Product Recall

We have all heard about the problems suffered by Toyota resulting in the recall of thousands of vehicles and of course a huge cost to the Company. But this does not just affect Toyota and other large manufacturers. The European Union’s General Product Safety Directive enacted in the UK in 2005 increases the need for businesses to be able to identify and, if necessary on safety grounds, recall their products from the market. Many manufacturers may think they are covered for such an eventuality through their traditional products liability insurance but generally this only covers the consequences of injury or damage caused by the products and will not insure against the cost of any necessary product recall.

The rate of recalls is rising. In the EU during 2009 notifications of recalls rose by 53% and therefore anyone involved in manufacturing needs to have plans in place. The most effective method of reducing the negative impact of a product recall is to be well aware of how your business may be affected and be prepared.

At Castlemead Insurance Brokers, we are experts in providing the individual level of cover your business needs and we can also help you prepare for the unexpected.

Warranties are on the increase

At Castlemead Insurance Brokers in Bristol, we like to keep a close eye on what is happening in the insurance industry so that we can be sure our customers are adequately covered for any eventuality.

Sometimes businesses can get caught out when making a claim simply because they have not read or fully understood the terms and conditions or small print attached to their policy.

We have become very aware in recent times that insurers are becoming ever more stringent in applying the various warranties contained therein. These warranties, largely health and safety or security based can invalidate cover even if they have no direct relationship to the claim being made.

For instance, we have learned of a claim being rejected because the insurer had stated that Kite marked 5 lever locks must be fitted to all doors. 5 lever locks had been fitted but they were not Kite marked. The break in to which the claim related was not even through a door!

Had their insurance broker pointed this out when arranging the cover the outcome would have been very different?

Need help with your business insurance? Get in touch with Castlemead.

Managing risk in a downturn

The current economic climate has taken its toll on many businesses, with survival requiring careful examination of all costs in the business: Insurance should not be exempt from this process. Insurance rates are currently static, but there will be pressure for rates to rise over the coming months.

So how does a business control spending with these pressures?

The obvious measures are those that should be considered as part of your regular renewal review.

Ensure figures on which the premium is based reflect your projected level of business activity. Consider 90% estimates if unsure. Many premiums are now ‘minimum and deposit’ – remember to budget for declarations if you do well.

Understand the cover you are paying for. If unsure Castlemead Insurance Brokers in Bristol, can review and check it reflects the needs of your business.

Understand how much each part of your Combined insurance costs by obtaining a premium split per section for :-

• Liability
• Material Damage
• Business Interruption

Castlemead Insurance Brokers will go the extra mile

• We will ‘find a way or make one’ by devising alternative methods of buying cover that can offer savings.
• Consider higher levels of self insurance. We can help calculate how big a loss your business can sustain as a one off and in attritional damage over the year.
• Avoid making small claims as these are always catered for in the premiums charged. Take an excess and enjoy the saving (In Insurance Premium tax alone).
• Ask for a list of insurers that your Broker has approached this year – this should represent a spread of the market including specialist underwriters and London markets, as well as ‘household names’.

If in doubt Castlemead are here to help.