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When a loss adjuster is appointed
by my insurance company, are they working on my behalf or do
assessors need to be appointed? |
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The role of the loss adjuster is
to adopt an impartial position between yourself and your insurance
company. Although the fee costs of a loss adjuster are paid
by the insurers, the amount of the fee that the loss adjuster
charges, is based on the amount of the final settlement made
to the policyholder. This balances the position. You are, of
course, perfectly entitled to appoint assessors who you would
pay to represent your position and to deal with the loss adjuster
on your behalf. Their fees are not covered by the insurance
policy. |
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What information will be required to
deal with my claim? |
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The policy provides cover for reasonable
accountant's fees incurred in producing the necessary financial
information in order for your claim to be dealt with. This is
likely to involve copies of historic accounts (usually for the
last three years if your business has been trading that long)
and turnover figures, on a monthly basis, for the twelve months
leading up to the date of the incident. Weekly and monthly turnover
figures are then usually required from the actual date of the
incident, up to the date when it is agreed that the business
has recovered to normal levels of trading as they existed prior
to the incident. You should note, however, that the policy will
not provide cover for any accountant's fees incurred in actually
negotiating settlement on your behalf. |
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How long will it take to settle my claim? |
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There is no hard and fast rule as
each incident can have a different effect on the normal levels
of trading of your business. On a regular basis, we will consult
with you in order to determine how the business is recovering
and what measures can be taken to enhance the speed of recovery. |
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Obviously cash flow is important and
can you arrange for payments on account? |
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Depending how long your business
takes to recover, arrangements can be made for regular interim
payments to assist with cash flow. Financial information will,
however, have to be produced in the first instance in order
that an assessment can be made as to the amount that should
be paid on account. |
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Who pays my employees' wages? |
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Wages normally represent a standing,
rather than variable, overhead unless you have a workforce where
staff can easily be replaced. In this latter instance, it may
be appropriate for some staff to be laid off until the business
has recovered to a sufficient level where they need to be re-employed.
You can arrange for cover, in addition to loss of gross profit,
for wages, thus ensuring that the wage roll is met on a regular
basis by your insurers. |
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What is covered under the business interruption
section of the policy? |
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This section of the policy only
comes into play once there has been a valid claim met under
the material damage section of the policy. It provides cover
for the loss of the gross profit element of the reduced in turnover
which occurs as a result of the same incident, as distinct from
any other intervening cause. When assessing the loss of gross
profit, any positive or negative historic trend in turnover
will be taken into account. There will also be deductions for
any savings in variable overheads. Any increased costs of working
that are economically incurred in avoiding or diminishing the
loss of gross profit will also be added to the claim. For example,
if your business is closed for a length of time, there may be
savings in delivery and other similar costs but it may also
be necessary for additional advertising to be undertaken in
order to encourage customers to buy more goods. |
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What happens about VAT? |
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If you are a VAT registered business,
you will be able to include any payments that you make in connection
with the insurance claim as part of your normal VAT return.
In other words, your insurance company will not pay the VAT
element of any claim. If you are not registered for VAT or are
partially exempt/zero rated, either all or the relevant percentage
of VAT will be paid by the insurers. |
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Does the policy cover the cost of moving
into alternative premises? |
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If it is necessary for your business
to be relocated in order that trade can continue, even at a
reduced level, the insurers will meet the cost of relocation
and additional expenditure provided that these are economically
incurred in avoiding or diminishing the loss of gross profit.
They will also pay for the cost of moving you back into the
original premises once these have been repaired. |
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If we are not adequately insured, how
will the settlement be calculated? |
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If the level of insurance cover
that you have is inadequate, your insurers will only pay a proportionate
part of any claim. The percentage is calculated on the basis
of what you are actually insured for as a fraction of the amount
for which you ought to have been insured. |
