Clive Gamlin represents Team GB at IPSC Shotgun Worlds

It’s great to be back at work after an intense six days competing for Team GB in the IPSC Shotgun World Championship III in Chateauroux, France. The championships are held every 3 years and consist of 30 stages over 6 days and competition was fierce, with the best of the worlds’ competitors from 40 Countries taking part. The facilities in France were amazing and the weather stayed dry for the most part.


Team GB did brilliantly, with individual medals for Josh Kenny Bronze in Standard and Iain Guy Bronze in Standard Manual Senior. Team GB also won an amazing four team medals; Silver Standard Manual Senior Team, Bronze Standard Team, Bronze Open Team and Bronze Ladies Standard Team.


It was a wonderful experience, catching up with old friends and making new ones.  I am so proud to have represented by country, but it was also a great source of pride that my son Christopher was also in Team GB coming 32nd overall in Standard Division out of 230 competitors.  My only sight disappointment was that my team, Senior Standard, narrowly missed out on a bronze medal (by a hair’s breadth of 30 points - out of over 4,500!) Still, it’s spurred me on for the next one in 2021!

I would like to thank Castlemead Insurance Brokers for sponsoring Chris and I and the UKPSA would like to thank Team GB sponsors:

• Carlisle Small Arms Club
• Worcester Norton Shooting Club
• HTRPC
• Aimpoint
• Eley Hawk
• Magload
• Brownells UK
• Shield Sights
• High Speed Gear
• Chosen Tactical
• Lasting Classics
• Master Class Custom Guns
• Practical Shooting Supplies
• 5.11 Tactical
• Teague Precision Chokes

Why it’s so important to work with an independent insurance broker for your commercial insurance

Firstly, let’s qualify what we mean by ‘independent’. There has been considerable consolidation within our sector over recent years with larger brokers buying smaller brokers and insurers acquiring brokers. An independent insurance broker is one which is not owned or part-owned by an insurer or another broker.

The key benefit of working with an independent broker is that they can scour the whole market for the right insurance cover for your business. They are not tied to a panel of insurers and can act independently on your behalf.

Added-value

They will have an in-depth knowledge of the nuances in policy wording for each insurer and be able to advise you on the best cover for your business. Because they are not under pressure to place more business with one insurer over another, an independent will be able to give you a practical view on exactly what you are getting for your premium. They will also advise on what action you need to take to ensure you comply with the policy wording.

Help when you need it most

An independent broker will have experience of dealing with most insurers and will be well placed to advise on how best to manage the claim if you ever need to. A good one will work with you to put the claim together and be present with you at any insurer visits.

Due diligence

An independent broker will act on your behalf without the pressure of commercial arrangements.  You need to work with a broker who only ever places cover with financially stable insurance companies. Afterall, if you ever need to make a claim, you need to ensure your insurer is in a position to settle the claim when you need them to. 

Proud to sponsor the Best Hotel Group category at the Best Loved Hotels Awards

Our Director, Clive Gamlin attended the Best Loved Hotel Awards this week at Tewkesbury Park Hotel to present the award for the Best Hotel Group winner. 

It was a fantastic evening and many congratulations to the Devonshire Hotel and Restaurants Group for their well-deserved win.

Best Loved Hotel Awards are designed to celebrate and showcase excellence across Best Loved properties throughout Britain and Ireland. As we look after the insurance for many clients in this sector, we know just how much hard work goes into delivering the very best customer experience for guests.

Congratulations to all the winners and nominees, it was an honour to be there and to sponsor the Best Hotel Group category. 

Beware the danger of assumptions. Why you need to be clear on your commercial insurance cover.

We all know the phrase ‘assume’ makes an ‘ass out of u and me’. When securing commercial insurance cover, it often happens that cover is arranged based on certain assumptions by you, your insurer and your broker.

Your broker will assume:

• -          you’ve given full disclosure
• -          you will read the policy documentation
• -          you will comply with all the terms of your insurance policy

The insurer assumes:

• -          you comply with all regulations
• -          your premises are secure and your alarms, lock and electrics are all British Standard.
• -          All plant, machinery and buildings are maintained and in a good state of repair.

As the client, you naturally assume that your broker has done all that is necessary to ensure that you have the right commercial insurance cover for your business. However, it’s important that you understand what your broker has recommended and why. Afterall, if something goes wrong and you need to make a claim, you do not want any nasty surprises.

So how do you ensure you have the right level of commercial insurance?

