Covid-19 uncovers hidden risks for business
Post-lockdown, what is the impact on insurance and business risk? S-Tech Executive Josh Simpson answers frequently asked questions about the issues many clients are now facing, including:
- The hardening insurance market
- Health & Safety risk management
- Supply chain payment failures
- Employment issues, redundancy and changing government advice
- Home working, impact of empty offices, cyber risk and portable equipment
Will insurance renewals be affected by the pandemic?
Yes. Right now, we’re going through a ‘hard market’ where there’s less cover available and less insurers to offer that cover, which undoubtedly means increased premiums. At the same time, it’s our role as a broker to be proactive about renewals, getting in contact with clients with plenty of time. There will be increases, and in a lot of areas too, but if we do our job properly and get the cover right then that’s the most important thing at this moment in time. Business have changing needs too, being flexible on what you cover and responding to the company’s current trading position makes a big difference to cost.
What are some of the main issues businesses are facing?
Companies are realising that risk management has got to be a priority - it’s always been important but is even more so now. Businesses are wondering what the right thing to do is, what are the types of signage that are needed in premises, for example, or what to put on their risk assessment each time the government advice changes? Fortunately, we’ve got a risk management team who can advise exactly what the law is currently, with ongoing support as restrictions are eased, or altered.
Turning to supply chains, sadly many businesses are facing financial difficulties. Even if you’re doing okay, your supply chain could be suffering. We’ve seen an increase in uptake on products such as credit insurance, which can protect your business if your customers are struggling financially and can’t pay or become insolvent.
The way companies are working has completely changed, what are the hidden dangers and where can insurance mitigate the risks?
Redundancies and disputes are on the increase and lots of our clients are looking to access legal advice. Employment practices cover provides cover for the legal costs and damages associated with employment claims. Many policies come with a free helpline for HR, Health and Safety and other legal matters.
Cyber-attacks are an issue for a company of any size whether it’s breaches to your own or third party systems. This is particularly relevant as many employees are home working and could be using home connections which may not be as secure. Cyber policies can cover loss of data but people often forget that a denial of service attack could take down your whole system resulting in a loss of revenue or costs associated with reinstating the system – with working from home relying on connectivity this safety net is more important than ever.
Equipment out of the office – again, with home working becoming ever more prevalent, ensuring equipment is covered on an ‘all-risks’ basis and not just at the premises is essential.
Empty offices – un-occupancy conditions are widely being imposed by insurers and complying with them is a policy requirement. Conditions can range from ensuring utilities are disconnected or even just to ensure the premises is visited every 14 days. These steps help to protect the premises against risks like water damage.
Lastly, what can a business owner do if they have any concerns?
Transparency in a situation like this is always key, in my opinion, and we are getting frequent, sometimes weekly, updates from the insurers. It’s our job to make sure that we’re gathering the information in the right way and also making sure that our clients are aware of exactly what they need to do.
Our message will always be: if you are struggling, contact us for a free review and we will go through this together.