A veterans financial business for the Armed Forces, veterans and blue light services is offering guidance on insurance which may be particularly important during the restrictions of the COVID-19 lockdown. Here, Services Family Insurance looks at some matters to consider and what options might be available:
As veterans, we started a new small business called Services Family Insurance to help customers address the unexpected - that is what insurance is for!
However, we did not expect a pandemic and certainly not a national lockdown even though we trained for most national disasters while serving.
So like all small businesses when cash flow is tighter than ever during this lockdown, what should we do about insurance?
Here we look at core insurance (property and liability cover) and provide some suggestions that might save you money.
Do I Need?
- Employers Liability Insurance? Yes
- Insurance cover required by law for your registered workers – the fines for non-compliance are very severe (£2,500 per day).
- What if employees are furloughed and so not allowed to work – is there a need to keep up the Employers Liability?
- Still YES.
- Employers' Liability (Compulsory Insurance) Act 1969, updated by the Employers' Liability (Compulsory Insurance) Regulations 1998 set the requirements.
- Currently, there has been no amendment and so you should regard your employees as zero-hour contract workers – contracted and available return to work.
Read more about how this cover applies to workers and even volunteers
- Public Liability ? – Maybe
- There are NO rules to stop you suspending or terminating cover and to seek a rebate of some premium. However, you must understand two risks:
- If your previous work causes an injury or damage during the period of suspension, a claim would not be covered or would be open for challenge.
- When cover re-starts, deleted all work done before the “new” start date may be excluded or subject to lower limits etc.
- Always shop around when renewing your insurance
- Professional Indemnity?– the factors are basically the same but
- When or how claims are made is more fluid and your decision to suspend is even trickier – perhaps your advice was fine in business as usual but, is now wrong in lockdown. Could your client now claim your advice caused them a financial loss?
- Could your client claim it now caused them a financial loss?
- Before suspending or terminating cover take advice and take a look at:
- The ‘run-off’ provisions of your policy to ensure that you are covered for future claims arising out of advice you gave while it was running.
- Check and if by you terminating a policy mid-term it changes your insurers obligations going forward.
- When re-starting a policy, your insurer will insert a date (a “back stop” to avoid being liable before the back stop. They will also require more stringent checks to ensure that you are “unaware of any circumstances which may give rise to a claim”.
NB: Some Professional Indemnity packages, like ours with award-winning partner Taploy, can offer short term policy that are designed to provide cover for when you work as often as you work and therefore avoid the potential unnecessary expense of an annual policy.
Read more generally about professional indemnity here.
- Buildings and Premises – your lease or mortgage will probably have a continuing obligation to insure the building, fixtures and fittings and, potentially, to maintain or monitor systems.
- If you leave your premises unoccupied then check your policy for extra safety measures or requirements you need in place. If unoccupied for more than 30 days, tell your insurers, who will probably reduce the scope of the cover, and landlord – he has insurance too.
- We suggest:
- That you do not suspend or terminate cover but tell the insurer that the premises are unoccupied - if you do not there may be no cover at all.
- Get advice, check what risks will be covered while unoccupied and remove any valuable assets (high value stock, your IT etc) to somewhere safer (and consider the data risks if your hard drives are stolen).
- Read more about these issues on the Services Family website.
Before you cancel or delay your business insurance:
- Talk to your broker or insurer directly and ask for a mid-term adjustment or new quote. As the risks have changed, the premium could alter substantially if;
- Your staff numbers have reduced significantly
- Your business changes (e.g. from a mix of operations and administration work to online administration only)
- If your turnover projections are vastly changed (lower or higher)
- If a substantial part of the insured period remains, three months of lockdown or reduced/changed activity could make a significant difference to your premium.
Have a constructive conversation with your insurer about your circumstances and what you should pay.
The Services Family team are aiming to help to treat all customers fairly so read about:
Services Family has also written a blog about getting the best personal and business deal.
While it is not easy to forget the vital work going on by many people during this lockdown, we must also remember the importance of micro-businesses to our economy.
If you’ve read this, you may be thinking about not returning to self-employment after lockdown – just remember, when it is time to get back to work:
OUR COUNTRY WILL NEED US, ALL OF US BACK IN WORK!