Do You Have Insurance Cover for Business Interruption and Loss of Profits?

An interruption to your business following a disaster such as fire, flooding or theft can be devastating, unless you’re insured against it. Unfortunately, many businesses assume they have Business Interruption cover and only discover their mistake when they come to make an insurance claim.

A Business Insurance policy covers the losses a company experiences when it’s unable to function for a pre-determined amount of time. There are many circumstances, however, in which the insurer’s loss adjuster may refuse your claim wholly or partially. This could be because the defined period wasn’t long enough for your company to get back on its feet, or it could be because you’ve underestimated your normal profits.

Gross Profit Insurance is one type of Business Interruption policy, in which the aim is to restore the company to the level it would have been if the disaster hadn’t happened. However, many companies seem confused about exactly what their gross profits are.

What Are Gross Profits?

If you ask an accountant to calculate your company’s gross profits, they’ll simply take the costs involved in producing goods sold from the total sales revenue. This is fine for accounting purposes, but unfortunately it’s not the way it’s calculated when you’re making an insurance claim for Business Interruption insurance.

The calculation the loss adjuster expects you to make involves two complex figures. One is defined as the sum of the turnover, the value of the closing stock and any work in progress. The other is the sum of the value of the opening stock and work in progress and any uninsured working expenses, such as wage roll, purchases or bad debts. Gross profit is the amount by which the first exceeds the second.

In 2016/17, the Chartered Institute of Loss Adjusters calculated that nearly 45% of Business Interruption policies were inadequate, the average shortfall being more than 40%. If your business is in this position, you could find yourself in a desperate position if you suffer a disaster.

Allied Claims would strongly advise all companies not only to have Business Interruption insurance in place, but also to make sure they’re fully covered for the recovery time and loss of profits required.

Keep Your Property Safe and Have a Happy Christmas

Christmas is a time for you and your family to enjoy yourself. We at Allied Claims hope you’ll have a great holiday, but it’s worth taking a little trouble to make sure someone else doesn’t spoil it all for you.

And no, we’re not just talking about bad Christmas TV schedules. Burglars view Christmas as a bonanza, so be sure you don’t make life easy for them, or put your home or possessions at risk in any way.

However many precautions you take, of course, you could get burgled, or there could be accidental damage. If you’ve taken precautions, though, you’re unlikely to have any trouble from the Loss Adjuster if you have to make an insurance claim.

A Few Simple Precautions You Can Take

  • If you’re going out during the holiday, make sure you activate your alarm and leave a light on.
  • If you’re going to be away for a more extended period over Christmas, arrange for a family member or a neighbour you trust to make regular checks. They should turn lights on and off, open and close the curtains and prevent mail from piling up. This will make it difficult for burglars to be sure you’re away.
  • Be careful of your social media posts over Christmas. Although it’s tempting to show off what Santa brought you, that could be of interest to burglars as well as your friends, so check your privacy settings. And avoid posting about being away from home — if you’re burgled, that could be enough for your insurance claim to be rejected.
  • Keep your Christmas presents out of sight by storing them well away from the windows.
  • If you’re out shopping in your car, either for Christmas presents or for bargains in the sales, keep what you buy locked in your boot with the parcel shelf covering them.

Besides safeguarding against burglars, there are some simple precautions against accidents that will help keep your home safe over Christmas and the Loss Adjuster happy if you do have to make a claim:

  • Only have candles alight while you’re present, and keep cards and decorations away from fires or other sources of heat.
  • Be careful when decorating your Christmas tree and make sure you don’t overload it.
  • Fairy lights can easily deteriorate and become a fire risk, so consider whether you need to buy new ones. Also, keep them turned off at night or when no-one’s present.
  • You tend to need a lot of electricity over Christmas, especially if you have several sets of fairy lights, so ensure you don’t overload the sockets.

And, finally, check your insurance. Single items are typically limited to a liability of no more than £1,500- £2,500, so make certain your presents are all covered, including an accidental damage clause for any breakages.

Have a great Christmas — but also a safe Christmas.

Have You Rodded Your Pipes Yet?

