During the next few weeks, drawers and cupboards in homes up and down the country will be filled with expensive Christmas gifts, and burglars know it!
Jewellery can make up a large portion of Christmas gifts and will be most attractive to thieves, being both valuable, portability and sellable.
If you’re buying an expensive Christmas gift that you would like to keep a surprise from a special person, don’t keep it a surprise from your insurance broker! Levels of additional cover over the Christmas period will vary from one insurer to the next, so you should read your policy documents carefully to know exactly what you’re covered for.
If you throw out any branded boxes the gifts came in, break them down as much as possible, otherwise you’re advertising the contents of your home to potential burglars!
If you’re lucky enough to receive a particularly valuable Christmas present this year, it might be worth a quick call to your insurance broker to see if the level of cover needs to be adjusted or, in the case of something like an expensive watch or ring, your gift needs specialist cover.
Christmas opening hours
Friday 23 December 9.30am-12noon
Monday 26 December Closed
Tuesday 27 December Closed
Wednesday 28 December 9am-5.00pm
Thursday 29 December 9am-5.00pm
Friday 30 December 9am-12noon
Monday 2 January Closed
Tuesday 3 January 9am-5.00pm
Wishing you a Merry Christmas and prosperous new year!
Employee wages represent a significant expense for most businesses, and can become a major cause of underinsurance in the event of a loss.
When calculating gross profit sum insured, businesses need to decide whether or not to subtract employee wages – and if so, to what extent. Getting it wrong could have a substantial bearing on the adequacy of that business’s gross profit sum insured.
Tackling wage roll misunderstandings
When calculating gross profit, accountants will usually subtract employee wages to arrive at a final figure. However, for insurance purposes, the significance of wage roll needs to be determined before deciding whether or not to subtract it. This difference in approach is a regular source of underinsurance.
Where does wage roll fit in?
Depending on the nature of your customer’s business, a proportion of their wage roll might constitute an uninsured working expense (UWE).
By declaring a UWE, you are stating that those wages will not continue following a loss, and therefore do not require insurance. If they do continue, you could find your company is significantly underinsured.
UWEs are a crucial part of the gross profit sum insured calculation and must be approached with great care to avoid underinsurance.
Delving deeper into wage roll
Most businesses will have a range of employees, each with varying degrees of importance to their on-going operations.
The question of whether to subtract wage roll is therefore not black and white, but requires careful consider to what would happen to those different categories of employees immediately after a loss.
Some employees may be let go, but others may be crucial to the business’s recovery. Determining which fall under each category is an essential exercise for establishing an adequate gross profit sum insured and minimising underinsurance.
Consider partial losses
When considering which wages would cease in the event of a loss, businesses need to consider both partial and total losses.
Partial losses are much more common, and neglecting to consider these scenarios is a common cause of underinsurance.
Which wages would cease?
How to calculate gross profit sum insured
Business interruption is recognised as a particularly difficult area for brokers and customers alike, with an estimated 40% of policies thought to be underinsured, by up to 50%.
Please contact Ashleigh Mackay and Associates for a no obligation business insurance quotation on 01689 861122
Fires represent one of the greatest threats to tenants and properties, but fire doors can play a pivotal role in minimising losses.
There are on average 162 building fires in the UK every day, with 80% occurring in residential properties.
Fire doors, if fitted correctly, are a vital safety feature in buildings as they help to prevent the rapid spread of fire and are a legal requirement in a significant proportion of residential properties. However, they are not always used to best effect.
Here, we look at some common challenges and explain what you can do to help improve fire safety in properties.
Fire door failures are surprisingly common
Figures from the London Fire and Rescue Service suggest that in around a dozen fires each year in the capital, there are significant failures due to fire doors having been replaced, left open or fitted incorrectly.
Common fire door faults can include:
Other potential hazards can include – incorrect signage, unsuitable hinges, damage to the floor and a gap of more than 3mm between the door and its frame.
Selecting the right fire door
Fire doors are given a rating based on the amount of time it takes for the door to perish in a fire. The most common ratings, as referenced in UK Building Regulations and Standards, are FD30 and FD60, although higher-rated doors such as FD90 and FD120 are available and offer additional protection.
Tip 1: Fire doors are tested for limited smoke passage and a fire door with smoke protection requirements will be described with the suffix ‘S’, e.g. FD30S.
Challenges when refurbishing properties
If you are refurbishing a property, it is important to understand how specifications, installation and alterations, such as glazing, could impact on fire door performance.
Manufacturers test their fire doors in laboratory conditions with suitable door hardware (such as locks, latches, hinges and door closers), which helps them understand the type of configuration in which the door may be used and the type of door hardware that may be fitted with it.
