Business Insurance News

Smaller premiums for the big society

Fri, 23 Jul 2010 22:38:00 GMT

Voluntary groups could get low-cost insurance as part of the government's "Big Society" campaign.

Prime Minister David Cameron says he wants to work with the insurance industry to offer dedicated cover to community groups which use volunteers. If his idea is taken up by the industry, groups could get public liability insurance for as little as £5 to £10 a month, which would then cover volunteers against being sued in the event of an accident which injured a member of the public.

The Association of British Insurers says it is ready to discuss any ideas from the government.

There are some big questions about how such a plan would work in practice. Most significantly, it's not clear whether the government will offer any subsidies to insurers to encourage them to offer such policies at those rates.

Other questions yet to be answered include whether there'll be a limit on the number of volunteers covered by one policy (and if so, what it will be) and whether the tradeoff for low premiums will be a reduced liability limit.

The insurance issue has already come up in some local schemes. Hackney's local authority has insisted volunteers working in parks bought their own liability

Landlords warned over rental default risks

Sun, 18 Jul 2010 14:41:00 GMT

As many as a third of landlords could lose out each year if they don't have adequate landlord insurance to cover against non-payment of rent.

That figure comes from moneysupermarket.com which said 1 in 3 landlords had at least one tenant who had gone into arrears. It noted that specialist landlord insurance can not only protect against unpaid rent, but also the costs involved in collecting this debt or even evicting a tenant.

The site also warned that homeowners renting out their property as a temporary measure were at particular risk of being uninsured. That's becoming more common as owners delay selling until the local housing market recovers. The company explained that standard home insurance policies are invalidated as soon as the property is used to make a profit, for example through rental income.

Landlord insurance can be bought for less than £100 a year, though this only covers lost rent. Policies including related costs such as eviction start at around £134.

In many cases the insurer will require a credit check on the prospective tenants and may insist they reach a specified level on the checking agencies ratings

Lloyds of London highlights insurance implications of the World Cup

Wed, 23 Jun 2010 18:35:00 GMT

Lloyds of London estimates the total value of insurance for this year's World Cup is £6.2 billion. That's around £3 billion for the various stadiums, £3 billion for activities related to the event such as broadcasting, sponsorship, competitions and special offers, and around £200 million in liability cover.

Among the incidents which could be covered by such insurance are delays to games, whether minor and causing problems for broadcasters with advert break schedules, or major and meaning fans are unable to attend.

FIFA

The game's international governing body says it has spent around £400 million on insurance against the costs which would arise if the tournament had to be postponed or relocated. Such an event took place with last year's edition of the Indian Premier League in cricket where security fears means the tournament was relocated to, ironically enough, South Africa.

FIFA says it has not taken out coverage against the tournament being cancelled altogether, reasoning that such an event is "extremely unlikely" even if a delay became necessary.

Retailers

A wide variety of retailers are offering special deals offering discounts or refunds if their national team wins the World Cup. In many cases they will have taken out an insurance policy which will pay

Insurance premium tax could be on the rise

Wed, 16 Jun 2010 15:10:00 GMT

The insurance industry is bracing itself for potential steep rises in taxes on premiums, with predictions it could simply lead to a drop in cover.

At the moment, the tax applies to all forms of insurance except for life insurance and permanent health insurance (also known as income protection insurance, designed to replace lost wages until retirement age in the case of long-term illness). Most premiums are taxed at a 5% rate, though it is 17.5% for both travel insurance and insurance related to purchases such as with extended warranty schemes.

It has been reported that the government is reviewing these rates, with rumors that the 5% rate could either double or be raised to the 17.5% level.

The British Insurance Brokers Association noted that the number of people ditching insurance policies is already rising as a result of the recession. It warned that there was a serious risk that higher tax rates, and thus higher premiums, would mean more people would cut back or even drop insurance altogether.

As well as exposing consumers to greater risk, there is also a theory that such a decline in cover levels might mean the total tax revenue doesn't rise by

Database helps hunt for missing company insurance policies

Sun, 14 Feb 2010 19:42:00 GMT

The government is planning to create an electronic database of company-provided insurance policies for employees. Its designed primarily to help victims of industrial diseases who've been unable to get compensation because company records have gone missing.

An estimated 3,000 workers a year miss out on payments for work-induced sickness because the records can't be traced. One of the most common areas for such problems is lung cancer mesothelioma, caused by exposure to asbestos, where the victims may not develop the symptoms for 30 years.

By this time the firm may have been taken over, broken up or even gone out of business. And while the cancer sufferer will know who they worked for at the time, it's extremely unlikely they will know which insurer provided the liability cover. Of course, even if that can be discovered, there's no guarantee the insurer will still be in business either.

The database will be funded by a levy on existing insurers. They'll also provide a fund which will pay out where even the database can't trace the original insurer. That idea has gone down badly with the Association of British Insurers, which argues that it's unfair that today's insurers should pay for the mistakes of