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Defective Design Exclusions

Posted on: November 21, 2018
Categories: General, Technical

By Emma Hughes, New Business Broker

The majority of Contract Works policies will look to exclude damage to property which is in a defective condition but will provide cover for other parts of the property which are damaged as a consequence of this defect. Insurers apply this exclusion in the form of a Defective Design Exclusion, tiered from DE1 (lowest level cover) to DE5 (highest level cover).

DE1: Outright Defect Exclusion
Excludes all losses arising from defects in the Design, Workmanship or Materials.

DE2: Extended Defective Condition Exclusion
Excludes property which is defective and property which relies for its support on property which is defective but covers other insured property which is damaged as a result of the defect.

DE3: Limited Defective Condition Exclusion
Excludes property which is defective but covers other insured property which is defect free and is damaged by the defective property

DE4: Defective Part Exclusion
This is similar to DE3 but the exclusion is restricted to apply only to any ‘component part or individual item’ which is defective eg. Only the defective nut, bolt or screw would be excluded.

DE5: Design Improvement Exclusion
Provides full cover for both the defective and non-defective products but damage must occur. The existence of a defect alone is not insured. The costs in improving the design, materials and workmanship are excluded.

Example:
A steel framed building collapses during the construction period due to the connective bolts being inadequate for their purpose. The building collapses after the roof has been erected, the cladding has been partially completed and a dwarf brick wall has been built. The various Defect Exclusions would pay as follows:

DE1: All damage would be excluded
DE2: All damaged items are excluded apart from the Dwarf Brick Wall
DE3: Steel Framework is excluded but the Roof, Cladding and Brick Walls are paid for
DE4: Only the Nuts & Bolts are excluded and all other damage is paid for
DE5: All damage is paid for but improvement costs are excluded

The most common level of cover found in a Contract Works policy is DE3 and there may be an option to uplift cover to DE4/DE5 if requested. As you can see from the above example it is prudent to ensure you have DE3 coverage as a minimum. Defective Design Exclusions should not be confused with Professional Indemnity insurance. Professional Indemnity would provide cover if the design was found to be defective but no damage had occurred.

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The Impact of Catastrophic Claims on UK Businesses

Posted on: November 14, 2018
Categories: Liability, Technical

By Emma Hughes, New Business Broker

In February 2017 the Lord Chancellor amended the Ogden Discount Rate from 2.5% to -0.75%. This change has brought in to question whether businesses are adequately covered in the event of a catastrophic and complex injury claims.

The Ogden Discount Rate is used by UK Courts when calculating compensation in personal injury claims, the intention is to put the claimant in the same financial position had they not been injured. The Discount Rate reflects the additional earnings the claimant would make from low-risk investments and deducts this from the overall settlement. Since the economic crash in 2008 investment returns have tumbled, leading to the Lord Chancellor changing the rate of discount from 2.5% to -0.75%. Although a change of 3.25% may not seem too significant, in the case of catastrophic claims this can lead to substantial settlement costs.

For example, a Male aged 21 years old with a life expectancy of 87 years suffers a serious head injury resulting in needing 24 hour care. Under the previous 2.5% Ogden Discount Rate he would expect to receive £15.1 million in compensation. However, with the reduced Ogden Discount Rate of -0.75% this skyrockets to £29.3 million.

As you can see from this example, the rate change leaves all businesses vulnerable to underinsurance, not just industries partaking in high hazard activities. It is therefore important that you put measures in place to protect the balance sheet of your business. The standard limit of indemnity for Employers Liability given in the UK is £10,000,000. In the event of a serious injury, as per the above example, the standard indemnity for Employers Liability would leave a £19.3 million shortfall in cover. In this instance the Courts will look to the business assets to compensate the claimant. If your business is a Partnership, Limited Liability Partnership or Sole Trader then they can pursue your own personal assets.

The best and most cost effective way to protect your business is by increasing the limits of your Liability insurances. Your broker should be able to provide you with indications for increasing your limits, the additional premium often being minimally priced in comparison to the underlying policy.

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Seasonal Stock Increases

Posted on: November 6, 2018
Categories: Client, Trends

By Emma Hughes, New Business Broker

The final quarter of the year brings about increased levels of activity within the retail sector. The surge in consumer demand sees the stockpiling of goods, greater number of staff and longer working hours. During this hectic time it is unlikely you will stop to think; am I covered for this?

Check and Don’t Chance

You may find that the increased stock you are holding over the festive period leaves you open to underinsurance. In the event of underinsurance the insurers will apply the clause of Average. The clause of Average influences how much of a claim will be paid. For example, if you have insured your stock for £10,000 but during the month of December this increases to £20,000 then the Average Clause would be applied and any claim would be reduced by 50% in-line with the underinsurance.