Tip 2: You should ensure you check the door manufacturer’s installation instructions and data sheets to ensure they install the doors that will work best for individual locations.
Helping prevent major loss from fires
Fire doors are designed to prevent fires spreading and causing major loss as they can make a real difference to the impact of a fire. Tragedies have occurred as a result of a failure to ensure they have been installed and are being used correctly.
As such, door repairs, maintenance and replacement should be carried out by a knowledgeable specialist who has the necessary competence and expertise.
Whether you own properties in Scotland or England and Wales, you should be aware of new energy performance regulations that are coming into force, firstly in Scotland in September, and then in England and Wales in 2018.
Energy performance regulations in Scotland
Scotland’s new energy performance regulations, known as Section 63, came into force on 1 September 2016.
The changes require property owners to produce an Action Plan for Carbon and Energy Performance (ACEP) at the point of marketing a non-domestic building for sale or let, outlining the measures the new owner should take to improve its energy performance. The required works could vary significantly from property to property, but may include changes to lighting, heating, cooling and ventilation systems.
Energy performance regulations in England and Wales
In England and Wales, landlords will need to meet Minimum Energy Efficiency Standards (MEES), which require a building to achieve at least an ‘E’ Energy Performance Certificate rating.
Lack of awareness
There will be financial penalties – in Scotland, England and Wales – for letting out properties that do not comply with the relevant regulations.
MEES also presents a challenge for smaller portfolios.
In the event of a substantial loss, it might cost significantly more to reinstate a property in a way that improves its energy performance to meet EPC requirements. The cost of reinstatement could exceed the sum insured, leaving you at risk of underinsurance.
Machines have been making workplaces more efficient since the Industrial Revolution, but their impact on health and safety is a complex issue.
Today, the emergence of robots is bringing significant health and safety benefits to a variety of workplaces, but also new challenges.
What kinds of organisations are using robots?
Robots are most commonly used in manufacturing, but are increasingly being introduced to a wide variety of industry sectors, from healthcare to retail.
The health and safety benefits of robots
Robots can carry out tasks that are dangerous for humans to perform, such as lifting or moving heavy objects, or working with hazardous substances. There is also a new generation of wearable robotics devices that can reduce the risk of injury, or aid the rehabilitation of workers who have been injured.
However, as a number of well-publicised incidents have demonstrated – including the death of a worker at a VW plant in Germany and a similar incident at a factory in India – wherever robots are capable of interacting with humans, there are risks that need to be mitigated.
What are the risks of a robot workforce?
Factories now routinely use cages and guards to avoid unwanted interaction between humans and fixed robots, however as the Health and Safety Executive (HSE) has observed, new collaborative robots are being developed that are designed to be used in the same workspace as humans.
What does the law say about workplace robots?
Although the HSE has published research on the risks of human and robot interaction, there are no specific health and safety rules relating to the use of robots.
However, health and safety law does require that employers take any reasonably practicable measures that will keep their employees safe at work. For organisations operating robots alongside a human workforce, this could include:
What are the potential insurance implications?
Should an employee be injured as a result of their employer’s failure to take reasonable safety measures, the company concerned could face an employers’ liability claim, as well as regulatory action from the HSE.
Liability issues could become even more complex as companies begin to use robots with a greater degree of autonomy, or self-learning capabilities.
A draft EU report written this year proposed the creation of an obligatory insurance scheme that would force manufacturers to take out insurance for the autonomous robots they produce.
From February 2016, fines for health and safety (H&S) offences, corporate manslaughter and food safety increased substantially. The increase applies to cases reaching the courts from February 2016, even if the incident that led to the prosecution occurred before that date.
You may not be aware that H&S fines are now based on turnover. For example, a company with a turnover of less than £2m can now face a H&S fine up to £450,000; between £2m and £10m, the fine can be up to £1.6m, and a company with a turnover of £10m- £50m could face a fine up to £4m. So-called ‘very large companies’ will be subject to even higher fines.
If you are part of a bigger group, it is possible that the court could seek to levy a fine based on total group turnover, and thus increase the level of the fine.
These fines are in addition to court legal costs, and there is also potential for individuals to be imprisoned or disqualified as a director. In the event of a corporate manslaughter conviction, the court may require the offending company to publicise the conviction on their website and other literature. Moreover, the conviction would have to be disclosed on procurement tenders.
An alleged breach of duty by a company director could expose them to claims under a Directors & Officers Liability policy, a cover that some may not have seen as necessary.
For more information please contact Ashleigh Mackay & Associates on 01689 861122
In this year’s March Budget, the Chancellor of the Exchequer announced Insurance Premium Tax (IPT) would rise from 9.5% to 10% from 1 October.
There will be a concessionary period that will begin on 1 October 2016 and end on 31 January 2017.