Autumn is a dangerous time for your guttering. Falling leaves get blown around in the wind, and other debris gets blown with them. And some of this debris can end up in your gutters and downpipes. If it’s left, the rainwater can’t run away and could end up flooding your home, perhaps causing structural damage.

It’s time to get rodding.

Preventing damage to your home should be enough reason, but failing to clear your gutters and downpipes could prevent you from making an insurance claim. This is because there’s usually a clause in your policy specifying that you have to get your guttering cleared and rodded at least once a year.

It’s not enough to do it, though. If you’re making a claim, the loss adjuster will require proof before allowing it to go through. If you feel confident enough to do the rodding yourself, you could get someone to take pictures of you. Or even take selfies — but remember that safety comes first.

If you’re hiring a contractor to rod your pipes, it’s vital you have a receipt. This isn’t always as straightforward as it might seem, as some contractors prefer to work cash in hand, with no documentation. That might be cheaper in the short term, but it could end up costing you a lot more, if you have nothing to show the loss adjuster.

Care for Your Roof

Your roof does a vital job protecting you and your home, and it’s essential to take care of it. It’s not just the guttering and downpipes that need regular attention. If you end up making an insurance claim for a leaking roof, you might be in trouble if you haven’t had it checked lately.

This requirement is often written into insurance policies, especially if you have a flat roof. Even if it’s not explicitly stated, though, failure to look after your roof could still mean you end up paying for the entire cost of repairing flood damage to your home. All for the lack of a bit of rodding.

Safeguard Your Business with Key Person Insurance

Any business, but especially a small one, can be vulnerable to losing a key person in its operations, whether permanently or for an extended period. This could be the owner or founder, but equally it could be someone in a crucial position who has knowledge and experience that would be difficult to replace.

Losing a person like this to serious illness or death can be terminal for the business. If this is the owner, for instance, it could prove impossible to afford the costs of bringing someone in to run the company. This would be devastating both for the lives of the owner’s family and for employees and customers.

This is why insurance companies offer Key Person Insurance (traditionally referred to as Key Man Insurance). This means that, if the crucial person dies or is incapacitated, the business can make an insurance claim to help it survive the crisis.

How Does Key Person Insurance Work?

Anyone involved in the business can be designated a Key Person, and you can have as many as you like — though, of course, a separate premium will have to be paid for each. If this person should unexpectedly die or develop an illness recognised by the insurer’s Loss Adjuster as a critical illness, the business can make an insurance claim.

The normal result will be a lump-sum pay out. This would, for instance, allow you to recruit a new person with the required expertise, or perhaps pay for training an existing employee to fill the role.

It’s important to be clear exactly what the policy does and doesn’t cover. For example, a policy may be just for critical illness, or it may offer life and critical illness cover. In the latter case, it’s also important to bear in mind that this isn’t the same thing as personal life cover. The Key Person may need a separate life policy, especially if they have a family. Your insurance broker should explain exactly what you’re insured for.

Do You Have Insurance Cover for Non-Forced Entry to your Home or Office?

There are many circumstances in which you may give your keys to someone providing a service. This could be a cleaner, a babysitter or a builder, plumber or electrician doing work in your home or office.

Most of the time, these people are completely reliable, but it only takes one exception to cause you trouble. Can you imagine coming back to find someone you trusted has made off with your property? Could it get worse?

It could. If you try to make an insurance claim for the loss, you’re likely to find it rejected. This is because the insurance company’s Loss Adjuster will point to it being a “non-forced entry”, which isn’t covered by most domestic or commercial property insurance.

Is There a Way of Getting Covered?

Any company that sends employees into customers’ homes should cover this risk in their insurance policy — but that doesn’t guarantee they’ll have done so. One of the checks you can do when choosing a service provider is to ask to see their policy.

Even so, it can still go wrong, since the policy is only any good if the company is paying the premiums at the time of the incident. The alternative is to discuss the matter with your insurance broker, who should be able to find you a policy that does cover this kind of insurance claim.

Even then, though, you aren’t home and dry. In order to ensure the Loss Adjuster won’t refuse your claim, it’s important to notify the insurer whenever you’re going to give a service provider access to your home. This is a requirement of all policies that cover non-forced entry.