Some Insurers may offer a ‘Seasonal Stock Increase’ extension to their Retail packages. This extension offers a discretional increase of 20% to 30% typically during the busier months. It is important to check whether this extension is included and whether the uplifted sum is adequate to cover your increased exposure. If you are unsure then it is best to make insurers aware immediately of the change.

It is also important to make insurers aware of any other changes that may happen over the festive period; from Santa Clause meet & greets to the loaning of a Fork Lift Truck in order to move stock more easily. Anything that is out of the ordinary for your business needs to be disclosed to insurers.

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Treats Not Tricks This Halloween

Posted on: October 31, 2018
Categories: General

By Emma Hughes, New Business Broker

Between Halloween and Bonfire Night Britain’s streets see a spike in anti-social behaviour and property damage. Unfortunately some members of the community see this time of year as an excuse to cause a nuisance. Although it is impossible to completely alleviate the issue, here are a few steps you can take to protect yourself and your property.

Friends & Family Try to avoid trick’or’treating at houses you do not know, people are often worried about opening their door to strangers at this time. Call on friends, family and neighbours that will be expeting you. Alternatively a street party is a great way for the community to come together and enjoy Halloween safely.

Remove the Temptation Make sure that your external property is free from any disused furniture, wood, wheeliebins or other flammable objects. It is best to make sure that your neighbours are preparted too.

Communication If you feel that you have been targeted in the past or you have seen a potential incident remember to keep in contact with your local community support officers.

Out of Sight Vehicles bear the brunt of the anti-social spike, if possible try to keep your vehicle housed in a garage or on a driveway. If this isn’t possible make sure it is parked on a well-lit residential street, preferably within sightlines of your home.

 

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Five Tips To Stay Safe On The Road This Winter

Posted on: October 26, 2018
Categories: Client, Community, Erimus IB, General, Technical, Trends

By Emma Hughes, New Business Broker

As we say goodbye to our glorious summer it is time to start thinking about winter and how to keep yourself and loved ones safe on the roads. The clocks going back signals the start of dark evening commutes, increasing road accidents between the hours of 5pm and 8pm by 34%. With this in mind we have put together 5 top tips to ensure you are prepared for winter driving.

 

Lights Make sure that your headlights are free of dirt, switched on and in good working order – no matter the time of day. The darkness coupled with adverse weather conditions means visibility is reduced and the likelihood of an accident increases.

Speed Inclement weather and poor visibility means that you may have to react quickly to unforeseen situations, try to keep below the speed limit allowing for easier adaptation of speed. You should aim to maintain a moderate and steady speed.

Pedestrians Although your lights may be in tip-top shape be aware that others, particularly cyclists and pedestrians, may not be as well prepared. Darker clothing and no lights can make people difficult to spot so be vigilant.

Tyres Seasonal hazards such as slippery leaves, mud and ice can be treacherous so make sure that you have checked your tyres. If they are looking borderline then don’t risk it, get a new set and consider investing in specialist winter tyres.

Visibility The low winter sun and headlights can cause glare; avoid excessive glare by keeping your windscreen clean (inside & out) and making sure your wiper blades are in good working order. Also, make sure your windscreen wash is topped up regularly with anti-freeze solution.

 

For further information see Insure The Box’s full study: https://www.insurethebox.com/beware-fright-night-as-the-clocks-go-back-this-weekend/

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What Does Cyber Insurance Mean To You

Posted on: October 24, 2018
Categories: Industry News, Technical, Trends

By Emma Hughes, New Business Broker

‘Cyber’ is an emerging risk and SME businesses need to be aware of the level of exposure they face.  Typically a business would want to protect their physical assets but when it comes to cyber you are insuring the intangible – data, customer information, and intellectual property. Arguably data or information has become one of the most important assets to a business and worth many times more than the physical equipment it is stored upon.

There is no doubt that the implementation of GDPR in May 2018 shone a spotlight on the growing need for cyber insurance with 66% of organisations more concerned about their cybersecurity than they were a year ago. Despite growing concerns 43% of British SMEs admit to having no business continuity, disaster recovery or crisis management plans in place. In order for these businesses to create a thorough business continuity plan they must first understand and identify the risks they face.

After the catalyst of GDPR businesses are now beginning to address cyber exposures but the focus on data breaches is detrimental in providing a comprehensive cyber risk solution. For example, almost a third of CFC’s (a top UK cyber insurer) cyber claims are a result of the theft of funds, which is a significant risk for almost any business and has been for quite some time.  Cyber insurance goes beyond simply providing cover, ultimately cyber insurance has a role to play in helping businesses to understand where to put their limited IT security spend, and hopefully put it in better, more effective areas.

