News

IS IT TIME TO REVALUE YOUR JEWELLERY?

Rising Gold, Silver and Diamond prices

At present we are all seeing many articles and commentaries in the press and TV regarding the price of gold, silver and diamonds on a seemingly upward trend in cost. This is very true as you can see from the graph below showing gold.

When it comes to valuing jewellery for insurance we must always take into account the increase in raw materials as it can often be an important part of the cost, particularly if the items are heavy but the craftsmanship is possibly mechanised. We would normally be recommending jewellery and silver is re-valued every 4-5 years but recently we have been advised to recommend valuations every 2-3 years.

Diamonds and indeed precious gems in general have and will always be on the up when it comes to cost. 

Therefore we recommend our clients with good jewellery with individual stones above 1.5cts should be considering, at the very least, a desk top revaluation every 2-3 years but a full valuation is better.   This is to prevent the possibility of under-insurance in the event of a claim.

HEALTH AND SAFETY (FEES) REGULATIONS 2012

New UK Legislation enabling the HSE to charge a Fee for Intervention (FFI)

What is FFI?

A government initiative to shift the cost of Health and Safety (H&S) regulation from the public purse to businesses and organisations that break H & S laws.

Where a Health and Safety Executive (HSE) inspector inspects work activities and investigates incidents and complaints and identifies a material breach of H&S law, a fee may be charged.

The fee is based on the amount of time that the inspector has to spend identifying the breach helping businesses put it right, investigating and taking enforcement action.

The fee will be charged at £124 per hour but would be increased if the inspector uses the Health and Safety laboratories or other specialist services. 

Where a material breach is identified, the costs for the whole visit are recoverable.

FFI will come into effect on 1st October 2012 following the adoption of the proposed Health and Safety (Fees) Regulations 2012.

The HSE have published a “Guidance on the Application of Fee for Intervention (FFI)” which is freely downloadable from their website.

What is a material breach of H&S Law?

A material breach is when, in the opinion of the HSE inspector, there is or has been a contravention of H&S law that requires the issuing of a notice in writing to the business or organisation.

It may be:

-  Notification of a contravention

-  An improvement or prohibition notice

-  Notice of prosecution.

Enforcement decision making

The HSE will use two longstanding procedures to arrive at an enforcement and hence FFI decision:

-  Enforcement Policy Statement (EPS)

-  Enforcement Management Model (EMM)

Amongst other things, these require the exercise of:

-  Proportionality – appropriate for the circumstances

-  Targeting businesses that pose the greatest H&S risks

-  Consistency

-  Transparency

-  Accountability

Where will FFI apply?

FFI will apply to all businesses inspected by the HSE including crown and public bodies.  It will not apply to businesses inspected by local Enforcing Authorities.  Nor will it apply to the self employed who don’t put people at risk by their work.

Appeals

There will be an appeals procedure that will be run by the HSE. The fee of £124 per hour will be payable where the appeal is not upheld.

Plant Inspections – What should our clients do?

-  Under most regulations you have the responsibility to ensure that your plant and equipment is inspected on time and to take it out of service when an inspection is overdue.

-  When an imminent danger (‘A’ immediate) defect has been identified, remember that the law requires that a copy of the report is sent to the relevant Enforcing Authority. You should promptly take the item of plant out of service until the reported ‘A’ immediate defect has been rectified.

-  Where a plant not available notification (PNA) has been issued, you should ensure that the item or items in question are made available for inspection as soon as possible.

-  Bear in mind that the inspections undertaken by Insurers are not substitutes for adequate maintenance.  Frequent ‘A’ immediate reports may catch the HSE’s attention and prompt a visit.

INCREASED SQUATTERS RISK IN COMMERCIAL PROPERTIES
From 1st September squatting in residential buildings in England and Wales became a criminal offence, with perpetrators facing up to six months in jail and a maximum £5,000 fine. However this legislation does not apply to commercial properties, which may now become more vulnerable as squatters seek alternatives.

This could lead to significant damage to commercial properties, such as that caused by fire whether deliberate or accidental. In light of this we would advise our customers to be aware of a few basic precautions regarding empty properties in order to protect against squatters:

- Ensure an adequate level of physical protection to windows/doors/perimeter.

- Consider boarding up windows and doors

- Keep both intruder and fire alarm systems fully operational.

- Removal of any unfixed combustible materials from the premises and surrounding areas.

- Frequent internal and external inspections.

- Ensure that all CCTV equipment is in full working order.

- Consider installation of a temporary intruder alarm system while the property is unoccupied  (recommended in accordance with the SSAIB code of practice for temporary alarm systems).

- Employment of security guards - either for periodical visits or permanently based staff.

- Retention of working sprinklers.

- Turn off, drain down and secure any mains water supplies, tanks and pipework etc, to prevent use or abuse by squatters.

 It is a material fact to notify Insurers if an insured property should become unoccupied. Commercial policy wordings have conditions and obligations regarding unoccupied properties.  