This is a very real issue. In a recent case Allied Claims is aware of, a homeowner ended up out of pocket by £48,000 after being burgled during renovations, because the insurer hadn’t been informed. Be sure you don’t make such an expensive lapse.

Should I Claim on My Building or Contents Insurance?

If your home or business property has suffered from fire, flood, criminal or accidental damage, shouldn’t it be covered by the insurance policy you’ve taken out? Unfortunately, it’s not always that simple.

There are two types of property insurance — building insurance and contents insurance. If you’re fully insured, you should have both, but you have to make an insurance claim under the correct policy. If you get it wrong, the insurer’s Loss Adjuster will turn down your claim.

It should be easy. Building insurance is for the building itself, while contents insurance is for anything you might put into it. There are grey areas, though, and the Loss Adjuster may have their own interpretation.

What Problems Might I Encounter?

The building insurance is normally interpreted as including fixtures, such as doors or water pipes, while contents insurance would include furniture, along with other movable possession. Some items, though, could come under either category, depending on how the Loss Adjuster interprets them.

Carpets, for instance, are fixed to the floor and should therefore be fixtures. However, this could depend on whether they were in place when you bought the house, or whether you’ve had them laid yourself. Even laminate flooring can in some circumstances be interpreted as a movable item, despite being glued and fixed under the skirting board.

This applies all over the house. If you have fitted units in your rooms, they would normally be regarded as fixtures, but you can’t count on it. Again, this may depend on whether you’ve installed them yourself.

So what can you do about it? Well, you could check with your Insurer, who should be up front about their interpretation of your policy. Allied Claims would recommend, though, that you arrange your policy through an insurance broker, who’ll clarify everything, rather than try to do it yourself.

And, of course, use a Loss Assessor when you need to make an insurance claim.

At What Stage of an Insurance Claim Should You Call a Loss Assessor?

If your residential or commercial property suffers damage from fire, flood or accident, or if your possessions are stolen in a burglary, you’ll normally need to start an insurance claim straight away. It might seem a no-brainer that the insurance company will pay for any repairs or replacements you need, but once you’ve negotiated with their Loss Adjuster, you’ll see it’s a lot more complicated.

Though the Loss Adjuster won’t be trying to cheat you out of your rights, part of their job involves saving the company money they’re not obliged to pay out. This means they’ll scrutinise your claim for faults and inconsistencies — and they’re usually very good at their job.

The solution is to appoint an independent Loss Assessor. Loss Assessors, such as Allied Claims, are insurance professionals who are at least as expert as the Loss Adjuster. However, the Loss Assessor is entirely on your side. They’ll handle all negotiations with the insurance company, as well as liaising with contractors and obtaining quotes.

Isn’t It Better to Try Yourself First?

Many people with an insurance claim might assume the best strategy is to do it themselves and only call in a Loss Assessor if something goes wrong. After all, it might be perfectly straightforward.

That could be true — if you’re very lucky. The reality is that insurance claims are rarely that simple. This means that by doing it yourself you risk making an error in your claim which the Loss Adjuster will pick up on and use as a reason to refuse your claim or reduce the pay-out. The Loss Assessor you then appoint will try to get the decision reversed, but that can be an uphill struggle.

The best way to avoid this is to appoint a Loss Assessor the moment you know you’re going to be making a claim. This way, they can help you prepare your claim with no loopholes, making it unlikely you’ll be turned down. Why not get in touch with us to find out how Allied Claims can help you?

Keep Your Home Insurance Safe for Your Summer Holiday

Before long, many of us will be locking up our homes and leaving them for a week or a fortnight to enjoy a well-earned summer holiday. The last thing we want is to come back to is a burgled home.

Burglar in HouseYou don’t want to be burgled at all, but however many precautions you take, there’s no cast-iron assurance that the burglars won’t find a way in. You can make an insurance claim, of course — but the worst outcome of all would be for the insurer’s Loss Adjuster to turn you down for not being careful enough.

You can take the common-sense precautions, like securely locking all doors and windows and having a good alarm installed and set. There are things, though, that can alert burglars that the house is empty — post or newspapers piling up, for instance. Remember to cancel what you don’t need, but ideally it would be best to arrange for a friend, relative or neighbour to visit a few times while you’re away.