During this period, mid-term adjustments for policies with term start dates before 1 October 2016 will continue to be liable to IPT at 9.5% provided the premium is booked in insurers systems by 31 January 2017.
For policies incepted or renewed prior to 1 October 2016 where the transaction date is prior to 1 October 2016 the IPT rate applicable for new business, renewals, mid-term changes (additional/return premiums) will be 9.5%.
For policies incepted or renewed on or after 1 October 2016 the IPT rate for new business, renewals, mid-term changes (additional/return premium) will be 10%.
For policies incepted or renewed prior to 1 October 2016 where the transaction date is on or after 1 October 2016 the IPT rate applicable for new business, renewals, and mid-term changes and cancellations where there is a return premium will be 9.5%.
For mid-term changes where there is an additional premium the IPT rate applicable will be 10%.
The Insurance Act is a piece of legislation designed to modernise Britain’s insurance industry. The current regulations which govern the contracts between businesses and insurers are over 100 years old. The Insurance Act received Royal Assent on 12th February 2015 and will come in to force on 12th August 2016.
The areas of legislation which are affected by the Act are as follows:
• disclosure and misrepresentation
• proportionate remedies
• fraudulent claims.
To read the Insurance Act 2015 in full go to www.legislation.gov.uk
What the reforms mean for businesses
The aim of the Act is to remove rules which no longer reflect good commercial practice and balance the interests of the insured and insurer to put both parties in a neutral position. The Government estimates businesses will benefit by about £100 million over the next ten years through lower litigation and transaction costs.
What has changed
1. Disclosure and misrepresentation in business insurance contracts
When obtaining insurance under the current law business owners are required to disclose anything which may influence an insurer in deciding whether to accept the risk and at what premium.
Under the new Act, a new ‘duty of fair presentation’ applies and whilst there is still a requirement to disclose all information which a business (“the insured”) knows or ought to know, in the absence of full disclosure the duty is still met if the insurer is provided with sufficient information to enable them to ask more questions. This puts the insured and the insurer in a more balanced position.
In gathering the information to disclose, a business is expected to undertake a reasonable search of the information available to them, and the Act provides clarity around who must be included within this search (where applicable):
• senior management within the business i.e. anyone who plays a significant role in the making of decisions about how the businesses activities are to be managed or organised
• a person for whom cover is provided by the insurance
• anyone who is responsible for the procurement of the insurance.
Information should be presented in a manner which is clear and accessible, the intention is to prevent ‘data dumping’ where excessive information is sent to insurers with the expectation that they will pick out what they need. The duty of fair presentation applies to new business and renewals from 12th August 2016. It also applies to mid-term adjustments effective from 12th August 2016, even if the policy was taken out before that date.
2. Remedies for non-disclosure or misrepresentation
Currently in the event of a non-disclosure or misrepresentation, the insurer is able to treat the policy as if it had never existed and refuse to pay any claims.
The new Act brings in a fairer, more proportionate approach whereby if the breach was deliberate or reckless the insurer can still walk away from the policy, refuse to pay any claims and retain the premium.
If the breach was not deliberate or reckless, the remedy available depends on what the insurer would have done had the full information been available to them when the policy was taken out.
• if the insurer would not have accepted the risk, then it can cancel the policy from inception, refuse to pay all claims but must return the premium
• if the insurer would have accepted the risk but on different terms, the policy is treated as if those different terms had been applied
• if the insurer would have charged a higher premium, it can proportionately reduce the amount it pays on a claim.
A warranty is a term in an insurance contract which must be strictly complied with. Under the current law, if a warranty is breached, the insurer is discharged from all liability as from that date, even if there is no connection to a claim and the breach can be rectified.
After the new Act comes in to force, in the event that a warranty is breached, the insurer’s liability will be suspended rather than discharged. If the insured can rectify the breach, cover is restored.
Where a warranty or other term has been breached, an insurer will not be able to decline continued cover if the insured can prove that there was no causative connection between the breach and the loss. The Act also abolishes ‘basis of contract’ clauses, a statement an insurer can add to documentation which automatically transforms statements made by the insured into a warranty.
4. Remedying fraudulent claims
The new Act clarifies the remedy available to an insurer in the event of a fraudulent claim. The insurer has the option to terminate the contract from the time of the fraudulent act and is not responsible to pay the claim. If the insurer had made any payment in respect of the claim, it is able to recover those payments. However, the insurer would remain liable for any genuine losses prior to the fraudulent claim.
Next steps for businesses
The Act will come into effect in August 2016, extending to every commercial insurance policy written in the United Kingdom (with certain exceptions). We will be in touch to discuss your insurance requirements in good time before your renewal date, in the mean time you should start to think about how the changes will affect you, such as what information you may need to disclose, who holds this information within your business and how you might capture it.