We hope you find this information helpful, please get in touch with any queries

 VERY IMPORTANT NOTICE

 If you leave your home unattended, leave the heating on low (around 15°c).

 Know where the water shut-off valve (stopcock) is to isolate the supply in an emergency.

 Lag pipes in the loft and check that the heater and water tanks are insulated.

 Lag outside water taps to prevent them freezing and pipes bursting.

 In severe cold weather open the loft hatch to warm the void.

 Plastic plumbing joints will probably degrade sooner than metal ones, so keep an eye out for the slightest hint of water.

 If you are going to be away for an extended period, consider draining down your plumbing and heating system, but please do so with professional advice. 

 Theft  

 Burglar Alarms; the siren box will act as a visual deterrent to some extent and dummy sirens can be purchased cheaply.  Choose a system that lets off an alarm or one that dials a programmed number such as your mobile phone. 

 It is highly recommended that your external doors are strong, in good condition and secured to a high standard.  Fitting a five lever mortice deadlock or extra sliding bolts will improve security.  French doors should be fitted with top and bottom mortice locks on both doors.

 Burglars often check convenient locations for a spare key.  It is advisable to ensure that keys are not within easy reach of the letter box.

  Storm

 Regularly check the condition of all roofs.  In particular check garage, shed and flat roofs for signs of wear and tear, as this is of particular importance in heavy snow with the unexpected additional weight.

 Keep gutters, gullies and drains clear to carry water away quickly and efficiently.

 A blocked downpipe with trapped rainwater may crack or shatter in freezing conditions.

 Consider cutting back low hanging tree branches which could cause damage in high winds.

 Please note: Buildings in sound condition will be able to cope with most weather conditions.  Please remember insurance is not a maintenance contract and you are responsible for maintaining your property in a good state of repair.

  Fire   

A properly functioning smoke detector will alert you in the early stages of a fire giving as much time as possible to make an escape.  Test your detector regularly.

 Avoid leaving candles left unattended or in a place likely to be knocked over.

 It is advisable to have extinguishers in the home.

 Do not fill a chip pan with more than one third of fat or oil.  Do not place food in the pan if the fat or oil is giving off smoke.

 Always switch off electric blankets before getting into bed.  Make sure they have a safety check at least once every 3 years and contain a current safety mark

The Government has decided that water and sewerage companies in England and Wales will take responsibility for the maintenance and repair of some sewer pipes which are currently privately owned. 

This change will take place from 1st October 2011.

The current situation: At the moment, you have responsibility for the pipes which connect your property to the main public sewer systems.  These pipes may pass beneath your garden or driveway, and may run beyond your property boundary into nearby roads and pavements. Some of these connecting pipes are shared by several properties.

Customers are often unaware that they, not their water company, have responsibility for these pipes.

How this will change:  The new law means that, after October 1st, you will be responsible only for the drainage pipe which serves your own property.  Sewer pipes which are shared by more than one property, or run beyond your property boundary, will become your water company’s responsibility. 

Currently, if a private sewer pipe gets damaged or blocked, you might have to pay for repairs, even if the pipe is not within your property boundary. Similarly, if you share a sewer pipe with your neighbour, you could end up paying for a costly repair for an issue that isn’t your fault. The new rules will prevent these kinds of problems from occurring in the future.

For information on this and any other home insurance matters please contact Ian Nixon.

OVERVIEW – 2011

Rate reductions are still possible for clients for property and liability insurance.  Abundant capacity and competition between Insurers are preventing increases, other than where there has been poor claims experience on individual accounts or within specific sectors.  Underwriters will endeavour to push rates forward but market conditions will probably prevail and limit increases. 

Insurance Premium Tax (IPT) increased to 6% on 04 January 2011 and Insurers are not prepared to absorb this cost but are instead increasing their rates accordingly.

 General Liability: National Corporate Practice.  Availability of capacity and competition are preventing increases other than where claims exceed premiums. Underwriters will endeavour to push rates forward but market conditions will prevail and limit any increases.  The impact of Lord Justice Jackson’s report on the rules and principles governing the cost of civil litigation and Lord Young’s report on the perceived compensation culture and Health and Safety Law should become clearer during 2011.  It is difficult to predict if the reports will lead to widespread legal reform with potential financial savings for both business and their Insurers on legal costs and administration.

 Risk Management Practice:  General liability rates are reaching the minimum rate on line in the UK and further reductions are unlikely.

 Property:  Some small rate reductions for property insurance, driven by competition, capacity and insurer new business targets.  There is no shortage of capacity for most risks although waste and food industries are becoming more difficult as insurers withdraw or reduce their exposure in these areas.  A small number of rate increases, driven by claims experience.  Despite adverse winter weather conditions, there is no anticipation of any great change in the future. 

 Risk Management:  New entrants into the market means there is still a lot of capacity and competition.  

 Motor:  Generally Insurers are looking to increase premium rates on motor business due to overall poor profitability.  Well run risks of a reasonable size are still benefiting from reductions as size of premium will still affect an underwriter’s decision.  Conversely, poor running risks can expect rate increases.  Underwriters are making noises about profitability, however there is still competition in the marketplace which will impact the level of rate increases underwriters can secure.

