Ensuring you have adequate insurance
Insurance is often perceived to be a dull business service that deserves little deliberation and even less research. In fact, says Mike Jenkins, failing to take your business insurance seriously can threaten your company’s very survival.
Why would you pay out a proportion of your company’s hard-won earnings for something you weren’t convinced you needed, didn’t really want and hoped you’d never use?
The answer is simple — to provide you with peace of mind and, in extreme cases, even protect your business’s continued existence. That is precisely what carefully chosen and effectively implemented company insurance offers.
There are essentially three types of business insurance — buildings, contents and liability.
Buildings and contents insurance are clearly sensible; protecting your company’s property, assets and equipment is a fundamental and obvious need.
The requirement for liability insurance is, however, less clear-cut. Your exposure to liability can arise from many areas — including employers’, public and products; pollution; property owners’, professional indemnity insurance and, increasingly, from your role as a director or senior member of staff.
Employers liability insurance is mandatory. The others are discretionary, but they are all designed to protect you and your business from the incidents that can occur during the course of your company operations that, if severe enough, would otherwise jeopardise the business as whole.
Employers liability provides you with cover for illness or injuries sustained by your employees caused during the normal course of your business operation.
Public and products liability insurance, meanwhile, covers the loss or damage to third parties caused by your employees or the products you supply or install. It also covers related legal fees, costs and expenses, as well as the cost of hospital treatment.
Insurance against pollution damages typically deals with sudden and unexpected one-off pollution incidents that occur during the insured period.
Property owners’ liability insurance covers owners of a building for their legal liability for injury to third parties.
Professional indemnity insurance protects the business from financial costs suffered by your clients relating to the poor advice, design or specification of works undertaken.
Directors’ and officers’ liability covers legal costs and damages arising from litigation brought against individual directors or senior staff, rather than the company, following ‘wrongful’ decisions or acts made that have caused them a financial loss.
There is also a whole array of other insurance products aimed at the building-services industry. One that is continually overlooked and poorly explained is contract works cover for your contract materials and equipment during the course of installation. This protection can also be extended for all plant and tools.
Various other covers are available in the market — such as engineering inspection, legal expenses and excess liability extensions. Protection is also available for personal accident and business interruption.
The HVCA has been working for several years to improve its members’ buying power in the insurance industry by examining both the perception and the reality of members’ insurance risk profiles. In doing so, it has worked to demonstrate that its members’ businesses are a superior risk.
For example, the HVCA has been fighting the traditional view of many insurers who consider the HVACR contracting sector as part of the construction industry, and fail to take into account the high quality of HVCA members’ businesses.
The insurance market has, however, been slow to recognise these efforts. On top of this, following an in-depth assessment of the insurance products previously available to HVCA members, it was discovered that:
• most HVCA members have package-style policies designed for the construction industry;
• many members receive quotations over the phone with little or no advice on cover or exposure to claims;
• claims service is often limited to a referral to an insurer’s claims telephone line;
• the claims process (including settlement) often fails to involve the client.
However, all is not lost. To help reward the higher quality risk that HVCA members present and to overcome shortcomings in the insurance sector, the HVCA has joined forces with Oval Insurance Broking to craft an insurance solution called HVCA Unique. Available only to HVCA members, this delivers a highly competitive product, with savings regularly in excess of 20% combined with cover that has been tailored to the industry needs and is backed by specialist expertise and dedicated adjusters.
Mike Jenkins is business development manager of Welplan and group co-ordinator of HVCA Business Plus.