What we’re doing
We are working with insurers and other partners to ensure our processes, procedures and documents are ready for the Act. We will issue further updates in this regard as more information becomes available but in the meantime, should you have any questions, please speak to Gary Mackay on 01689 861122.
Any views or opinions expressed in this briefing are for guidance only and are not intended as a substitute for appropriate professional guidance. We have taken all reasonable steps to ensure the information contained herein is accurate at the time of writing but it should not be regarded as a complete or authoritative statement of law.
Property Owners insurance is designed to protect you as an owner of a property whether it be a Commercial or Residential let. It is to safeguard your assets and protect your investment.
Ashleigh Mackay and Associates pride themselves in having many years’ experience in this field.
Cover is generally on an “All Risks” basis so this will include Accidental Damage as well as the usual risks of Fire, or Water Damage.
Major catastrophes, such as serious fire damage to your property would be covered for any rebuild or refurbishment required, so you would need to insure the rebuild cost of your property adequately to cater for this.
Your Legal liability for claims made against you as owner of the property is also included for usual indemnity limit of £2,000,000.
You would also be insured for your loss of rent in the event of the property becoming uninhabitable due to a fire or serious water damage, where the tenant would have to be moved to temporary alternative accommodation pending repairs being carried out.
As an independent insurance broker Ashleigh Mackay has access to many insurance companies which enables us to negotiate and obtain competitive quotations for this type of insurance.
We also administer policies for clients who multiple property portfolios.
Your policy can be tailor made to suit your requirements.
Our customer service is very important to us and our advisors believe in developing a good relationship with our clients and to provide sound advice on selecting the right cover for you, backed up by a good claims service in the event of a claim occurring.
For a no obligation insurance review and to find out more about how we can help you please call Ashleigh Mackay & Associates on 01689 861122 or visit www.ashleighmackay.co.uk
For many, balconies provide the perfect setting to make the most of long summer nights – eating, drinking and socialising with friends.
However, in recent years there have been a number of serious fires on balconies in private rental and social housing properties. While tenants, once educated on the matter, should take their share of responsibility, there is much that landlords and managing agents can and should do to minimise fire risk.
Understanding the risks
One of the biggest risks comes from barbecues. An estimated 1,800 people a year visit A&E in the UK having had an accident involving a barbecue, with burns and scalding the most common injuries suffered.
Barbecues should not be used on balconies under any circumstances. A number of recent fires in private rental and social housing properties have demonstrated the potential hazards, for example:
The risks are compounded by the fact that wind speeds are stronger at a greater height, and wind patterns can be less predictable due to the proximity of neighbouring buildings. The constrained layout of balconies can also affect ease of escape for building occupants.
The London Fire Brigade (LFB) says that of 89 barbecue fires it dealt with in the summer of 2013, 7% involved balconies. The LFB reported a further seven fires involving barbecues on balconies in the 12 months up to March 2014.
However, barbecues are not the only potential balcony hazard. Fire pits, patio heaters and smoking all pose additional risks. In April, Essex Fire and Rescue Service issued a warning about the dangers of patio heaters, after four people were hurt when a device exploded in Basildon.
What can property owners and registered providers do?
There are two fundamental ways in which property owners can minimise fire risk. The first comes when designing, building or refurbishing a property, and the second relates to education.
Top 10 barbecue safety tips
While barbecues should never be used on balconies, they can be used safely in outdoor communal areas, provided these safety procedures are observed.
When designing housing, careful consideration should be given to the materials used. Combustible insulation or external facing materials such as timber cladding can increase fire risk, while developers should also be aware of the risk of fire spreading more quickly through voids and cavities. It is also essential that smoke detectors are fitted and tested regularly.
It may be possible to provide outdoor communal space, where devices such as barbecues can be used more safely. However, consideration must then be given to landscaping – for example, soft landscaping such as timber bark chippings can allow fire to spread more quickly and may affect the fabric of a building.
Use of devices such as patio heaters and barbecues on balconies can be explicitly prohibited in tenancies, however a landlord’s responsibilities should not end with a carefully worded tenancy agreement.
In the summer months, it is important to educate tenants on the fire risks they might face when out on their balconies. Communications might include letter drops, articles, websites, newsletters, e-bulletins or social media.
What lies ahead?
As developers, registered providers and property owners build upwards to help ease Britain’s housing shortage, an increasing number of tenants will see their balcony as their only outdoor space.
Current understanding is that there will be continued growth in the number of high rise type developments, including potential upward extension to existing structures. In London alone, more than 250 tower blocks of at least 20 storeys are reportedly in the pipeline.
As this trend continues, it is essential that those responsible for designing, building and maintaining properties combine education of residents with sound design principles to minimise the risk to people and property.