• -          Make sure your broker has taken the time to visit your business premises and identify the risks.
• -          When your broker comes back with a quote, make sure he or she takes the time to explain exactly what is covered and why.
• -         Remember, there are no stupid questions. The only stupid ones are the ones you didn’t ask. Ask your broker to explain the documentation to you. It’s important you understand exactly what you are covered for and what you are not.
• -          Be realistic on price, cheap insurance, generally means cheap cover. You need to work with your broker to understand what is worth paying for to ensure full protection and what you might be willing to compromise on.

If your broker hasn’t visited you or walked you through your policy documentation, it is highly likely that there have been assumptions made. And the last thing you want is to find out these assumptions are wrong when it comes to making a claim.

If you have any concerns about your commercial insurance, please speak to the Castlemead team.

Underinsurance, what is it and what could it mean for your business?

As a commercial insurance broker, we arrange insurance for clients in many sectors. When reviewing client’s insurance cover for the first time, we often find they are underinsured.  This post will help you understand what this is and what it means for your business.

What is underinsurance?

This is when the sum insured for your plant, machinery, buildings etc is inadequate. 

For example, the reinstatement value of your buildings is £400k but they are insured for £200k. Now imagine there has been damage to the tune of £100k and you now need to put a claim in for that amount to make the necessary repairs. The insurer will reduce the claim by 50% because you are underinsured by 50%. This is known as the average clause and it applies to almost all insurance policies.

In this scenario, you will have to find the other £50k to make the repairs. If you do not have access to this sum, you run the risk of impacting the day to day running of your business because you can’t make the repairs straight away. Even if you do have access to the amount required, this means that there is less money to invest in your business. Or in the worst-case scenario, your business can’t survive this loss.

Buying insurance is often a very cost-driven activity and if we’re honest, it can feel like a bit of a chore. But it’s so important to ensure you have the right level of cover should the worst happen. The saving you might make by not having proper and adequate cover is marginal compared to the potential cost of covering the insurance gap when you need to claim.

What happens if you think you are underinsured?

Our advice is to speak to your broker and ask them to review your policy with you. If you’re worried, we can conduct an independent audit of your insurance to help you identify whether you may be underinsured and what action you need to take. Find out more about our audit service.

Flood Re – Innovation within a conservative Industry!

Following approval from the Prudential Regulatory Authority and the Financial Conduct Authority, Flood Re opened for business on the 4 April 2016.

Flood Re was established to provide affordable cover for households located in high risk flood zones. Access to Flood Re is not available to commercial properties and businesses and house built after 2009.

Under previous agreements between the Government and members of the Association of British Insurers (ABI) flood cover was available. However in many situations the cost and terms were prohibitive leaving those who suffered flooding in a position where they couldn’t move to another Insurer.

The ABI and the Government recognised this lack of competition in the marketplace and hence Flood Re was created as a non-profit reinsurer, owned and managed by the Insurance Industry.

How it works is quite simple. Flood Re will take on the flood risk element of a household policy from the Insurer. In return the Insurer will pay a premium based on the properties council tax band. Furthermore Flood Re will charge the Insurer an excess of £250.

In addition Insurers will each contribute to the Flood Re pot by way of a levy of £180m in total to subsidise the venture.

This allows Flood Re to charge a ‘below market’ premium which is affordable to the consumer with sensible excesses.

The Home owner will not deal directly with Flood Re but with their Insurer in the normal way that will process any claim and be reimbursed by Flood Re.

Flood Re estimate that there are approximately 350,000 households at risk of flooding in the UK therefore this initiative has to be welcomed and will ease the worry and concern of those affected.
A word of warning to the wise.  This is a temporary measure and will cease in 2039 at which stage the market will revert to risk reflective pricing. In the meantime a lot has to be done to reduce the cost of flooding and mitigate future risks.

At this stage there does not appear to be any ‘road map’ outlining how or what will be done to transition. If nothing is done and the Industry and Government just sit on their hands we will revert to the status quo pre Flood Re.

Floods in Cumbria

Few things are more miserable than a flood. One cannot but sympathise with the people of Cumbria on the recent devastation left in the wake of storm ‘Desmond’.

Initial estimates by PwC predict damage could hit £400m to £450m with approximately £250m of this paid by the Insurance Industry in claims.

The Cumbria floods in 2009 caused damage totalling £275m including £175m paid by Insurers.
Across the UK in 2007 flood damage totaled £3.5bn of which £3bn was paid in claims.

