Robison & Co

Cyber

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Under-Insurance

Understanding and Preventing Under-Insurance

Under-insurance occurs when a policyholder’s insurance coverage is insufficient to meet their needs. This can result in a claim amount that exceeds the maximum payout the insurance company will cover. Consequently, the policyholder may face a shortfall, leading to significant financial losses for the organisation. To avoid this, it’s crucial to take proactive measures. Here are six effective ways to prevent under-insurance:

Regularly Value Business Assets Accurately

It’s essential to frequently assess the value of your business assets to ensure your insurance coverage remains adequate. While businesses can perform these valuations themselves, hiring a professional can provide a more precise assessment.

Provide the Correct Rebuilding Cost

When insuring your property, always provide the insurer with the cost of rebuilding it, not its market value or the original purchase price. The rebuilding cost ensures your coverage reflects the actual expense of restoring your property in case of damage.

Calculate and Report Actual Total Revenue

To ensure adequate coverage, calculate your actual total revenue and report this figure to your insurance company. Accurate revenue reporting helps the insurer assess potential risks associated with your operation and provide appropriate coverage.

Determine an Appropriate Indemnity Period

Select an indemnity period that allows your business sufficient time to recover from any incurred loss. An appropriate indemnity period ensures you have enough time to restore operations without financial strain.

Increase Sums Insured in Line with Inflation

Regularly adjust your sums insured to keep pace with inflation. This practice ensures that your coverage remains sufficient to meet rising costs over time.

Review and Update Your Policy Wording

Periodically review your policy wording to ensure it offers the broadest cover for your needs. Update the policy whenever there are significant changes in your business to maintain comprehensive protection.

 

By taking these steps, businesses can significantly reduce the risk of under-insurance and ensure they are adequately protected against potential financial losses. Regular evaluations, accurate reporting, and proactive adjustments to insurance policies are key to maintaining sufficient coverage and safeguarding your business’s financial stability.

 

To discuss a new policy, or current policy  please get in touch with us via one of the options below!

Book a call        01730 265500        Contact request form        hello@robison.co.uk

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Cyber Insurance – Why do you need it for your business?

WHY DO YOU NEED CYBER INSURANCE FOR YOUR BUSINESS?

Cyber Insurance protects your business from a wide range of cyber threats, which is extremely important in todays digital age. It is also important and beneficial to have preventative measures in place within your business to prevent cyber attacks, however, insurance is a crucial layer of security.

What are the benefits of Cyber Insurance?

Cyber Insurance policies are created to suit your needs and offer a number of important benefits, which may include the following:

Business interruption loss:

If your organization experiences an IT failure or cyber-attack that disrupts your business operations, your insurer may cover your loss of income during the interruption. Increased costs to your business operation in the aftermath of a cyber-attack may also be covered.

Privacy breach costs:

Policies will either have a single clause or be split into two separate clauses: breach costs and privacy liability. A breach costs clause provides cover for costs that arise from dealing with a security breach, such as notifying customers. A privacy liability clause provides cover for privacy infringement claims and associated legal costs in the event of a breach, which is critical for all organizations that handle or store personal information.

Cyber-extortion:

Your policy may cover you in the event that your organization is infected by ransomware or any other malicious software that attempts to seize control of, and withhold access to, your operational or personal data until a fee is paid.

Digital asset replacement expenses:

In the event that your digital assets are lost, corrupted, or altered by a cyber-criminal, this coverage can help mitigate the costs.

Media liability:

Protection against claims resulting from libel, slander, defamation, or infringement of intellectual property rights.

Forensic support:

24/7 support from cyber-specialists following a hack or data breach.

Reputational damage:

Coverage for lost profits due to cyber-attacks.

Management liability:

Covers costs associated with defending senior management from cyber-attack fallout.

*This is a general overview, and specific policy details may vary*

To discuss a new policy, or current policy please get in touch with us via one of the options below!

Book a call        01730 265500        Contact request form        hello@robison.co.uk

 

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FCA TEST CASE – COVID-19 Losses – Supreme Court Decision announced today.

The Supreme Court judgment in the FCA Business Interruption Test Case was published today. The full judgment together with a copy of the FCA’s press release is available here.
 

In concert with our Network provider Marsh and specialist Law Firm Fenchurch Law, we are reviewing the content of the judgment in detail. However, the key message is that the Supreme Court substantially allowed the appeal of the FCA on behalf of policyholders and dismissed the appeal brought by insurers. Notably finding the following:

  • Notifiable Disease Clauses – while the Supreme Court took a different approach to the High Court, it confirmed that all the disease clauses before the Court were triggered;
  • Prevention of Access / Hybrid Clauses – cover under these clauses still faces challenges but may be triggered more readily. No requirement for a legislative step ordering closure and potential cover for loss of access to part of premises;
  • Trends Clauses – the Supreme Court was clear that trends clauses can only take into account factors wholly unrelated to COVID-19 and rejected the “wide area damage” arguments of insurers;
  • Orient Express – the Supreme Court determined that the Orient Express case was wrongly decided and that it should be overruled. This decision therefore has positive consequences for insureds beyond the scope of COVID-19 claims. 

Next steps
We expect to be able to issue a further communication next week, to provide more detail about the key findings in the judgment and we will let you have further details when we are able. Please speak with your Account Executive if you have any questions or concerns regaring the implications following this judgement.

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10 COVID-19 related insurance tips for SME’s

Over the last few months, we have released a number of updates relating to the insurance implications of the COVID-19 pandemic. Now that we are back in Lockdown 2, I thought it timely to  bring an excellent summary to your attention that our industry body BIBA have released in conjunction with the CBI and the ABI. It’s a very concise and informative document which highlights 10 keys issues for anyone involved in running a business. I would encourage you to follow the link HERE. Please make contact with us if you need to discuss your own circumstances.

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FCA Test Case

The FCA have taken their next step to seek legal clarity on Business Interruption Insurance following the COVID-19 crisis. Why are the FCA taking this step? Broadly, the result of the test case will be legally binding on the insurers that are party to the case and it will also provide a persuasive case for similarly worded policies. If you would like to read a summary report, please click HERE for an article we have copied on Linkedin. For a more in=depth report including the particulars of the claim and some policy wording examples from the FCA website please click HERE