The Dangers of Social Media

There’s a new danger these days, however. We all like to let everyone know what a great holiday we’re having by posting our photos on Facebook or other social media. The problem is that burglars look at Facebook too, and often use it to find out which properties are going to be empty. You may as well make a public announcement that your home is available to burgle.

If this happens, you may find when you make your insurance claim that the Loss Adjuster refuses you on the grounds of the Reasonable Care clause in your insurance policy. Your social media posts are a matter of record, and the insurance company may well check to see if you’ve been unreasonably careless.

So don’t help the burglars, and don’t give the insurer a reason to reject your claim. Keep the Facebook posts till you’re safely home. Feel free to get in touch with us for more information.

Don’t Get Caught Not Claiming for the Hidden Damage — Use Thermography

If your home or business property has suffered from fire or flooding, it’s difficult to be sure you’ve found all the damage when you make your insurance claim. Some problems can stay hidden for years, and when they emerge, it won’t be easy to get the Loss Adjuster to accept liability under your policy.

If you use thermography, though, this won’t be a problem. Thermography is a non-invasive thermal imaging system that can show up the hidden damage. It has a wide variety of uses, from night surveillance and leading firefighters round smoke-filled buildings to diagnosing cancers, as well as in insurance.

Thermography is completely safe because it’s an entirely passive imaging system. Whereas a technique like X-rays actually fires radiation at the subject, thermography simply reads the infra-red heat every object gives off and builds up an image.

How Can Thermography Help Your Insurance Claim?

Employing a thermography scan before you make your insurance claim can identify a wide range of issues you might never have suspected otherwise. Either fire or flooding, for instance, can result in electrical hotspots, which will cause trouble somewhere down the line, or damage to the insulation.

Water damage can also cause mould, which not only undermines the building’s structure, but can also be a health hazard. If you identify any of these through thermography, the Loss Adjuster will have little choice but to include them in your insurance claim.

Even if you’re not making a claim, having a thermographic scan of the building could save you money in the long run. Many of these problems, from hotspots to damaged insulation, can occur without a traumatic event, and fixing them could mean a substantial improvement on the energy efficiency of the building.

At Allied Claims, we offer thermography to our clients, and we’d strongly advise you to use it if you’ve had a fire or flooding incident at your home or business premises. Feel free to get in touch with us if you need to know more.

Insurance Claims for Water Damage and Dry Rot

After the kind of cold spell delivered by the “Beast from the East”, the number of burst water pipes skyrockets. This is because pipes can crack when they freeze, and water starts to flood out when they thaw.

If your home or business premises has been flooded, it’s vital to get the drying-out process started as soon as possible, and your insurer’s Loss Adjuster should be arranging that. The trouble is that everyone else is claiming at the same time, and it could take up to four weeks from making your insurance claim till the Loss Adjuster gets round to dealing with it.

Even when the drying-out process does get under way, you need to be sure it’s being done properly. If only the most obvious damp places are dried, it could mean trouble further down the line.

Drying Out Your Building

If water has leaked upstairs and seeped through to the lower storey, the wooden joists under the upper floor and the timber frame in the partition walls are likely to be saturated. Similarly, if the floor at ground level has been flooded, the water will be lurking in the sub-floor void and affecting the timbers there. Failing to dry these out thoroughly can result in dry rot developing, which can create serious problems later.

Unfortunately, even when the Loss Adjuster does bring in a restoration company, they may just install heaters and dehumidifiers that only dry out the surfaces and interior finishes of walls and ceilings. You as policyholder need to insist on seeing a complete specification of the work any contractor is going to carry out as part of your insurance claim.

Of course, it’s not always easy for an individual policyholder to stand firm against the Loss Adjuster, especially if you’re not completely sure of their rights. And that’s where an independent Loss Assessor like Allied Claims comes in. Not only will we get things moving in the first place, but we’ll also insist on full specifications and make sure they cover the hidden damage, as well as the obvious.

If you need to make an insurance claim for water damage or dry rot, get in touch to find out how Allied Claims can help you.