We were invited by a firm of accountants to carry out due diligence on their current insurance cover. They were concerned over the scope of the policy and were requested to identify any gaps in their cover. The policy was written on an inclusive office policy and therefore the cover was predefined rather than the client specifying what cover they required.

Following a full review of their insurance we identified the following:

• cover for portable laptops was restricted to the office only and therefore were not covered when away from own premises - they have over 30 laptops
• there was no cover for loss of computer data or reinstatement of information - they would have to self fund the reinstatement of information which could run into many £1000’s
• we found that although the level of security was high with CCTV and security guards on site, they were in breach of the physical security warranties as the door locks were blow the requirement specified in the policy  - any theft claim would have been declined by insurers
• the policy did not cover the loss of, trace and recreation of clients documents -the cost implication was tens of  thousands of pounds
• The cover arranged under the Business Interruption was on the wrong basis  - there was no cover for loss of revenue and the limit of indemnity for increase cost of working and the indemnity period was inadequate leaving the insured badly exposed, should they have made a claim
• no cover for loss of revenue

We also identified areas of concern under their Professional Indemnity Insurance as well as the Directors & Officers where cover was limited or subject to a high excess than had been anticipated.

Insurers will always rely on the fact the as the insured, you, you should read through the policy document to understand the limits and limitations of the policy as well as the warranties and exclusions.

In reality, people very rarely read the policy relying on the broker to arrange cover. The broker will rely on the fact that they only arrange cover based on your instructions and again it is your duty, not theirs to read through the scope of cover to make sure that it meets your needs.

After discussing their views on risk management we compiled a revised schedule (tender document) of insurance detailing the specific insurance requirements which was used in successfully re -negotiating their insurance  requirements at renewal

Not only did they feel confident that the realignment of their insurance cover matched their expectations, they are now confident that in the event of a claim, they will be fully covered and be able to provide their services to their clients with the minimum of disruption.

The next stage will be to write an implement a business continuity plan.