These are staggering numbers yet the human hardship and suffering floods like this cause cannot be financially compensated for. The destroyed photos, personal mementos, business records and files. These are the things that make a house a home, a workplace a business and they cannot be replaced.
Properly arranged insurance can ensure that the material damage is made good and the financial loss as a result of the interruption is recovered.

However, many businesses fail to satisfactorily get to this point. The required compensation will only be met if the work has been done in advance. This demands a rigorous approach to arranging insurances combined with ongoing risk management supplemented by a good disaster recovery plan.
It’s at a time like this when a competent broker proves his worth.

At Castlemead Insurance Brokers, we take the time to advise on and arrange insurance cover that will robustly withstand a claim and successfully deliver that critical settlement. This is backed up by our dedicated claims handling unit who assist at every stage of the process.

If you would like advice on Flood Risk Management or a second opinion on your Insurance arrangements, please do not hesitate to contact us

Increase in Insurance Premium Tax

Earlier this year George Osborne, Chancellor of the Exchequer, announced in his summer budget the unexpected measure to increase Insurance Premium Tax (IPT) to 9.5% from 6%, a hefty 58%

increase. The government estimates the increase will generate an extra £1.5 billion on top of the £2.5 billion the insurance industry already contributes each year.

This increase is considered a necessity by the government, but a surprise ‘stealth’ tax by industry insiders. Osborne is confident that this rise in IPT will benefit the UK economy, arguing that it brings the UK’s IPT in line with other countries. In fact, at 9.5%, the UK still has one of the lowest IPT rates in Europe – France’s IPT rate is 11.6% and in Germany it is 19%.

The new standard IPT rate of 9.5% will apply to all qualifying premiums from 1st March 2016 and to some insurance premiums starting on 1st November 2015, so the impact of this rise is already starting to hit.

This rise in IPT puts further pressure on insurers who are already operating on slim margins with record low investment returns, and will inevitably result in insurance premium increases.
The risk for businesses, facing similar trading conditions, is they cannot justify or afford a significant increase in their insurance spend and as a result may look to reduce their cover, with possibly disastrous consequences.

There is some good news as there are ways to mitigate the impact of this rise and we can help.
 A review of the risks to your business to ensure you are getting best value out of your insurance spend is key. There’s no need to wait until your forthcoming renewal for the inevitable bad news of increased premiums, contact us now for a review of your business to find out how we can help.

Castlemead is an independent insurance broker with over 25 years history of professional service and advice to our clients. We pride ourselves on our innovative approach to solving our client's insurance issues whilst maintaining a traditional approach to client service.

Vistage Business Insurance Guide for CEO’s – Small Print Matters

Business insurance is normally purchased on a relationship basis by one of your team with price being the main driver for the purchasing decision.

The Insurance industry has reacted to this price sensitivity by gradually tightening their policy terms and conditions resulting in “small print” that allows the insurer to escape serious claims. Several national Brokers are now themselves acting as insurers operating their own capacity or ‘MGA’, meaning they are reliant on underwriting profit for their earnings.

The 2011 Mactavish report confirms most firms don’t know what insurance they have purchased or how it will perform when needed. This is Castlemead’s summary of the most common property & business interruption pitfalls.

Issues that mean you can get no payment at all

• Failure to disclose

1. You or one of your Director’s was a Director of a company that was made bankrupt or went into administration
2. You or one of your Director’s have a Criminal conviction that is unspent
3. A previous loss either claimed for or paid for by the business

• Breaching a Policy Warranty

1. Policies are now full of terms and conditions the most significant are “Warranties” or “Conditions Precedent to Liability”
2. Failure to comply renders the contract void at the insurers discretion
   This is the case even if the breach is non material to the loss
3. Common warranties are many and varied  - the policy assumes:-
   Electrical – Inspection of fixed wiring and a certificate can be produced that is in date
   Waste – Bins lids and locations are satisfactory
   Construction –Brick / Block built concrete floor pitched roof
   Security Alarm on response maintained BS7621 locks and window locks
   Stock Storage – inside on pallets – not outside not on the floor
   Heating – fixed – no fan heaters – definitely no gas powered space heaters
4. Terrorism  - previously expensive now worth considering and usually a requirement in any mortgage. Terrorism exclusions are wide ranging and include organisations such as the Animal Liberation Front – in the event a fire or explosion on an adjacent site you don’t want to be debating the cause with your insurer for 3 months.

