

Did you know that the longer it takes to notify a claim to your insurers, the higher the cost of that claim?

At ProAktive, we recognise the implications of late notification on the premiums you pay and have therefore launched our very own motor claims app. The app enables drivers to collect crucial information at the scene of an accident and notify us and you of the incident immediately. 

This will not only have a direct impact on the cost of your claims but it will make the claims process easier and smoother, giving your drivers a guide in a moment of potential uncertainty and stress.

The cost of fault claims can quickly escalate, this is illustrated in the table below, which is based on statistics provided by Allianz Insurance.

Day claim was notified Third party vehicle repair cost Third party hire charges Third party personal injury Total claim cost
Day 1 £1,500 £500 £3,000 £5,000
Day 5 £1,800 £1,700 £4,000 £7,500
Day 15 £2,600 £2,400 £6,500 £11,500
Day 30 £4,000 £7,500 £8,500 £20,000

 

The cost of these claims has a direct impact on your premiums. You can see from the above, that even if you only have a couple of fault claims a year, the cost could exceed £40,000 for relatively small incidents.

Our App will reduce paperwork and reduce the time that you spend on completing lengthy forms.

The advantages are:

  • No need for claim forms
  • Easy app-driven process for drivers
  • Faster incident reporting to ProAktive
  • Captures third party information
  • Records police & witness information
  • Accurate GPS, date and time automatically uploaded
  • Assists with reducing third party injury claims
  • Photographs can be easily uploaded to capture crucial evidence
  • Reduces the cost of third party hire charges
  • Recording information at the scene can prove more powerful when defending claims
  • No more old fashioned cab packs

Following the incident a full pdf report is emailed to the ProAktive Claims Team, who will then liaise with you regarding the reporting of the incident to insurers. We appreciate not all accidents involve a third party or require your insurers involvement, and therefore, we will always agree with you the appropriate course of action before speaking with insurers. The reports do not automatically submit to insurers meaning that you still control the process.

The app is easy to download and is compatible with both Android and iPhones. We can provide full training on the app to both you and your drivers.

For help in reducing your claims costs, please get in touch with your ProAktive contact who will be happy to arrange a demonstration.

Don’t ignore a claim – the sooner an accident is reported, the lower the claim costs, the better the result!

By Leah Kendall – Account Executive