Navigating insurance claims

Making an insurance claim should be relatively straightforward, but there are things that can complicate the process. Delays in the resolution of a claim can cost a park business money. In the worst-case scenario a claim may be rejected altogether. The following top tips from Compass illustrates what park owners and managers can do to ensure that their claims experiences run as smoothly as possible.

Read your policy!
Different providers offer different covers and all insurers revise their policies from time to time, so it’s important to check:
•    policy terms, conditions, excesses, restrictions and inner sub limits
•    the accuracy of your Sums Insured amounts - If you’re not confident to make a valuation of your business assets, the best people to advise on re-building costs are RICS qualified quantity or building surveyors 
•    automatic reinstatement of Sums Insured after claim.

Claims service
Some providers are much better than others at responding to claims, especially under emergency conditions. Consider:
•    reputation – ask other park owners and managers which providers they would recommend for their claims service
•    insurers that run a UK-based dedicated in-house claims team, manned by trained and experienced specialists
•    insurers that offer a 24/7/365 emergency response service
•    insurers with strong experience of managing worst-case (disaster) scenarios
•    insurers that have access to a wide network of the specialist service providers and suppliers that may be required to resolve your claim
•    those who employ AEs - a good insurance account executive (AE) will help in terms of claims delivery, especially in an emergency. 
•    those that may be able to make interim/advanced claims payments for large-scale, expensive claims. 

Keep in touch
It’s very important to let your insurer know about any changes made to your business as and when they occur to avoid under-insurance (see more information below). A good rule of thumb is to always tell your insurer what you tell your Insurance claimsaccountant. 

Speed and evidence
The sooner you let your insurer know about a claim the better. Find out who you will need to contact, how to contact them, and any relevant timescales. The more information you can provide your insurer with in relation to a claim the better. Do what you can to help by taking photographs, gathering witness statements, recording the time, location, weather conditions, keeping damaged goods, etc. Your insurer will be able to elaborate on this basic list on a case-by-case basis. 

Keep up-to-date records
Parks need to understand their legal responsibilities and keep evidence to show that they are adhering to them. If this evidence isn’t up-to-date and available, an insurer may be unable to defend a park business against a claim. And while we’re talking about record-keeping, ensure your insurance policy documents are kept safe and in a location where they can be accessed by relevant staff members as required. 

Sensible business management
Sometimes it’s easier for a park’s maintenance team to manage remedial/reparation works. Keeping spares of parts and equipment that is vital to day-to-day operations, especially when these items cannot be quickly replaced, is also practical.  

Consider additional cover
Protecting yourself, your staff and your business against claims won’t always begin and end with a commercial policy. It will sometimes be appropriate for a park to take out additional covers, e.g. Business Interruption and Directors’ & Officers’ cover. Speak to your provider for more information. 

Don’t under-insure!
Whether deliberate or not, park owners and managers need to be aware that if they are under-insured, their insurer will not automatically pay out the full cost of a claim. Instead they may apply a calculation which reduces the claim amount by the percentage they were under-insured by. 

For example, if a building is insured for £200,000, but its true rebuild cost is £400,000, an insurer will be quick to identify the fact that the building was only insured at 50% of its value. This means that only 50% of a claim may be met in the event of a loss.

There are any number of ways that a park could find itself under-insured. Examples include:

•    if you haven’t had your park’s material assets professionally valued for insurance purposes in the last three years
•    you are now VAT registered
•    you are carrying more stock now than when you took out your insurance policy
•    you’ve altered or extended your park premises
•    you haven’t factored in replacement costs for (e.g.) gates, fences, car parking areas, roads and pathways etc.
•    you haven’t factored in the costs of professional fees such as an architect or surveyor
•    you haven’t factored in costs such as site clearance or access – particularly where your business might need, for example, a crane of heavy plant to help with remedial work because of the claim. 

As aforementioned under-insurance can present itself mid-term. Keep your insurer up-to-date to avoid this. 

Beware the impact of customer claims

Park businesses shoulder an element of risk when it comes to their customers’ insurance cover. The bigger a customer’s loss, the bigger the potential impact upon the park business. In the worst-case scenario, where total losses occur and multiple insurance providers are involved, a park’s operations can be severely affected. 

The way in which some parks try to take some control over their destiny in this regard is to become an appointed representative or introducer appointed representative of an insurer provider they trust. This allows them to respectively sell or introduce an insurance product to their customers within the parameters of financial regulation. 

For further support on preventing claims and to hear more about our market leading 24/7/365 Major Incident support, please contact the Compass team on 0344 274 0277.

 

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November 25, 2019

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