By Kevin Richards, Technical Broking Director, BHIB Insurance
Deadlines. Everyone has them, and their importance goes without saying. For us insurance brokers, this can involve meeting a quotation deadline to coincide with a council meeting date, incepting a new policy, or confirming a renewal to insurers. Deadlines are part of the process, but the effective dates on insurance policies can often be confused with the renewal date, and cause issues further down the line.
Let’s put this into perspective:
A policy showing effective dates from 1st May to 30th April will be active from 00:01am on 1st May and will expire at midnight on 30th April.
The ‘renewal date’ is typically expressed as 1st May, which is the start of the new period of cover.
So far so good for the process, but where do deadlines come into play?
In this particular example, it is vital that instructions are passed to insurers in advance of midnight on 30th April, otherwise an unwanted gap in cover might occur.
When choosing to move your policy to a new provider, a delay of one or two days (over a weekend, for example) will also result in a later effective date.
Simply put, time management is key.
Brokers cannot act or place cover without explicit instructions from the customer, and insurers are not obliged to accept requests to backdate insurance cover caused by late communication. Any disruption within the process will have a direct knock-on effect, and the gap in cover is inevitable.
Consequences of a Gap
Is a small gap really so bad? It goes without saying; yes.
A gap in the continuity of your insurance cover, however small it may be, can greatly affect certain sections of cover.
A prime example is Employers’ Liability; a legal requirement where an organisation directly employs someone, and must therefore be maintained at all times.
Officials Indemnity/Directors & Officers Liability and Professional Indemnity insurances also rely on proof of continuous cover, in the event of a claim coming to light based upon a past action, error or omission.
During 2021, and into 2022, the UK commercial insurance market has been in a state of flux. Insurers are reviewing their appetite for business in certain sectors, and – for reasons that are not always immediately evident – it hasn’t gone unnoticed that some insurers have decided to pull away from supporting the Councils sector during this period.
The consequences of your Councils policy expiring, without having been replaced or renewed by the expiry date, are potentially disastrous.
How can you avoid the gap?
Keep yourself one step ahead, and a sharp eye on those dates.
Council clerks, or those with responsibility for making decisions on the placement of the annual insurance arrangements, should be fully aware of policy expiry dates, and engage with their brokers/insurers in good time prior to these deadlines.
Alternative quotations may take several days, or even weeks, to compose, and require further finesse after that. The current environment calls for such a level of detail, which is why the process can take even longer than expected.
Deadlines have a way of creeping close, unnoticed until the very last moment, but think ‘sooner, rather than later’, and get started as soon as you can.
Talk with your brokers, keep yourself covered, and remember: Mind the gap.
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