• Issues that result in payments of less than you may need :-
  
  Always ensure you use the correct sum insured. Property insurance is comparatively cheap.

Insurers hold you responsible for any short fall. This is called Underinsurance or the  Average Condition

• Example:-

Stock Sum Insured £500,000 Value at risk £1,000,000

Claim for £100,000 £500,000 = 50% x £100,000 = £50,000 payment
£1,000,000

• Buildings – Insure for reinstatement cost including fees and debris removal
  Usual mistakes Insuring for market value, or cost price from the asset register
• Machinery Plant and Contents – Insure for replacement cost as new
  Usual mistakes Second hand value, written down value failing to make an allowance for items which are not capitalised and simply expensed – in the event of a fire it all needs replacing
• Business Interruption – Typically Insure for Gross Profit basis (normal for manufacturing risks) should represent gross margin – Turnover less purchases with a stock adjustment. Loss of Revenue or rent need similar attention
  Usual mistake – gross profit in accountancy terms includes labour that is production related – you need to insure for wages as in the event of a loss you need to keep paying your staff or pay redundancy. If buying 2 years gross profit the sum insured must show as double on the documents. Send an Accountants declaration in at year end and you should get a ‘free’ 30% allowance for growth –rarely done.
• Additional Increased cost of Working & Indemnity periods (How long business Interruption cover lasts)
  Usual mistake – Additional increased costs not purchased or only to a low limit (suggest 10%). 12 month gross profit purchased. Consider how long it would take to rebuild or relocate what you have and get back into your market

Summary:-

• Use a Broker who understands your process, is financially literate, and can explain the terms that you need to adhere to. Dealing with an insurer Direct makes you responsible for any omission – not a good idea.
• Read the policy or check the small print – if you need help get an audit from a qualified Broker (look for ACII or FCII)
• Talk though claims scenarios; a competent broker should be able to guide you on disaster recovery issues and the insurable costs.
• Usual mistake Not discussing until after the event. You can sue your broker but it costs circa £20,000 and takes 12 months to achieve. Your business will be at its weakest if a serious loss occurs and the banks are less than sympathetic to bridging this period.

Understand Your Warranties!

We all like to save money. Most of us like to think we are pretty savvy when it comes to shopping around for the best deal - be it that shiny new car, latest piece of technology, or the latest clothing fashion.

However, many of us do not make that purchase on the basis of price alone. We will test drive the car, check its specification, calculate the finance, and perhaps even purchase an extended warranty. This is good due diligence.

By comparison, however, the majority of us do not apply the same high standards when arranging our Insurance.  Many purchase their insurance on a ‘grudge’ basis. Perhaps that’s because it’s an intangible product, or we think “it will never happen to me.”  But what if it does happen to you?
Will you be properly insured or covered at all?

At Castlemead Insurance Brokers, when we visit a potential client to complete an audit of their insurances, we are continually amazed at how lax an attitude people have towards the warranties and conditions attaching to their policies.

Many do not realise the implications of non-compliance, and yet this is one of the first areas an insurer will investigate following a claim. Just because you paid your premium and have a policy in your hand, it does not guarantee that your insurer will settle. It will then be too late to start reading those warranties and conditions and even worse to discover that you are in breach!

Most of us joke about the ‘small print’, but when it comes to insurance the idiom is never more apt ‘the devil is in the detail.’ So, what does some of this detail mean?
According to Wikipedia “a warranty generally means a guarantee or promise which provides assurance by one party to the other party that specific facts or conditions are true or will happen.”

A few examples will best illustrate:

If your property has any proportion of a flat roof then it is probable that a Flat Roof Warranty will apply and the wording will be something along the following: “All flat roofs are inspected at least annually by a qualified person and all defects found remedied immediately.”
Most business policies will have a Waste Warranty attaching, which will state something like: “all combustible trade refuse shall be removed from the Buildings at the end of each working day. All waste or refuse outside the Buildings is stored in non-combustible lidded containers or metal skips kept at least 5 metres from any building or other property and removed from the premises when full.”

Another common warranty is the Unoccupancy Warranty which will restrict the cover on a property after it has been unoccupied for a certain period of time and will require some services to be turned off and regular inspection visits.

Non-compliance constitutes a breach, and the policy can be repudiated ab initio (from the beginning).
There are many other warranties for various types of risks. It is essential that you check your policy and make sure that you understand your warranties and conditions and the potential outcome for non-compliance.

