Business Insurance

Cheillie2020

Hi, 
I'm in the process of setting up a business selling inflatable children's toys to UK customers via a website. 
The toys are manufactured in China. We have had them tested to EN71 Toy Safety Standards, UKCA and CE markings. Been in touch with Trading Standards and all the relevant people who we need to, to ensure we are doing everything correctly. Warning labels, instructions etc. That is all covered and taken care of. 

The sticky subject of product and public insurance seems difficult because of a number of reasons: 
1. being a start up
2. importing from china
3. children inflatable toys (age 3+)

Some brokers haven't even been able to get a policy from the Lloyds market. 

Anyway, today I have been in touch with an online insurance broker. Explained everything over the phone in great detail. Anyway, they provided a quote there and then from a well-known insurance company for £500. 
Being dubious I got him to clarify everything in email confirming that the insurance policy did cover us for the fact of 'import from china' and 'child inflatable toys' along with other areas. 

So my question is... I have been 100% open about the nature of the business and the broker has confirmed that the policy covers all of this...

Where do I stand IF a claim was made and the insurance company turned around and said no we're not paying out. 

I read online that "New rules state that an insurance company can't reject your claim if you took reasonable care to answer all their questions honestly and to the best of your knowledge. If your insurer didn't ask for information, they now say you should have voluntarily disclosed, note that down too."

And can an insurance company pull a policy at any time for no reason? 

Any help or advice would be appreciated. 

Jeremy535897

You need to see the full terms and conditions of the policy you intend to take out. An insurance company may seek to cancel a policy, but that should not invalidate cover for problems arising from when you were covered.

Cheillie2020

I have read through the t&cs document. nothing in there talks about restrictions on certain toys or importing from Asia/China.
Nor does it mention anything about if the products are safe, so how does it know if a company is providing a safe service or product and that it adheres to any laws etc.

If there is nothing in their T&Cs, then surely they have no ground to cancel the policy? 

Also because this is done via an online broker The Insurance Octopus, they are confirming everything is fine and that the insurance company is ok with the cover/policy...but if it turns out not to be and a claim was brought against us, where do we stand? That's the part I'm confused about. 

Jeremy535897

The policy will normally set out what it covers. That will be claims from the public that they suffered loss or harm from the product. Then there will be exclusions. They may be territorial ( a lot don't cover US customers). They may require you to have followed all the laws you have described. They may not cover certain imports. If, having read all of these, you are happy that there is nothing outside your control that could cause them to reject a claim, then so long as you do everything properly, you should be covered. They can withdraw cover in certain circumstances, but should give notice. For more detailed guidance, see:
https://www.handbook.fca.org.uk/handbook/ICOBS.pdf

DullGreyGuy

Cheillie2020 said:

Hi, 
I'm in the process of setting up a business selling inflatable children's toys to UK customers via a website. 
The toys are manufactured in China. We have had them tested to EN71 Toy Safety Standards, UKCA and CE markings. Been in touch with Trading Standards and all the relevant people who we need to, to ensure we are doing everything correctly. Warning labels, instructions etc. That is all covered and taken care of. 

The sticky subject of product and public insurance seems difficult because of a number of reasons: 
1. being a start up
2. importing from china
3. children inflatable toys (age 3+)

Some brokers haven't even been able to get a policy from the Lloyds market. 

Anyway, today I have been in touch with an online insurance broker. Explained everything over the phone in great detail. Anyway, they provided a quote there and then from a well-known insurance company for £500. 
Being dubious I got him to clarify everything in email confirming that the insurance policy did cover us for the fact of 'import from china' and 'child inflatable toys' along with other areas. 

So my question is... I have been 100% open about the nature of the business and the broker has confirmed that the policy covers all of this...

Where do I stand IF a claim was made and the insurance company turned around and said no we're not paying out. 

I read online that "New rules state that an insurance company can't reject your claim if you took reasonable care to answer all their questions honestly and to the best of your knowledge. If your insurer didn't ask for information, they now say you should have voluntarily disclosed, note that down too."

