Interviews

Insurance view

by Mark Rowe

Insurance. Rarely a word or subject that tends to ignite much interest in the average business person. Many perhaps see it as an irritating expense to the business, a “necessary evil” – paying for something that they hope never to have to make use of. With this in mind, there can be a temptation to spend as little as possible in buying a document purporting to be providing the relevant cover. The premium can be paid and the paperwork then filed away and forgotten about until the next renewal. Unfortunately, as many will regretfully testify, the true effectiveness of a policy would only be realised in the event of a claim and attention to detail is of little use in hindsight after the event, writes Tim Eastwood of First Insurance Solutions, pictured.

We were recently asked to provide a quotation for a firm of security contractors. Our terms were duly provided and neither they, or we, could understand why their current premium was so much cheaper than our quoted terms. A brief inspection of their documents revealed that they were not insured for failure to fulfil (efficacy), wrongful arrest or theft by employees. Furthermore, there was an unusually large excess and a number of onerous terms and conditions placed upon the policyholder. The schedule did correctly state the business of the insured to be ‘security contractors,’ with perhaps paragraphs of language that by at face value appearance would associate the document with being correct and official. A policy is one booklet which needs to be judged by the cover…

The very particular requirements of security providers need to be carefully considered, which is why it is important to speak to a broker who understands the industry. Put simply, there are a number of generic liability policies available in the market that will willingly cover security companies under the same wording as tree surgeons or electricians. Not ideal. Apply some caution here – your policy needs to be bespoke and its worth is in having included within it key, relevant extensions that are industry-specific and protect you further. The primary extension to the Public and Products Liability section is Efficacy and Contractual Liability – losses arising from failure of the company to carry out their contract conditions. Or, in the case of alarm installers, losses arising from failure of the product to fulfil its intended function.

Your policy is also there to defend and protect you in the event of falsely alleged claims made. Historically, construction site based security risks tend to realise more claims than other sectors, particularly towards the end of a contract when inventories reveal missing plant and materials. (A prevailing occurrence being that if anything is missing, the security company cannot have fulfilled their job properly and by making a claim against them, the books can then be balanced.)

Clearly, the very fact that goods are missing does not mean that the security guards have not carried out their duties strictly in accordance with those specified in the contract. A claim will not be admitted unless it can be proven that they have failed in their duties and that but for that failure, the loss would have been prevented.

First Insurance Solutions has over 25 years experience in arranging specialist insurance cover for the security industry and are well placed to advise in all areas, including:

•Manned Guarding
•Door Security
•Close Protection
•Alarm and Electronic Security
•Training including Physical Intervention and Conflict Management

We also currently arrange cover for firms providing:

•Overseas Manned Security
•Close Protection in War Zones
•Medics in Remote Areas
•Marine Security (Armed Piracy Protection)

In all these areas, it is vitally important to understand the risks being faced and to arrange the appropriate cover accordingly.

Details

Tim Eastwood at First Insurance Solutions on 01634 662919 or email [email protected]

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