 Professional Indemnity: Market is still competitive and premium and rate reductions are still being achieved.  Increased claims activity especially from the technology industry and architects and engineers. Insurers are reluctant to offer a rate decrease, however, the level of capacity available means that the market in general remains competitive. 

 Marine:  Has abundant capacity where Insurers are tempted to trade underwriting profit for market share.

 Piracy:  Piracy of ships, cargoes and crews continued throughout 2010, with Somali pirates widening their reach deep into the Indian Ocean.  Average duration of hijack by Somali pirates is now four months before ships are released, and average ransoms paid is understood to have reached USD 4 million, double the amount of 12 months previously.  Increasingly, where flag state regulations allow, ship owners are employing armed security firms to accompany their ships.  Despite fears of escalated violence, this has proved an effective deterrent. 

 Iran Sanctions:  The comprehensive Iran Sanctions, Accountability and Divestment Act was enabled in the United States in July 2010.  Together with similar legislation in the European Union and elsewhere, the Act imposes restrictive economic barriers against trading with some parties in Iran and heavy penalties against those continuing to trade with them.  Understandably, the insurance industry has scrambled to distance itself from involvement in such activity. 

THEFT OF HEATING OIL  

The cost of heating oil has increased significantly recently, resulting in more thefts of oil from both domestic and commercial properties.

The first indication that a theft has taken place is often when the heating stops working.  Usually, it’s assumed the boiler is at fault, but regrettably the problem is often that there’s no oil left. Thefts vary from small amounts being stolen to the whole tank being drained.  The methods used by the thieves can be very crude, including drilling or punching holes in the side of the tank and then filling jerry cans.

What you can do to prevent losses

Monitor the level of oil in your tank regularly.

Conceal the location of the tank by using hedging, fencing or walling.

Securely lock doors at all times if the tank is situated within a building.

Consider installing security lighting to cover the tank, if it is overlooked by nearby buildings.

Ask nearby residents to be vigilant and report any suspicious activity to the police.

Padlock the valve. This may not always be the correct course of action, as thieves may smash the valve completely, but it can deter a less determined thief.

Ensure any gates are locked at night, to make it more difficult for a thief to escape with the oil.

Install an alarm device which creates an alert if the oil level suddenly drops or if the lock is attacked.

Consider closed circuit television.

DO YOU HAVE DIRECTORS AND OFFICERS INSURANCE? 

The first Corporate Manslaughter Prosecution has been successful in the United Kingdom.

The Company concerned was prosecuted under the Corporate Manslaughter and Corporate Homicide Act 2008 and has been fined £385,000.

It is more important than ever to ensure that your Managers, Directors, Officers as well as the Company have cover in place to protect them.

Should you fail in your duty both you as an individual as well as the organisation could be faced with stiff penalties.

Do you have Directors and Officers Insurance?

If yes then does it extend to cover the Entity as well as the Directors and Officers?

For further information regarding Directors and Officers, Entity, Employment Practice or Pension Trustee Liability Insurance please contact us on jlberesford@backhouse.co.uk

CHANGES TO THE MOTOR INSURANCE DATABASE

The Motor Insurance Database (MID) is used by the police to detect uninsured drivers.

From 2011 if your vehicle is not registered on the MID and has not been declared as 'Off-Road' you will receive a letter warning you that you could face a fine, prosecution as well as your vehicle being clamped, seized or ultimately destroyed.

What do I need to do?

If your vehicle is insured there is no need to worry, however it would be sensible to make regular checks to ensure your vehicles appear on the MD.

All insurers can update the MID so if you check www.askmid.com and your vehicle doesn't appear then you should ask your Broker/Insurer to ensure the MID is updated.

For more information regarding the Motor Insurance Database go to www.mib.org.uk/Motor+Insurance+Database/en/default.htm

IMPORTANT CHANGES TO EMPLOYERS' LIABILITY INSURANCE FROM 1ST APRIL 2011

With effect from 1st April 2011 the Employers' Liability Tracing Office (ELTO) will be introduced.

The purpose of the ELTO is to assist the insurance industry in meeting its obligations to help those who have suffered injury or diseases in the workplace identify the relevant insurer quickly and efficiently.

In order to do this a centralised database - Employers Liability Database (ELD) will be introduced.

The ELD will be populated by Insurers with Policy number, name, address and renewal dates however additional information will be required from clients, which we as brokers need to provide. Brokers will require:

• The Employers Reference Number (ERN) and commonly referred to as the employers PAYE reference, for the policy holder and any subsidiary requirements.

• The full name of each subsidiary company insured under the Employers Liability Policy.

It is worthwhile noting that under the Employers Liability Act, associated companies require their own Employers Liability Insurance.

If you are aware of any associated companies within your group you must ensure correct and adequate insurance is in place to protect your company fully.

If you require additional information regarding the above please contact our Commercial Team.