The insurance industry pays out billions in claims every year. It also rejects billions too.

• £5.8 billion claims paid, Business Property, Liability & Commercial Vehicle (ABI 2011)
• Estimated 30% of all claims rejected (£2.49 billion)

I t’s a sobering thought that nearly a third of claims are rejected. Couple that with 50% of the claims accepted being reduced for inadequacy of sums insured and there are a lot of businesses walking a tightrope. There are a number of reasons for the declinature of a claim, with some of the key ones being non-disclosure, breach of warranty, incorrect cover and inadequate sums insured. All of which could be prevented with the right advice and guidance from a skilled professional advisor.

In addition, in excess of 50% of businesses who suffer a major loss fail to recover. Having adequate business interruption insurance is one of the main factors in ensuring a business not only continues trading but fully recovers to the level prior to the loss. In our experience, this is an area where we frequently identify gaps in cover and areas for concern. All these facts highlight the importance of selecting the right broker and getting the right support and advice to ensure the policy performs when called on. In addition, the security of a Bank’s debt could be prejudiced if failure to identify, eliminate or transfer risks effectively 2XL Commercial works with a number of commercial insurance brokers ensuring you get the best and most appropriate cover for your particular need.

These have a range of services available at no cost or obligation that provide a valuable insight as to how a policy will perform in the time of need, providing peace of mind and protection for you and your clients. Bearing in mind the facts about the volume of repudiated and adjusted claims, an insurance due diligence review for businesses of a certain size can potentially save a business in the event of a loss. These services include advice and recommendations on:

• The adequacy of the existing covers for trading liabilities and protection of assets.
• Adequacy of business interruption.
• The cost effectiveness and value provided by the covers in place.
• Future proofing the cover for all business plans and developments.
• Errors and omissions that could result in losses / claims not being met under your existing arrangements.
• Terms, conditions and warranties.
• The suitability and security and ability to pay claims of the existing insurers.
• Security and health and safety.
• Claims trends and potential protective measures.

Key triggers for a review

In addition to reviewing your portfolio, there are a number of triggers to look out for which should lead to the need to review your client’s existing insurance arrangements.

These include:

• New funding
• Purchase of additional machinery/ physical assets
• Premises moving / additional / expanding
• Change of Directors
• New markets / new products / new territories
• Increase/decrease in turnover
• Growth plans
• Claims
• Mergers and acquisitions
• Disposals

I think we would all agree this is food for thought If this is something you would like to discuss further or you would like to arrange a no obligation quote, then get in touch with us and we will be more than happy to facilitate an introduction.