Insurance solutions for businesses operating in the Water Recreation Sector have been slow to emerge compared to other sectors. Until recently, a boat owner may find himself in need of insurance products to cover properties, content, financial risks, ships, pontoons and collateral in various legal bills. When the first “Integrated” Marine Traders policy that provided cover for all of these risks emerged in the late 1990s, the market was in no hurry to adopt this new approach. Some key insurance providers in the sector did not issue a “Combined” solution until the end of 2007 and some still offer independent coverage.
Benefits of Combined Insurance Policies
There are many benefits to business owners having a single insurance policy that covers cover for their many needs. First and foremost it streamlines management processes by significantly reducing documentation, thereby saving business owners time and money. It also ensures that the owner has one renewal date to deal with. Perhaps the biggest benefit to businesses is the premium savings that can be made with this type of plan: the extra cover that can be placed on a single policy gives the provider an additional measure to reduce the overall insurance cost.
Marine Insurance Providers
Integrated Insurance policies for offshore businesses are now available to many professional providers. While most of these providers will work directly with the public, some will only deal with insurance brokers. A public health insurance provider will only offer its product. Dealing directly with insurers not only imposes restrictions on you in terms of available insurance options but also means that you have to invest a significant amount of time in purchasing around competitive quote providers. An independent Marine Trades Insurance broker can save you and your business time and money by running a full-fledged marketing business on your behalf.
Professional vendors can also help design a bespoke cover in contrast to the standard “off-the-peg” solution. This can give your business significant benefits when standard policy releases are amended or removed, increasing the scope of protection. You may also benefit in the event of a claim:
Where the business buys directly from the insurance provider, in the event of a claim the owner refuses to negotiate an insurance agreement. This can put the business in a bad position where there is a dispute over liability or payment. Using an independent professional reseller to arrange the cover provides the business owner with an experienced attorney in the event that he receives a claim. The seller is obliged to look after the client at all times and the special seller may be able to assist in cases where claims have been initially rejected.
Integrated Maritime Insurance Policy Framework
Before explaining the policy structure it is necessary to emphasize the importance of ensuring that the appropriate collateral limits form the basis of your insurance cover. It is tempting for businesses that want to reduce their costs in order to put their businesses on purpose. This can be dangerous in the event of a loss, as the insurer will likely apply the “Rate” policy when less insurance is available.
Medium Term: In the event that the insurance is less than any claim payment it will be based on the guaranteed amount of the actual amount. For example, when a business has stock insurance worth £ 100,000 for only £ 50,000, the business is guaranteed 50%. In the event of a loss of £ 25,000, the insurer will use the rate and pay only £ 12,500.
The above example emphasizes the importance of businesses building the right foundation to cover with their supplier and negotiate a competitive premium. An independent retailer with access to many different markets will help you find the right solution with the most affordable premium.
Maritime Trade Insurance Policies generally follow the same model, except for the uncertainty of where something can come from. For example, some policies will include pontoons in the Injury category while others may include them in a basket at Sea. Described below is the standard policy structure:
Property Damage: This Section will inspect all property except ships on your business premises. It is divided into different sub-categories which vary from provider to supplier, but the classification of the assets in these sub-categories enables you to benefit from lower premium prices for lower-risk items to be covered. Usually, the Injury Category will be categorized as follows:
- Properties (with incoming or outgoing cover)
- Marine Installation (pounds, slides, water / dry dockets etc.)
- Computers and Integrated Resources (on business premises)
- Machinery & Equipment (on business premises)
- General Stock (on business premises)
- Attractive Precious Stock (on business premises)
- All other content (on business premises)
Glass: Some insurers will put glass inside the Cover of the Properties. However, most Marine Trade Insurers will not cover Glass unless specifically requested and will charge an additional fee. The cover will be provided with external and internal glass with additional extensions available for items such as glass signs and hygiene items.
All Risk Cover: Must be available to businesses wishing to protect items they remove from the business premises such as:
- Tools and Equipment
- Laptops, mobile phones etc.
- Trailers (thease can also be covered under the sea section)
Frozen Foods: Covers the loss or damage of fuel from temperature changes in refrigerators or freezers due to damage or disruption of energy supply.