In summary, we would do well to heed the Marine Insurance Act 1906, which bluntly states that a warranty “must be exactly complied with, whether it be material to the risk or not”.
And to quote the Law Commission in their 2012 review, “Once a warranty has been broken, the policyholder cannot use the defence that the breach has been remedied. Furthermore, the breach discharges the insurer from all liability under the contract, not just liability for the type of risk in question. Thus a failure to check a fire alarm would discharge the insurer from paying a claim for flood damage.”

However, they went on to note that such an approach is outdated and they have proposed “that a breach of warranty would suspend the insurer’s liability, rather than discharge it. Where the breach is remedied before the loss, the insurer must pay the claim. Furthermore, where a term was designed to reduce the risk of a particular type of loss, a breach would suspend liability in respect only of that type of loss. For example, a failure to install mortice locks would not affect a claim for storm damage.”

The end result of this review is that The Insurance Act 2015 received Royal Assent on the 12th February 2015, and will come into force in August 2016. It will incorporate the proposed amendment above.
In the meantime however...…….do not ignore your warranties!

If you would like a free audit of your insurance arrangements and, documented by way of a forensic report or if you have any questions arising from any of the issues raised in this article please do not hesitate to contact us.

Adrian Webb
Adrian has thirty years Insurance broking experience having managed his own business for twenty one years until it was purchased by a national brokerage. Adrian continued to run the business for its new owners prior to joining Castlemead where he has been tasked to develop a new office at Exeter as part of Castlemead’s continued growth strategy.

Controlling Credit Hire costs - the secret to cheaper Fleet Insurance

What Is Credit Hire?
Credit hire is where an innocent party to a motor claim is placed in a replacement vehicle, free of charge to that individual. The hire company then invoices the ‘at fault’ insurers directly.

Hire Claims – Why are they so expensive?

Hire claims are regulated by a contract between Credit Hire companies and Insurers called the ABI General Terms Of Agreement. (GTA).

The GTA bands vehicles into groups with standard hire rates  eg:
- Group S1 (1 litre or less) = £31.46 + VAT per day
- Group SP2 (eg mini cooper 1.6) = £78.29 + VAT per day
- Prestige vehicles BMW, Audi & Mercedes are over £100 per day.
- Don’t hit an Aston as these are £600 / day!
- If you are interested can see the agreed costs here.
- Under the GTA the motorist is permitted to hire a like for like vehicle.
- Only if  the hirer’s vehicle is older, they are expected to downgrade at least 2 classes
- It has been established that , if offered, most people would agree to a slightly smaller vehicle as long as they are kept mobile.

What can we do about it?
If we get the claim form immediately we can intervene before a third party is placed in credit hire. Once they are in a credit hire vehicle we are not permitted to take them out due to the GTA rules.

By controlling the hire for the third party...
- We can keep a much closer control over the hire period,
- We can probably put the third party in a smaller car than they would get through a credit hire company.
-  We won’t be liable to pay admin fees

Additionally The GTA sets out specific obligations controlling hire times
• Inspection must take place within 48 hours of hire starting,
• The vehicle must be off hired no later than 48 hours repairs are completed
• Once a total loss cheque is received the vehicle must be off hired in 7 days

We also need to be vigilant on settling the bill quickly
• The insurer has 30 days to pay for the hire.
• After 30 days there is a penalty payment.
•  After 60 days there is another penalty payment.
• After 90 days the rate reverts back to ‘spot rate’.

It is key therefore for us to determine liability early so payments can be made within the first 30 day bracket. It is also vital for any driver to report claims as soon as they occur.

Business Interruption

We have recently been appointed by a client who suffered a damaged roof over last winter’s storms. They had prudently purchased business interruption cover in good faith but due to a number of omissions they were threatened with having no cover at all as they were so grossly underinsured.

Here is how the problem arrived.

Gross profit – setting the sum insured

Gross Profit is a familiar term used in both accounting and insurance circles. There is a key difference however. Gross profit in insurance includes the cost of production wages due to current employment law, in the event of a fire you cannot simply terminate your staff you must either make them redundant or continue to pay them. This common mistake made a 40% difference to the sum insured alone.  The sum insured calculation on below the line purchases was also flawed resulting in a further 10% error.

Period
The client had one or two large customers and so had purchased an 18 months indemnity period. However the sum insured was entered on the policy and brokers summary as a 12 month figure 33% too little.

Growth
The business was growing.  Insurance policies typically give a 30% allowance for growth under the Declaration Linking provision. You would think that this would automatically give you adequate cover for any increase.

