Business Insurance Question

thehullram

dacouch wrote: »

Who was the original Insurer?

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

It just says 'commercial combined'

Sally_A

Should a claim have occurred in those 12 months, you would have been waving around the letters you've recieved confirming cover renewed, and copies of the instalment form you completed.

Don't forget under the liability section, there may still be claims occurring for that insurance period for up to 6 years for property damage.

£7000 is no mean sum for a non profit sports club, so am guessing you aren't the Nempnett Thrubwell Tiddlywinks team, and your policy is covering buildings, EL, PL and possibly Personal Accident.

For a club paying that sort of dosh, I'd be having serious words with the bookkeeper/accountant for not noticing the lack of payment going out; and as most insurers will mention is that surely you would have budgeted for the cost at the start of the year, so why is your bank account not £7k better off now.

Was the error with the broker, not confirming renewal with the insurer? If so, negotiate with them, and ask them to waive their commission for that year, could easily be £1500 to £2000 .

I think you need to do a bit more digging and find out where the break down in either procedure or communications was, before you plan the next move.

thehullram

rs65 wrote: »

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

We didn't. We have about 50 DD's set up on this account. Our accounts lady put the invoice in January P & L for the full amount and so it was never flagged up as unpaid on our side. It would only have been picked up about a month ago when we were doing our year end accounts.

They picked it up in the last week of November, and told us on the 12th December. The reason that we were given is that they don't accept e-mailed DD forms (even though that was what we were told to do).

We are a not for profit company that lives very much month by month, seeing what upgrades we can make depending on membership etc...

thehullram

Sally_A wrote: »

Should a claim have occurred in those 12 months, you would have been waving around the letters you've recieved confirming cover renewed, and copies of the instalment form you completed. - Quite possibly. What I don't know and am trying to find out is what they would have done. Would they have paid out £2 million if the place had burnt down without us paying a penny?

Don't forget under the liability section, there may still be claims occurring for that insurance period for up to 6 years for property damage.

£7000 is no mean sum for a non profit sports club, so am guessing you aren't the Nempnett Thrubwell Tiddlywinks team, and your policy is covering buildings, EL, PL and possibly Personal Accident. Just buildings and contents

For a club paying that sort of dosh, I'd be having serious words with the bookkeeper/accountant for not noticing the lack of payment going out; and as most insurers will mention is that surely you would have budgeted for the cost at the start of the year, so why is your bank account not £7k better off now. We have had words trust me. Beacuse we didn't know we hadn't paid it we have spent it on essesntial maintenance

Was the error with the broker, not confirming renewal with the insurer? If so, negotiate with them, and ask them to waive their commission for that year, could easily be £1500 to £2000 . See earlier reply re DD mandate

I think you need to do a bit more digging and find out where the break down in either procedure or communications was, before you plan the next move.

Thanks, see answers above

dacouch

It was not clear that the policy was about to expire.

As it's a property policy for a sports club, I assume it Aviva (GA) or RSA and you had been with them for some time.

As Sally mentioned the broker may waive their commission although they will fight tooth and nail not to especially if you've gone elsewhere. Their commission would be approximately 15% of the premium.

Were the instalments handled by the Insurer or by a finance company eg Close etc?

thehullram

This was our first year with the company hence the issue with the DD. We had paid annually previously but couldn't afford it last year, hence the reason why the bookkeeper wasn't really looking for an insurance DD (we hadn't had one before)

Sally_A

Re the building burning down, would they have paid out?

You would have had proof of instruction to renew, hopefully by email to the broker, as a broker I always send a "thank you for your instructions to renew" type email. Maybe they record phone calls? If it had burnt down and you had proof you had instructed to renew either the insurer would pay out, or the broker would have had to dip into their PI policy.

At the end of the day, buildings and contents are not compulsory insurance - however if EL is in that combined policy it is.

If you are confident nothing is going to happen in the year 2012 which could result in a late notification claim, maybe count your blessings at £7k saved - however, I would put in writing the circumstances to your new broker and insurer detailing the mess up; whilst this does not quite come under the material fact of "Have you ever had insurance or renewal cancelled, refused or special terms imposed?" I would want this year of no insurance fully logged and acknowledged - in writing.

thehullram

Hi Sally A,

thanks for this, although I am a bit confused. This wasn't EL just buildings and contents. If they are going to issue legal preceedings within 7 days how have we save £7k? The new insurers know fully what has happened and have recorded it as no insurance for 2012

Sally_A

Sorry, thehullram - didn't realise you'd actually received your documents for that insurance period.

Am guessing this was not insurer instalments, as they would have picked up on it sharpish. The broker should also have picked up on it if it was a finance agreement with an outside provider, eg, PCL, Prompt, Close, the ways these work (a brief outline) is you effectively take out a loan with a bank, the bank pays the broker in full before it becomes due on the brokers statement from the insurers. If the broker was on the ball, they should have spotted this 3 months in, 4 months at the latest, as the insurer would have been screaming for settlement of the annual premium.

In which case, yes, you would be on cover and the broker owes the premium to the insurer (maybe already paid it over) - so is it the broker taking you to court? If so, I'd be asking them to settle for the net amount, ex commission.

rs65

Sally, I would be surprised if a broker funded a £7k premium without a PCL or CPF agreement in place. If they did, they are in a shambles.

The OP said 12 months which made me think it was insurer instalments but I suppose it could be PCL. My experience of CPF is 6 or 10 months.