Business Insurance

Trebormint

I was wondering if anyone could help.

I was self employed but have recently been injured, and as a result will not be able to work anymore. I currently have business insurance with Hiscox and they sent me a renewal premium. I decided to speak to someone to advise of my injury and that this insurance was no longer required and they said that if any claims were made against me after my policy was cancelled I would not be covered, but as I suggested I wasn't going to be able to work this didn't seem to be an issue on the surface of things. However they then advised that this related to any work that I had been involved with since I became self employed, so effectively stated that if a claim was bought against me related to work covered during the period I had insurance I wouldn't be covered!!!!

I effect unless I retain cover with Hiscox effectively for the rest of my life, any potential claims are not covered.

Whilst it is unlikely that a claim will ever be made against me, this seems wrong as I have paid for insurance for the work I was delivering (IT), and now feel trapped by the insurance policy for life (indemnity insurance).

Can anyone advise please as I feel that this policy has potentially been misleading or at worst mis sold, and wondered if anyone else had come across this issue and or suffered as a result.

Cheers

paddyandstumpy

Why is it misleading or missold?

Indemnity insurance covers you on a 'claims made' basis, so if you don't have cover when a claim is made then there is simply no policy to respond to.

Are you a Ltd company?

csgohan4

So the policy has no run off sadly even for a premium insurer

Quentin

Whenever you are not happy with your insurer the route to take for the definitive solution at no cost to you is a formal complaint in line with their complaints procedure.

Then if you are not happy with the reply or they ignore you for 8 weeks you can escalate to the FOS for their adjudication at no cost to you

After that if you are still unhappy then you have legal action to consider. But then costs would come into it were you to lose

paddyandstumpy

csgohan4 wrote: »

So the policy has no run off sadly even for a premium insurer

I thought run off cover was always paid for separately? I've not heard of a policy which will continue to provide exposure after the policy period... if the OP asked for run off cover I'm sure Hiscox would do this.

Quentin wrote: »

Whenever you are not happy with your insurer the route to take for the definitive solution at no cost to you is a formal complaint in line with their complaints procedure.

Then if you are not happy with the reply or they ignore you for 8 weeks you can escalate to the FOS for their adjudication at no cost to you

After that if you are still unhappy then you have legal action to consider. But then costs would come into it were you to lose

just to clarify the FOS are for consumers and small businesses, so not all commercial insurance can be complained about to the FOS. It depends on how the OP is defined.

My initial question about if the OP is a limited company remains valid, if he is, and doesn't renew PI cover, any recourse from his customers would be against the Ltd and not personally.

Quentin

The OP tells us he was " self employed"!

Trebormint

Yes the company was limited.

From memory there was no indication during the 'sales pitch' phone call made with Hiscox to advise of the processes and policy behind indemnity claims and without that I am assuming the policy was mis-sold. I have asked for a copy of the phone recording for completeness.

It seems me that unless I continue with run off cover, there is a risk that a claim against me (unlikely) could occur 30 years from now and I won't be covered. For me I guess insurance cover is about being covered for an incident that occurred at the time cover was in place, not retrospectively, just don't feel right and very much stacked in favour of the insurers!!

dunstonh

It is normal for indemnity insurance to cover you only if you are paying premiums. Once you stop paying, if a claim against you comes in after that event you will not be covered.

If you change providers periodically, the new provider takes on the liability for all your historic stuff. Not the insurer that was in force the year you did whatever you did.

When you cease trading and close the limited company, you do not need run off cover. if you were self-employed or a partnership or you intend ot keep the limited company open, then run off cover would be available as a separate policy.

It seems me that unless I continue with run off cover, there is a risk that a claim against me (unlikely) could occur 30 years from now and I won't be covered.

its not against you. its against the limited company. if the limited company is closed then the claim cannot be made against you.

By referring to yourself as self employed (which you were not as a limted company) you may have caused some confusion with the insurer.

For me I guess insurance cover is about being covered for an incident that occurred at the time cover was in place, not retrospectively, just don't feel right and very much stacked in favour of the insurers!!

That is an incorrect assumption of how it works.

Quentin

Were you initially self employed then formed a limited company?

Or working for your limited company from the outset?

You will see the issue this could cause if that was the scenario

Dangermac

Trebormint wrote: »

I was wondering if anyone could help.

I was self employed but have recently been injured, and as a result will not be able to work anymore. I currently have business insurance with Hiscox and they sent me a renewal premium. I decided to speak to someone to advise of my injury and that this insurance was no longer required and they said that if any claims were made against me after my policy was cancelled I would not be covered, but as I suggested I wasn't going to be able to work this didn't seem to be an issue on the surface of things. However they then advised that this related to any work that I had been involved with since I became self employed, so effectively stated that if a claim was bought against me related to work covered during the period I had insurance I wouldn't be covered!!!!

I effect unless I retain cover with Hiscox effectively for the rest of my life, any potential claims are not covered.

Whilst it is unlikely that a claim will ever be made against me, this seems wrong as I have paid for insurance for the work I was delivering (IT), and now feel trapped by the insurance policy for life (indemnity insurance).

Can anyone advise please as I feel that this policy has potentially been misleading or at worst mis sold, and wondered if anyone else had come across this issue and or suffered as a result.

Cheers

You have not been mis-sold. Such a sad state of affairs when the default position for so many people is an accusation of mis-selling. Just human nature in this country now I guess. Always someone else's fault.


Every insurance policy has a trigger. Something that triggers a claim. In the UK, most policies of the same type/genre, tend to be triggered in a very similar way.


For example:


Property Insurance is the day when damage to the property occurs


Public Liability is the day when damage/injury occurs (may not be the same day/month/year when work is undertaken). Known as 'Losses Occurring' trigger.


Professional Indemnity is the day that you make the claim again the policy. Known as 'Claims Made' trigger. Could be a long time after the work was undertaken. Many professional indemnity claims are (very) latent (i.e long after the work was undertaken). And potential liability can exist for many years after the business has ceased trading.


You will need to evaluate the potential risk, whether the business is within a Limited Company (therefore shields you personally from much risk) etc etc


You need to discuss this with your insurance provider to ascertain the options


DM