Insurance expert James Wallace affirms the need for using compliant paperwork and advises how to ensure you remain covered in the event of winding down your business.
Insurance is designed to protect your business against legitimate claims. Insurance should not be regarded as a backstop for poor work practices. Premiums can only be kept in check if there is a claims history acceptable to the insurer. To help minimise risk, it is important that all aspects of your work are of a high quality and avoidable risks are reduced.
Claims and paperwork
Can your business afford not to have up to date and compliant paperwork? Paperwork is an essential part of your business; it helps provide information to your clients in a clear manner and also helps to protect your business.
Filling out compliant paperwork but performing a sub-standard inspection can still result in a claim. However, if the compliant paperwork is deemed to have been completed thoroughly and of a ‘high’ standard, then it can be assumed that the inspection was of the same quality thereby minimising the risk of a successful claim against you.
But when a claim does happen, you must follow your insurer’s procedures.
It is imperative that you notify your insurer as soon as you become aware of any potential claim. Most insurance policies require you to give written notice of any claim, writ, summons or notice as soon as you are made aware. Read your policy wording to make sure you have advised your insurer of potential claims within their required timeframes.
Your broker or insurer should be able to provide you with advice on how to proceed before lodging a claim and paying an excess.
In the event that you wish to settle with the claimant without making a claim make sure you get a release signed. A release is an agreement that in return for settlement money from you the insured or the insurance company, the claimant will discontinue pursuit of the claim.
What is run-off cover?
Have you been conducting inspections or providing pest management on a “claims made” wording? If this is the case, then the policy will only respond whilst in effect or current. What this means is that, should you close the business and cancel your insurance and a claim is notified after the cancellation, the policy will not respond. To avoid these circumstances, you need to take out run-off cover, which can be purchased for a 12-month period or multiple years. Discounts usually apply at each renewal period.