However there is a condition to obtain this ‘free’ extension – one which is frequently overlooked by brokers and insurers. You must provide a declaration figure from your accountant providing last year’s true figures and pay any adjustment premium due. This had not been done so allowance for growth was excluded. If you do not do this routinely Castlemead would be happy to undertake this for you

Additional Increased Cost of working

To get a gross profit claim paid you have to show that you will lose the relating turnover. Additional Increased cost of working cover gives you an allowable spend on increased costs irrespective of its effect on turnover. It is an essential component of any programme. This client had the opportunity to temporary roof the factory at a cost of £40,000 but their insurer would not meet this cost.

In total the client had a claim for £250,000. They were offered a payment of just £43,333.

Claim		£250,000
Underinsurance		£125,000
Discount for  12 month sum insured		£83,333
	Add temporary roof cost	£40,000
	Amount not covered	£206,667
	Uninsured amount	83%

The broker and insurer are both household names. Fortunately the client’s bank agreed an overdraft to cover the costs and the client continues to trade.

Castlemead's advice:

• Use a professional broker who can calculate the likely gross profit loss for you and has experience of claims in this area.
• Review this calculation with your operational team and set an appropriate Additional Increased cost of working sum insured
• Get a completed declaration into your insurer annually
• Buy the right number of years for the business to recover – this could be 3 – 5 years in extremis.

Security technology that can be defeated for £75

Castlemead Insurance Brokers have become aware that GPS and GSM/3g based tracking and alarm technology can be blocked with off the shelf jammers available on the internet. Sites such as iforgou.com based in China offer gadgets that will jam mobile phones and GPS.

At the moment there is no law against owning one of these devices however use of them is a breach of the Wireless Telegraphy Act 2006. Somehow we doubt that thieves of high end vehicles or those involved with hi jacking high value loads from trucks will worry about this minor offence.

We urge you to be aware of the potential deficiencies in these technologies and ensure that you consider these as part of your security strategy.

Flood Barriers

You may have seen the ongoing debate between the Government and the insurance industry regarding who will pay for flood damage in areas that repeatedly suffer damage.

We act for a Flood Barrier designer and manufacturer and could never understand why these are not regularly used as a method for defeating this issue. Germany has many areas that flood annually and their cities are protected by miles of aluminium barriers installed each autumn. It appears that no UK insurer recognises flood barriers as an effective defence.

The British Standard that is set up is a start - See the video here but the specification does not deal with the depth or require a zero leak result, rather it compares the result to sandbags which cannot stop damage being caused. If you have commercial premises that need protection, we do have an insurance backed solution.

Please talk to Castlemead Insurance Brokers and we will afford you
an introduction.

Motor Fleet Risk Management

Castlemead Insurance Brokers find the haulage business remarkable as it’s one of the few businesses where you send a new employee out of the yard with £100,000 of kit and up to £300,000 of load and say we will see you back in a couple of days time! We've been working at ways to reduce this risk.

Our customer Framptons Transport Services have recently been featured on the BBC1 One Show demonstrating their new camera system. Castlemead were instrumental in getting them to fit cameras to their fleet of vehicles to protect them from fraudulent claims and reduce the number of incidents settled 50/50.

Interestingly the cameras were self funding as Castlemead negotiated a discount on the fleet premium that paid for the cameras in the first year. Motor fleet premiums are driven by claims cost. Every time an accident can be defended it helps in the next year's renewal negotiation.

Framptons have already seen two incidents where the camera has acted as the indisputable independent witness where the truck would have been found liable in absence of the video.

Castlemead have experience in rolling out cameras to large fleets and can help you with understanding the cultural issues that drivers naturally worry about. We are also working with Drivecam.com an American Camera supplier. They have combined cameras with remote monitoring and an analysis bureau. When the camera is tripped by a sudden manoeuvre the in-vehicle footage both out of the windscreen and of the driver gets sent for review to Drivecam's team.

They review the footage to see how the driver has performed in what may be a near miss late braking situation. If they have concerns they email the footage to the transport manager for them to review.

This could be invaluable where a driver has only just started with the business. The hope is that an accident can be avoided by training and good management using the footage as an aid. We also believe that this will change an organisation culturally to make their drivers aware that the business is looking for them to perform safely and professionally.

Need help with this type of insurance? 