Road goods: Prevents loss of property while on the road or while temporarily stored on the road. Business owners need to be aware of the difference in coverage rate from policy to policy and the number of complaints worked by each insurer to cover.
The property insurance premium in Transit is based on a combination of the total guaranteed value for each vehicle, the number of used vehicles and the total annual turnover of the business.
This Section may also be extended to ensure postal delivery and delivery by third parties.
Transit shipping assets are not included in most policies unless specifically stated. However, it is possible to include shipping insurance while on the go by enabling the Marine section of the policy. Planning a policy in this way can save business money if ships are the only thing that needs to be insured while on the go.
Exhibitions: Includes exhibitions, stands and other items in exhibitions.
While insurers incorporate this Section into their policies, an entity may reduce costs by allowing the Maritime Division of their policy to protect vessels at the exhibition rather than paying their insurers the additional amount of the same benefit.
Business Interruption: Includes Loss of Total Profit and / or Additional Operating Expense in the event the business’s business activities are affected by insurance risk, such as fire or flood. Extensions can be purchased to cover losses from risks such as:
- Violation of the Canal
- Injuries in the vicinity of buildings or contracts or exhibition spaces
- Prohibition Availability in close quarters
- Fung Damage, Patterns, Jigs, Deaths, Tools, Programs, Designs, etc.
- Loss or Damage to Real Estate Property
- Loss or Damage to Buildings on the Move
- Damage to Supplier or Customer Area
- Loss of Resources
- Disease and Disease
As it is important to protect the property properly in order to avoid insurers who use “Rate” in the event of a claim, it is important to ensure that the appropriate level of Full Profit is used to obtain cover for Business Interruption.
The definition of Total Benefit in insurance terms is different from that of accounting. An entity should always check with its supplier for specific terms of business disruption policy but the procedure below provides a standard plan that should be consistent with most insurance policies:
Obtain a statement of income for the last month of operation and get the total benefit amount.
Office of Employee Responsibility Tracking Office
Review each cost line item in the income statement to identify operating costs that are not directly related to production, also called “stand costs.” For example, office hire should be whether the business is operating or not, and the price does not change based on production, and some employee salaries (such as temporary, part-time employees) will end when the trade is disrupted.
Office of Employee Responsibility Tracking Office
Include each of the costs identified in Step 2 for the total profit earned in Step 1 to earn the total profit, or the company’s losses due to lack of performance.
Money: Provides cash insurance, checks etc while on site, on the go or at night banking services. Some policies will also provide for cash increases in directors’ homes and exhibition or contract facilities. Policies usually provide a Personal Accident extension that offers lower amounts in the event of Death or Disability arising from ******* in the case of attempted robbery or theft.
Defective Vessel Title: Returns the value of a vessel purchased or sold by the business if the actual owner of the vessel returns it (or its value). It will also provide collateral where the business has a valid claim brought to it for failure to provide a good shipping title.
Employer’s obligation: It is a legal requirement for all businesses to administer Employers Liability Insurance where they employ people whether paid or voluntarily. It exempts the business in respect of its liabilities arising from the death, injury or illness of its employees
The premium is based on the total annual salary of the business. Each job within the business staff will attract its own premium rate based on the visible risks associated with that job. A rigger, for example, will draw a higher premium rate than a hard-working yard worker.
You must ensure that you accurately announce your annual wageroll to insurers. Deliberate non-disclosure may be regarded as failure to disclose the truth and may result in the claim being rejected.
Only subcontractors should be treated as employees in respect of insurance. They usually work under the direction of Insured and do not provide their own equipment or tools (other than small hand tools). The cover will therefore be arranged for those individuals through the rental business under the Employers’ Section of their policy.
There is a need for businesses to verify their employer’s reference number (ERN) or as well known to employers PAYE Reference to insurance including Employers Liability recorded in the middle of the Employers Liability Tracing Office (ELTO). This is to ensure that the relevant insurance company can be identified where the applications are made by the person, which may be years after the end of their employment. It is not uncommon, for example, for certain diseases or conditions such as respiratory disease, industrial expansion or recurrent injuries that take years to develop.
ERN is a unique business-specific and consistent reference which means it will identify the right employer and then insurance for any period of time from 2011 onwards.
Social Responsibility: Reminds you of your legal debts from third parties from your business activities that result in death or injury.