In this advertorial, Towergate Insurance explain the limits many insurers have imposed on their coverage as a result of COVID-19.
Have you seen an increase in your insurance costs and the cover available to you from your broker and insurers? Insurance rates have been on the increase for the last nine consecutive quarters, even before the impact of COVD-19. This is due to several factors such as significant losses caused by global catastrophes.
In the period 2017-2019, £77.2 billion was spent each year on hurricanes, windstorms, typhoons and wildfires, which has fed through to the UK market. Additionally the following are having an impact:
- UK claims for flooding and storms are increasing in both frequency and severity on an annual basis.
- Double-digit claims inflation on Motor Fleet and Liability losses due to Brexit and exchange rates, growing claims litigation culture, regulatory reforms (e.g. Ogden Rate).
- Property losses from cladding since the Grenfell residential fires and various food and hotel fires have had a subsequent impact.
This has meant that several insurers and Lloyds syndicates no longer offer cover options to certain areas including the care and charity sectors. As a result there are fewer markets to compete, so insurers can drive pricing and impose cover changes, and are now highly selective when looking at new clients, targeting the best risks based on CQC and claims performance.
Impact across the charity and hospice sector
In these uncertain times, the impact of COVID-19 has led insurers to review exposures around potential liability and business interruption claims, including those due to the closure of many hospices and charity shops. Several actions have been taken by insurers to the sector including:
- Total withdrawal from offering insurance solutions to the sector
- Most insurers looking to pause offering terms to potential new clients
- Most insurers looking more closely at new startup operations
- Most insurers are looking to break existing Long-Term Agreements (LTA), through increases to rates and premiums and updating policy wordings, in some cases using a combination of both.
- Cover changes are not blanket – some markets are excluding COVID-19 totally including the public liability covers, others are looking to offer limited cover around COVID-19 on public liability with severe restrictions, while others continue to offer wider protection and limits
- One insurer in the sector is restricting cover to go beyond COVID-19 exclusion and now excludes communicable diseases, which could include Norovirus or the flu
Even if you haven’t been affected by the market changes yet it is unlikely that you will not be affected moving forward. We would recommend that you contact your insurance broker at least 3 months ahead of a known renewal to discuss options and market movements, as these continue to change on a regular basis.
Towergate Insurance have over 100 years of experience in the not-for-profit sector and are specialists when it comes to finding the right solutions for charities and hospices.
- For more information call James Anscombe on 07973 784006 or email firstname.lastname@example.org