Cheque fraud and BACS

Many businesses that Castlemead Insurance Brokers talk to are moving away from cheques due to perceived fraud issues. You may have experienced one of your cheques being changed to an alternative payee?

We have a number of examples of BACS causing a problem. We recently discovered that the Sort Code and Account number does not relate to the payee loaded onto the banks systems. We have seen a client loose a six figure sum due to a clerical fraud.

Their book keeper loaded many low value payments to realistic payees, electricity, sundry suppliers and changed the bank details to one of her nine that she had set up. The business did not become aware of the losses for two and a half years.

A supplier of ours also suffered a similar fate with their financial controller manipulating sales manager’s bonus payments to include 10% to her accounts.

Both culprits have been prosecuted, however neither has been able to pay back the money stolen. A fidelity policy would cover this issue which is something we are now regularly discussing with our clients.

As an aside professional indemnity cover suggests that it gives a fidelity cover as part of the wording, however most restrict cover to losses suffered by clients rather than losses suffered by the business itself.

Need insurance help? Fill out our brief form

Ministry of Justice Reforms Legal Aid, Sentencing & Punishment of Offenders Act 2012

On the 1 August 2013 a new system for dealing with Personal injury claims relating to Employees and members of the public was introduced.

The insurance business has long felt that the costs enjoyed by solicitors dealing with these incidents unreasonably outweigh the compensation awards obtained. It is not unusual to see costs being 300% of the amount of Damages awarded for pain, suffering and loss of earnings.

A compromise has been agreed and the result initially looks positive.

• Referral fees banned
• No more insurance policy taken out to insure the costs of losing
• Fixed fees for claims up to £25,000 of between £900 and £4,000
• Online to make it faster

Naturally the legal profession has also made some gains.

• Strict timescales for response
  - 24 hours to acknowledge
  - Liability to be decided in 30 days
  - Substantial cost penalties if these timescales aren't achieved

Claim amount    Fees In time       Fees time not met           Increase

£2,000                    £900                £1,300                         44%

£15,000                  £1,600             £3,000                          87%

£25,000                  £1,600             £4,000                        150%

• The claimant will never face costs being awarded against them even if their claim fails unless for fraud
• 10% damage award increase, solicitors can now net their fees off the damages
• Allegations relating to the standing of the client or fraud need to be robust enough to withstand scrutiny
• Arguing contributory negligence is now uneconomic

Castlemead concerns

We are not convinced that these reforms will achieve a reduction in claims and that they may even inspire a greater claims culture, indeed there are several unintended consequences.

• Solicitors have bypassed referral fees rules by direct advertising or corporate structures that remunerate advertisers in different ways for example dividend payments
• Solicitors will press hard to push claims outside the portal to maintain their fees
• Next day 1st class post delivery is used as the measure for the 24 hours to start
• Our experience of the post system is that it is not reliable enough for this
• Settlement should now take 3 months unless medical evidence is complex or the injury is ongoing, solicitors will be able to advertise this fact promising a speedy payment
• By waiving rights to costs insurers have little incentive to go to court as any barristers and solicitors fees expended are unrecoverable and will form part of the claims experience
• We believe insurers will move to settle as many incidents as possible under £25,000 chasing the perceived benefit of reduced fees
• Fraud and contributory negligence arguments used in the past to 'horse trade' with claimants solicitors over damage awards are now eliminated as negotiation tactics leading to higher damage awards, this is together with a 10% automatic increase in damages award 

What we need our clients to achieve

• Deal with post promptly get the claim documents to us by email same day, a big ask but necessary
• Provide investigation documents by return following a claims investigation or better on the day, we will provide a list of documents to you when we are notified
• Draft a process for this internally for us to share with your insurers

Why?

• We are concerned insurers will recharge the increased solicitors costs to those clients who fail to forward documents in time in a similar way to Pre Action Disclosure requests not being met in the past
• At £1,500 a time this could mount up

Outlook

• Claims for £25,000 or less will result in insurers taking the most economic, if not the most robust strategy and paying claims
• Castlemead believe we are likely to see an increased volume of low value claims, similar to the whiplash phenomenon, processed under this system due to speed of process and solicitors needing larger volumes of work to make up lost revenue
• Claimants still get 3 years to make a claim, however the rules are not retrospective
• Claims experiences will change in profile, it is very unlikely that we will see claims reserves sitting on policies for years on end.  
• This is a positive although it reduces insurers limited opportunities for investment returns, it makes client exposure very quick to establish
• Some insurers invest much more heavily in claims investigation at early stages to defend claims
• We believe insurers performance on defending claims will become homogenous meaning that the larger process driven household name insurers will be able to deal successfully with claim intensive clients
• The increased number of claims will increase premiums serving to increase insurance company premium volumes and margin return typically 30% is aimed for by insurers
• We believe that clients with large footfall exposures may well be better off considering a self insurance excess that will take out claims and reduce overall cost of risk
• Taking the self insurance option means that a client’s health and safety systems and controls need to be exceptionally robust to make it worth investing in the fees incurred in defending this type of claim  

