For many of us, insurance renewals are automatic. This applies
to our business, professional and liability insurance as much as it
does to our motor vehicle, house and contents insurance.
But they are all matters that should be considered a little
further. After all, if the unthinkable does happen, it may well be
that insurance is the only thing between you and bankruptcy.
In relation to business insurance, have you considered whether
the policy actually addresses the type of business that you
undertake, as opposed to the type of business that your insurer or
broker, with the best of intentions, thinks that you undertake?
Have you actually discussed with your broker what you do, how much
time you spend with customers, whether they rely on advice you give
as opposed to products that you sell, and the like?
The distinction between public liability (which can often
include product liability) insurance on the one hand, and
professional indemnity insurance (which usually relates to advice
of some form) on the other can be significant, not only in terms of
coverage but also in terms of premium, indemnity period and the
Equally, have you considered whether your broker and/or insurer
will allow you to have a say in how claims are dealt with? Have you
considered whether you would have the right to talk to your insurer
and their lawyers about the way in which claims made against you
should be dealt with?
Imagine a situation where you are chasing a client for an
outstanding debt, and they respond with a claim against you for
negligent advice and/or provision of defective products which cause
them loss or damage. Who will represent you in your claim against
them for your outstanding fees? Will it be lawyers of your
choosing? Do you have the ability to instruct the same solicitors
as the insurer is using to defend the claim that is being made
against you, hence reducing costs and time?
All of those factors are matters that should be taken into
account in considering what to do when it comes time to renew your
insurance. And that is before you even get to consider the question
of the premium cost (which, lets face it, is what most of us would
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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Contractors and principals should ensure they have appropriate insurance coverage instead of relying on indemnity clauses.
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