And can an insurance company pull a policy at any time for no reason? 

Any help or advice would be appreciated. 

Only a limited number of brokers can buy from a Lloyds syndicate, if your broker isnt a Lloyds broker they have to go via one. They will be limited by who they have TOBAs with and the Lloyds Broker's interest in trying to place the risk. 

When looking online you need to be careful on if you are reading about consumer or business insurance (SMEs can fit in either camp) as the level of protections for businesses are universally lower than they are for consumers. If you are a business you are supposed to be able to look after your own interests or know you need to pay for expert advice. 

An insurer can cancel a policy in line with the T&Cs of the policy... most allow cancellation with appropriate notice. Clearly if we are talking non-disclosure or fraud then thats different and notice may not be required and it opens up the ability to void the policy. With a cancellation the policy is still live and providing cover until the date of cancellation whereas a void policy means it never existed. Liability insurance, like PL, is written on a date of loss basis so if a customer had an accident in January and your policy is cancelled in February but you dont hear about the claim until May thats fine, your original policy still covers it as the date of loss is from before the cancellation.

I am however surprised that you struggled to get quotes

amosmosley

Cheillie2020 said:

Hi, 
I'm in the process of setting up a business selling inflatable children's toys to UK customers via a website. 
The toys are manufactured in China. We have had them tested to EN71 Toy Safety Standards, UKCA and CE markings. Been in touch with Trading Standards and all the relevant people who we need to, to ensure we are doing everything correctly. Warning labels, instructions etc. That is all covered and taken care of. 

The sticky subject of product and public insurance seems difficult because of a number of reasons: 
1. being a start up
2. importing from china
3. children inflatable toys (age 3+)

Some brokers haven't even been able to get a policy from the Lloyds market. 

Anyway, today I have been in touch with an online insurance broker. Explained everything over the phone in great detail. Anyway, they provided a quote there and then from a well-known insurance company for £500. 
Being dubious I got him to clarify everything in email confirming that the insurance policy did cover us for the fact of 'import from china' and 'child inflatable toys' along with other areas. 

So my question is... I have been 100% open about the nature of the business and the broker has confirmed that the policy covers all of this...

Where do I stand IF a claim was made and the insurance company turned around and said no we're not paying out. 

I read online that "New rules state that an insurance company can't reject your claim if you took reasonable care to answer all their questions honestly and to the best of your knowledge. If your insurer didn't ask for information, they now say you should have voluntarily disclosed, note that down too."

And can an insurance company pull a policy at any time for no reason? 

Any help or advice would be appreciated. 

It's great that you've taken steps to ensure your products meet safety standards and that you've obtained the necessary certifications and compliance markings. Regarding insurance, it's essential to have adequate coverage to protect your business from unforeseen events that could result in financial loss.

When you purchase an insurance policy, it's crucial to read and understand the terms and conditions of the policy carefully. Ensure that it covers all the risks that your business faces, including import from China and inflatable toys for children aged 3+. You should also ensure that the policy's coverage limits are sufficient to protect your business adequately.

If a claim is made against your business, and the insurance company refuses to pay out, you should first refer to the policy wording to determine the reason for the refusal. If you feel that the insurer's decision is unjustified, you can dispute it by filing a complaint with the insurer. If the dispute remains unresolved, you can escalate it to an independent dispute resolution service or seek legal advice.

Regarding an insurance company pulling a policy at any time for no reason, it's unlikely to happen if you've met all the policy's terms and conditions. However, insurance companies may cancel a policy if the policyholder has breached the policy's terms and conditions, such as failing to pay premiums or providing false information when applying for the policy.

It's crucial to work with a reputable insurance broker and insurer to ensure that you receive adequate coverage and that you understand the policy's terms and conditions. It's also important to ensure that you've provided all relevant information truthfully and to the best of your knowledge to avoid any disputes or issues.