Cyber-crime is the fastest growing crime in the world, affecting businesses of all sizes and sectors. In Britain 46% of SMEs admitted to suffering at least one cyber security breach or attack in the last 12 months. To illustrate this the insurer Hiscox has set up a typical small business server to record how many attempted cyber-attacks happen in real-time. By mid-day almost 27,000 attacks had been attempted.

https://www.hiscox.co.uk/cyberlive

Every cyber-attacker will have their own purpose ranging from the ransom of data to malicious destruction. Often breaches are not discovered until weeks or months after the event, by then untold damage could have been caused.

Businesses need to start asking themselves what would they do if they found out that they had been the victim of a cyber-attack? WannaCry in May 2017 and NotPetchya in June 2017 raised the question of when businesses are affected, who do they call? There is no state-provided IT security service. Although the UK has the National Crime Agency and GCHQ they are focused on protecting national infrastructure, rather than individual businesses [..] the state has not provided the services to support businesses, and that is what the cyber insurance industry is doing.

The impact of a breach can be felt for many months, even years after an event. Although a system may be back up and running within a matter of days the effects of reputational damage and lost data can be felt long after. Every single breach will be different and there is no ‘one size fits all’ solution. For example a business that receives their income on a contractual basis could be more exposed to long tail financial loss, as the cancellation of monthly or annual contracts could very quickly result in sizeable financial losses being incurred. It is unlikely a traditional business interruption policy would respond in this instance so it will have to be written in to the cyber coverage. Regardless of your business type or size there is an exposure to be mitigated.

Now is the time to start addressing Cyber as a very real and tangible risk to your business. The threat of a cyber-attack is ever growing and it has the potential to impact your business in the same way as fire or flood. Please do not hesitate to contact us on info@erimusib.com or 01642 240400 if you would like to discuss Cyber cover for your business.

 

Blog References:

Graham, Luke. “Cyber Insurance, the Great Fire of London, and the need for digital fire figthers in the modern day” Accessed October 24th, 2018. http://dev2.cityam.com/263335/cyber-insurance-great-fire-london-and-need-digital-fire

CFC News. “Cyber Claims Case Study: Software Shutdown” Accessed October 24th 2018. http://cfcunderwriting.com/media/3219?topic=1

CFC News. “Top Five Reasons To Buy Cyber” Accessed October 24th, 2018. http://cfcunderwriting.com/media/3186?topic=1

CFC News. “2018 Survey Reveals Concern About Cybercrime Continues To Rise” Accessed 24th October 2018. http://cfcunderwriting.com/media/5632?topic=2

Aviva PLC. “Supporting UK SMEs to address vulneratbilities” Accessed October 24th, 2018.  https://broker.aviva.co.uk/news/article/695/supporting-uk-smes-to-address-vulnerabilities/

CFC News. “Beware The Data Breach Bear Trap” Accessed October 24th, 2018. http://cfcunderwriting.com/media/3283?topic=1

 

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Erimus ‘insures’ local golfer gets to China

Posted on: March 26, 2018
Categories: General

By Matthew Doak, Marketing & IT Coordinator

Erimus Insurance Brokers has announced its sponsorship of local professional golfer, Callum Tarren, on his forthcoming China tour.

Living in Darlington, Callum is attached to Rockliffe Hall, and is eagerly anticipating his third China tour, having come seventh and third in his first and second tours respectively. Winning in China would qualify the golfer for the European tour and would help his progress through the world rankings; he is currently ranked 506 and would like to break into the top 100.

Erimus, a member of the Willis Commercial Network, provides commercial and corporate insurance services to businesses of all sizes, from owner-managed SMEs to companies with turnovers over £200m. The Company is a top 100 UK Independent Insurance Broker and offers a unique proposition; the service levels of a small and caring team, with the buying power of a global broker thanks to its Willis membership.

Paul Davison, commercial director, said: “We’re passionate about supporting our local community, and have a keen personal interest in golf too. We have always been a corporate member at Rockliffe Hall, who also support Callum, so all the pieces fit together perfectly.

“Callum has serious potential; we’re delighted to be able to give him the support he needs to get to China and begin to realise his dreams.”

Callum works with golf fitness coach Stuart Parnaby, of Parnaby Performance. This, combined with a healthy lifestyle and five hours’ playing golf per day, has meant that he is in great shape and playing well, which will be put to the test when he plays in the Challenge Tour in Kenya later this month.

Callum, who turned professional in August 2015, said: “It’s really difficult to organise and manage these tours. Other than Erimus’ sponsorship I am entirely self-funded, and it’s expensive; clothing, equipment, travel and hotels – it all adds up. I can’t express how grateful I am for this sponsorship.

“I’m proud to be showcasing the Erimus brand on an international level, and it’s great to be a part of their team. I want to do everything I can to support them, especially given how much they have helped me.”

