Business Insurance Question

thehullram

Advice needed please

Need some help. I'll give you the quick version. I am part of a not for profit sports club and we took out insurance for 2012 (starting 1st Jan) for a total of £7000. We filled out all of the relevant DD information to pay by 12 monthly installments. We received the years VAT invoice that went into the monthly accounts. On 12th Dec 2012 we received a phonecall to say that they had made a mistake and not take any money by DD. They said they would get back to me with what would happen next. In the meantime I spoke to 3 different insurance specialists who all independently told me that they thought that if there had been a claim the insurer would have refused to have paid out. The insurers are disputing this and threatening legal action. I am more than happy to work out a payment plan with them if we had cover throughout last year, however, I don't know how I can prove or disprove this? I don't want to pay out £7000 for nothing.

Any help much appreciated.

dacouch

Could someone apart from me answer this query as I directed the OP here from another section of MSE and they want a second / third opinion to mine.

Thanks

rs65

If a claim occurred, they would have asked you for the premium and paid the claim.

You have had the cover - you should pay the premium.

I doubt it was a VAT invoice but an invoice went through your accounts so there should be no problem paying it.

dacouch

rs65 wrote: »

If a claim occurred, they would have asked you for the premium and paid the claim.

You have had the cover - you should pay the premium.

I doubt it was a VAT invoice but an invoice went through your accounts so there should be no problem paying it.

There could be an element of the premium for inspection / engineering hence a VAT invoice.

rs65

dacouch wrote: »

There could be an element of the premium for inspection / engineering hence a VAT invoice.

Ah, of course. I'm used to people mistaking IPT for VAT.

thehullram

Thanks for your replies. As I said in my initial message I spoke to 3 people all who work in business insurance and all said they would have thought the underwriters wouldn't have paid.
If we do have to pay (which it looks like we might) do you think that we should be offered a payment term? They are trying to get all £7000 out of us in 7 days or face legal action. We simply don't have the money for this. As soon as we found out, we also took out new insurance to ensure we were covered, so will therefore be double paying for a certain time period. Should this be taken into account? They have admitted it is their error, I just can't believe they didn't know for 11 out of the 12 months!!

hugoshavez

thehullram wrote: »

Thanks for your replies. As I said in my initial message I spoke to 3 people all who work in business insurance and all said they would have thought the underwriters wouldn't have paid.
If we do have to pay (which it looks like we might) do you think that we should be offered a payment term? They are trying to get all £7000 out of us in 7 days or face legal action. We simply don't have the money for this. As soon as we found out, we also took out new insurance to ensure we were covered, so will therefore be double paying for a certain time period. Should this be taken into account? They have admitted it is their error, I just can't believe they didn't know for 11 out of the 12 months!!

Almost definitely, given the sum. You might even be able to negotiate a lower amount if you plead poverty.

dacouch

thehullram wrote: »

Thanks for your replies. As I said in my initial message I spoke to 3 people all who work in business insurance and all said they would have thought the underwriters wouldn't have paid.
If we do have to pay (which it looks like we might) do you think that we should be offered a payment term? They are trying to get all £7000 out of us in 7 days or face legal action. We simply don't have the money for this. As soon as we found out, we also took out new insurance to ensure we were covered, so will therefore be double paying for a certain time period. Should this be taken into account? They have admitted it is their error, I just can't believe they didn't know for 11 out of the 12 months!!

So one of the people who advised you that you would not be covered is the guy who sold you the new Insurance.

I'm still surprised two other people who work in business insurance miss informed you. It's well known in the industry that the Insurer will pay valid claims in these circumstances but will obviously want to make some sort of arrangement on the premium.

Generally the Insurer would reschedule the instalments over the rest of the term so you pay less instalments but at a higher amount. As you've taken cover out with someone else they won't be interested in offering this as the instalments (Loan) is secured against the insurance eg they cancel it if you default on the payments.

The guy who sold you the alternative cover has in effect told you don't worry about the original company you won't need to pay it, take out this cover instead.

Unfortunately the original company will pursue you for the premium, depending on what sort of policy it was, they may allow you to cancel the cover from now which would just mean you owe them for the period from the start until now. Although some business policies have no refund if you cancel so if it's one of these policies you would owe the entire premium.

Is it possible you can cancel the new policy, swallow the cancellation charge and then arrange a payment plan with the original company?

Which dodgy broker told you this and sold you another policy? If you don't want to publish it on MSE send me a personal message.

rs65

thehullram wrote: »

I just can't believe they didn't know for 11 out of the 12 months!!

Presumably you did notice that £600 a month wasn't leaving your account?

dacouch

Who was the original Insurer?

What sort of policy was it eg a combined business policy or was it a combined liability policy?

thehullram

Thanks for your messages. We only had 'double insurance' for 2 weeks as we only found out 3 weeks before the end of the insurance. We had already agreed to move insurance as it is £1300 cheaper. The unpaid insurance finished on 31st Dec 2012.