If you would like to discuss any of these issues raised in this blog regarding MOJ and how they may affect your business over the next 18 months please contact Richard Ingleby richard.ingleby@castlemead.com, direct dial  0117 9453907.

When cheap prices leave you unprotected

Price seems to be the main reason for people to choose which insurance broker and policy they use. The insurers have realised that some brokers will peddle any policy if the price and the keyfacts document look good.

We have recently seen a client, who is looked after by a superficially reputable national broker, sold a policy that we would consider unacceptable in its terms.

Our audit's findings relate to the following clauses covering the Employers and Public Liability sections of the policy.

“HSE RECOMMENDATIONS CONDITION

It shall be a condition precedent to ALL Liability Sections that the Insured shall ensure that they and their Employees, and any third parties acting on the Insured's behalf, comply with all applicable statutory requirements, and Health & Safety Executive (HSE) regulations, approved codes of practice, recommendations and guidance, or those of any equivalent bodies in Northern Ireland, the Channel Islands or the Isle of Man, applicable to the operations and processes conducted in connection with the Business”

In the event of a serious injury taking place the client will have to demonstrate compliance with a moving target of HSE guidance delivered via website which changes daily.

“PERSONAL PROTECTIVE CONDITION

The policy also required suitable PPE, maintained in working order, employees trained in its use, signed off and a disciplinary regime in place for non compliance”

We believe insurance is there for the times when accidents happen and processes fail, however in this case:-

• No safety boots - no cover
• No goggles being worn whilst grinding - no cover
• Workplace noise over 85db and a loss of hearing suffered - no cover 

The largest claim for personal injury in the UK is £15m - a business does not need to be fighting these claims by itself or employing a solicitor to get its claim paid by the insurer.

Castlemead Insurance Brokers offer an audit to customers who have concerns over their small print. 

Insurance Fraud - Courts siding with insurers to stem the tide

Two recent cases show that the Courts will not accept claimants grossly exaggerating their injury.

David Ribchester from Tyne and Wear said wrist injuries from a workplace incident stopped him from carrying out basic tasks including opening jars and driving, claiming £923,000 from insurers. He was jailed for 12 months when he was secretly filmed by insurance investigators on a number of occasions between February 2008 and October 2009.

You can see the footage on YouTube here. 

He was filmed at his local rugby club where he was seen to "grab the ball with both hands and go into a hard tackle" despite claiming he was unable to tie his shoelaces. The 31-year-old, who previously admitted fraud by false representation, was sentenced at the Old Bailey in London on Thursday.

In another case James Shikell submitted an inflated £1.35m claim for damages for injuries in a car crash. He was also sentenced to one year’s imprisonment after the courts found him guilty of contempt of court. The decision came after footage of him playing football revealed that he had exaggerated his symptoms. His father Robert Shikell also received a year's imprisonment for his role in supporting his son's claim while a third man, Simon Fennell was fined for providing a false statement in Mr Shikell's personal injury claim.

If only the industry can deal with minor whiplash claims - there are new Ministry of Justice changes coming into force from the end of the month to help reduce the value and fees on less serious injury claims.

We will blog about this in a few weeks’ time and add the link to this article.

Flying Felix

As we all marvel at the death defying jump made last week by Felix Baumgartner, have you ever considered  covering your own “high flying” staff in event of absenteeism through accident or
sickness?  The loss of a member of your team for even a short period can have consequences not just to your business  operations but also to your company profit as the wages for those affected still
need to be paid. 
At Castlemead Insurance Brokers in Bristol we have insurance solutions to cover your business. 

A Personal Accident policy can be arranged to provide payments to you to cover the more ordinary accidents which can befall your staff which can include payments to your business to cover;

• Death
• Permanent Total Disablement  
• Permanent Disabling injuries 
• Temporary Total Disablement 

Additional benefits to cover sickness can also be included. 
These covers can be purchased easily and inexpensively – please contact us for further information.