Use Caution When Selecting Your Insurer
With no sign of any improvement or recovery in the economy likely during 2012, it is not surprising that firms will seek to continue to reduce and improve their overheads as margins are squeezed even further.
We often find that Insurance is a significant overhead for many companies, but particularly those within the the Construction Industry due to the higher risk factors affecting this sector and a general reluctance amongst many Insurers to provide cover to what is perceived to be an often loss making section of the industry.
The need for these firms to manage their Construction Insurance as effectively as possible has never been greater, but so has the risk of being insured with financially insecure markets.
Unfortunately, recent history is littered with examples of such failures with Trinity, Builders Accident, Independent Insurance, The Underwriter and more recently Quinn Insurance all suffering the same fate.
Whilst these weaker Insurers have generally been more easily identifiable to Brokers due to their consistently cheap pricing and poor claims service, the problems within the Euro Zone have brought other, previously secure markets, into the frame.
The problems now affecting the French insurer Groupama, are a classic example of this, as we now find the rating agency Standard and Poors, reducing the security rating of the large mutual insurer to virtual junk status.
In contrast to recent failures, Groupama have not been known to consistently undercut the market with overly keen rates and have provided a claims service often equal to, or better than their peers, now find that their Parent Company exposure to Euro Zone debt has meant the UK arm is up for sale and we will see another Insurer exit the market in the not-too-distant future.
The need to select a financially sound Construction Insurer has therefore never been more acute. The requirement for companies to review their insurance overhead will remain with us for some foreseeable time, but I always urge caution when making comparisons based on price – if something appears too good to be true, it’s usually because it is!
If we can assist with an Business Insurance Quotes that you may require then please do hesitate to contact us.
Mark Richardson
Director
