Comprising a vital part of its ‘Professional Indemnity (PI) Initiative’, BIBA’s brand new ‘Guide to Underinsurance’ offers a range of advice on how best prospective homeowners/those looking to arrange a far-reaching home insurance policy can avoid being unwittingly caught in the very real underinsurance trap. The British Insurance Brokers’ Association was prompted to include this important element to those in the throes of acquiring suitable cover for a property after being privy to the Financial Conduct Authority’s recently published thematic review into commercial claims, which – as the insurance brokers’ trade body quickly highlighted – depicted a worrying level of underinsurance as part and parcel of its figurative revealing.
Elsewhere within its findings, the FCA’s review showed that almost a quarter of the business interruption claims which had been scrutinised, the actual loss outweighed the indemnity period; which is typically set at 12 months. With this very much at the forefront of his mind, BIBA’s CEO, told www.insuranceage.co.uk that; “That is why at the Biba conference next week I will be calling on the industry to adopt a minimum of 24 months indemnity period for most business insurance policies.” Steve White, also went on to add; “This latest publication in the PI series will be of enormous benefit to members, helping them to guide customers in selecting appropriate levels of cover; especially in connection with business interruption insurance.”
Recent FCA Report Leads to Hastened Advice to Insurance Brokers on How to Best Avoid Falling Foul of Underinsurance
Conversing further on the subject with Insurance Age, White went on to suggest that after speaking with a significant volume of insurance brokers who made up BIBA’s membership, he had discovered how challenging they had found it to obtain planning consents; whilst intonating that is certain more urban areas the diminished labour potential (together with lack of materials) was essentially elongating the time required to return damaged properties to their former states. BIBA’s man at the top summarised the reason why the organisation saw fit to include a specific guide to underinsurance in its new Professional Indemnity Initiative, by stressing; “For us, under-insurance, alongside building a framework to operate under the Insurance Act 2015, is one of the major issues of the year and we will continue to do all that we can to help members and their clients manage it.”
Forming the sixth individual guide under the brokers’ trade body’s latest series of guidance publications, BIBA reiterates the need for a minimum 24 month indemnity period whilst grabbing the centre stage on this particular issue, and again used this opportunity to outline how devastating the prospect of underinsurance can be, both from the insured party and brokers’ viewpoint. Written in collaboration with a leading insurance claims advocate, the guide fundamentally serves to flag up what’s universally been described by reviewers as the ‘duties and obligations’ that a broker is responsible for, and how these affect their PI risk. What’s more, it also reminds future policyholders and brokers as to just how in-depth their pre-assessments need to be with direct regards to the pre-requisitional levels of cover in relation to property liability and business interruption.