The first game of the China tour is underway at Hainan Island, Wanning, drawing to a close on 18 March. Callum’s progress can be followed on our Twitter feed @erimusib,

Twitter: @callumtarren

Callum Golf Erimus

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Cyber Security

Posted on: May 16, 2017
Categories: Industry News

By Matthew Doak, Marketing & IT Coordinator

We have received the following advice from our own IT provider and thought it would be useful to share the advice with you in view of the recent increase in Cyber-attacks.

Further to this weekend’s cyber-attacks, we would strongly recommend increased vigilance when dealing with emails over the coming days.

Historically, the virus or malware is contained within an attachment or hyper-link in the body of an email. If you get an email from anyone that has any of the following characteristics,

Unexpected – If you didn’t expect to hear from an old customer, your Bank/Amazon/Apple etc. on your corporate email address

Urgency – These emails often come with a sense of urgency, it is not uncommon to put a line in the email like “Check this invoice now to avoid being billed”

Fear – Sometimes these emails come pretending to be an authority figure, for example a speeding fine or an HMRC notice. They come with links or attachments saying you need to click on them immediately

Greed/Curiosity – Some may use these emotions to trigger a response, offering something of value to anyone who clicks

please do NOT click on any links or attachments. Malicious emails often appear to be from someone you know; the virus ‘steals’ an email profile, however the email itself originates from a completely different email address, for example, erimus.insurance@greedybank.com. Therefore, even though you may recognise the sender’s name, you should also pay close attention to the domain name.

Please ensure that you have downloaded all Microsoft patches to both your server and your PCs and that your anti-virus software is up to date.

If you should encounter any issues, or have any concerns, our recommended course of action is to shut down all PCs and your server immediately, following which you will need the services of a specialist IT company to remove any viruses or malware and to cleanse your network.

Whilst the above advice will help reduce the risk of a Cyber attack to you it does not guarantee you won’t suffer one, the implications of which can be costly to your business as follows:-

• Financial loss to your business
• Costly fines from the Regulator following a loss of data
• Reputational damage to your business
• Business disruption/interruption following an attack

All of these risks can be protected by a comprehensive Cyber Protection Insurance policy. If you have any concerns about your Cyber risk and wish to discuss how you can better protect your business against one please contact us to speak to one of our specialist advisors today.

Ref/source SSP

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Erimus Insurance Continues to Expand

Posted on: November 28, 2016
Categories: General, Press

By Matthew Doak, Marketing & IT Coordinator

Erimus has increased its workforce to 31 with the recruitment of Larissa Mathwin as senior broker and Emma Hughes as new business broker as the firm continues to win business from around the region and beyond.
Click Here to read more.

erimus-md-paul-davison-centre-with-new-recruits-emma-hughes-left-and-larissa-mathwin

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Preparation for Fair Presentation under The Insurance Act 2015

Posted on: June 17, 2016
Categories: Industry News

By Mike Bailey, Technical Broking Consultant

The Insurance Act 2015 comes into effect on 12 August 2016. The purpose is to update the law which is now over 100 years old in order to reflect the way that the insurance market has changed over this time and to achieve a fair balance between insurers and their commercial (“non-consumer”) customers.

The Act concerns the following areas:

• Duty of fair presentation
• Knowledge of the Insured and Insurer
• Remedies for breach of duty of fair presentation
• Warranties and other terms
• Remedies for fraudulent claims

In this communication we are concerned with fair presentation, what constitutes knowledge and remedies for the breach of the duty.

Click Here to read more.

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mercedes benz retail corporate sales

TIC and Erimus Insurance Brokers are delighted to announce that Mercedes-Benz Retail Group trading as Corporate Sales have agreed access for all TIC and Erimus's customers to preferential rates and terms for the supply of new Mercedes-Benz cars. If you are in the market for a new car and particularly enjoy the prestige Mercedes-Benz brand we are confident that we will be able to introduce you to the best rates and terms available. You can access Mercedes-Benz Retail Group Corporate sales by clicking here. Alternatively, please call us on our main land line number and we will set the 'wheels in motion' towards obtaining your new Mercedes.

Please note: If your enquiry is made by email via the links on our websites or directly on the phone to Mercedes-Benz Retail Corporate Sales, to obtain our preferential terms you MUST state or mention in the comment box "referred by Erimus Insurance Brokers" or "referred by Teesside Insurance Consultants (TIC)".

Erimus Insurance Brokers is a trading name of Teesside Insurance Consultants Ltd. Registered in England No. 2043783. Authorised and regulated by the Financial Conduct Authority No. 307660.
Directors: P.J. Davison, S.D.E. Hughes, I. Miller ACII, S.S. Pinnell. Non Executive Director: G. Lumby MBE, FCIBS.
Company Secretary: C. L. Nolan.
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