Management Liability insurance

[JJT]

At our last insurance renewal the insurance co. was trying to sell us management liability insurance.
This is an overview that they e mailed us:

The current insurance policies protect the partnership if anyone makes a claim. However, people can also make a claim against you personally for your personal negligence (the law has changed in the last few years). Some current claims examples where the individual farmer could be held negligent:

• Moving something on a trailer (e.g. a piece of machinery, or hay bale) and it falls off due to unsafe load/poor driving and causes an accident.
• A walker is injured on a footpath by cattle, with the allegation the farmer should have been aware of the danger of putting animals in the field.
• A self-employed person is injured while using the farmers tractor – HSE investigate, with associated fees for intervention cost of £157 per hour.
• Slurry/mud is left on the road which causes an accident.

Your existing insurance pays for the injury, but a solicitor will then potentially make a claim against you personally for your involvement in the accident. The allegation is you were negligent, so they then claim against the business partners personal assets – house/car/savings/pensions/etc. A separate insurance policy called ‘Directors & Officers’ protects your personal assets, defends you & pays the £157 an hour of HSE investigating the accident (but not the fine they give you). One policy covers all business partners, and employees.


To our way of thinking all the above examples should be covered with our existing public liability insurance. Are they admitting their public liability insurance isn't fit for purpose, or is it something everybody already has? I think it was around £200 and from what I could gather, all it meant was if some "no win no fee" cowboys tried to claim against you personally, the insurance co. would get some big name solicitors to write them a letter saying the individual was acting for the business, so the claim should be against the business not the individual.

Thoughts, seems like a waste of time to me, but what is the change in law mentioned?

Cheers, Joe

 

[Bald Rick]

We have it via AIG (IIRC) ... gives £100k cover for £200 premium.

Like most insurances, it's peace of mind as we move in to a more litigious society.
We also, as is common, have £10m of public liability

 

[Forever Fendt]

rang me yesterday pushing it

 

[solo]

It ticks a box for a new policy sale. Whether you need it or not is another matter.

 

[Exfarmer]

I dont think there is any real change in the law, but insurance companies have tended to shy away of litigation in the courts preferring to pay out often in dubious circumstances. They do however have sa fall back and this is recouping this from the policy holder by showing negligence directly. They are very aware that most business and management are unlikely to attract the aid of the no win no fee companies.
Its a back door way of extracting more premiums

 

[lim x]

Just bringing this thread up as just had renewal notice for this insurance, around 200 charge seems to be what everyone else is paying. Seems a bit of a racket but don't they know how to put the heeby geebies in your mind if you didn't happen to go ahead

 

[ollie989898]

I would suggest that for most businesses that have any real scale about them, the extra £200 makes this a no-brainer really.

 

[Y Fan Wen]

I've just been reading about the Selby rail accident where Gary Hart fell asleep at the wheel of his Defender, fell onto the railway and caused a head on crash between 2 trains. Wikipedia reports that his insurers had paid out 22M over the following 2 years.

 

[Charolais cattle]

The way insurance is these days, u wouldn't know if you were insured at all, my garage insurance was up there in May, with same company this 5 years, no claims no points on licence, and they wanted to take my open driven of my insurance and put it up by 40% , rang few others and got same package as last year, but threw a different broker, but wait for it, WAS STILL WITH THE SAME INSURANCE COMPANY, but different broker and saved £200

 

[Steevo]

The way insurance is these days, u wouldn't know if you were insured at all, my garage insurance was up there in May, with same company this 5 years, no claims no points on licence, and they wanted to take my open driven of my insurance and put it up by 40% , rang few others and got same package as last year, but threw a different broker, but wait for it, WAS STILL WITH THE SAME INSURANCE COMPANY, but different broker and saved £200

Brokers usually take around 30% fee for doing their job. Your new broker may be prepared to take less fee.

 

[Charolais cattle]

Brokers usually take around 30% fee for doing their job. Your new broker may be prepared to take less fee.

Aye but the broker was even taking my open driven of me, even though I'm still insured threw same company

 

[betweenthelines]

I'd have thought most of that outlined in the OP would be covered by Public Liability-having the same thing on two policies would just give the litigious another bite at the cherry.

No one will cover you against the HSE investigation though as you can't be insured against breaking the law.

 

[Steevo]

I'd have thought most of that outlined in the OP would be covered by Public Liability-having the same thing on two policies would just give the litigious another bite at the cherry.

No one will cover you against the HSE investigation though as you can't be insured against breaking the law.

I know they won’t cover the fine, but are you sure about the investigation cost?

@Nigel Wellings would know after discussions about Rradar.

 

[Nigel Wellings]

Brokers usually take around 30% fee for doing their job. Your new broker may be prepared to take less fee.

I wish you were correct Steevo!
Some of the big national brokers do charge obscene commissions on certain types of insurance i.e 30-50%!!!
We average around 17%, up to 25% I feel is not unreasonable. More than 30% is a joke.
As a customer you have every right to ask your Broker/Agent what the commission is they are paid. Do not hesitate to exercise this right.

 

[Nigel Wellings]

I know they won’t cover the fine, but are you sure about the investigation cost?

@Nigel Wellings would know after discussions about Rradar.

HSE investigation costs is definitely covered under the AIG policy sold by NFUM and also the Rural Protect policy underwritten by Axa. Many other management liability policies do not cover it.
In my view it is one of the main reasons for taking out the above 2 policies.

 

[Steevo]

HSE investigation costs is definitely covered under the AIG policy sold by NFUM and also the Rural Protect policy underwritten by Axa. Many other management liability policies do not cover it.
In my view it is one of the main reasons for taking out the above 2 policies.

Thank you. Not just for commenting on your own product but also NFUM too. That gets bonus points in my book.

I'm currently with NFUM and would have raised my thoughts with them regarding what I see as the shortcomings with the AIG policy and that I would be minded to swap to the Rural Protect policy next time around.

Interestingly they commented that they have have others swap back to them for different reasons. It's something I'm intending to do more digging on prior to renewal.

 

[bobk]

Interesting thread , how many times do you have to be covered for the same thing

 

[Steevo]

I wish you were correct Steevo!
Some of the big national brokers do charge obscene commissions on certain types of insurance i.e 30-50%!!!
We average around 17%, up to 25% I feel is not unreasonable. More than 30% is a joke.
As a customer you have every right to ask your Broker/Agent what the commission is they are paid. Do not hesitate to exercise this right.

Thank you again!!

I appreciate your correction, and your honesty!

I absolutely admire your last sentence or two. The sign of a man and company with morals and scruples.

 

[Steevo]

Interesting thread , how many times do you have to be covered for the same thing

That depends which angle you are being covered from. Policies that sound alike can often be quite different.

Some policies suggest greater cover in the headlines than there actually is. Small print can be substantial. Some legal insurance will cover defence but no more.

I have DAS legal insurance through NFUM which I think isn't worth the paper it is written on for many issues. I have NFU "Legal Assistance Scheme" which should also cover things. I also have AIG Management Liability through NFUM. Things are getting more technical and niche.

Despite all of the above, there are many areas legally that I'm not really covered for in many respects. I've had two instances in the past year I have looked into these policies to help solve an issue I faced and found them not to be helpful in the circumstances I hoped that they might be.

The most expensive insurance policy is one that you find is absolutely useless when you want to be able to use it....having paid premiums on it for 20 years thinking that it would be there for a rainy day.

 

[Nigel Wellings]

That depends which angle you are being covered from. Policies that sound alike can often be quite different.

Some policies suggest greater cover in the headlines than there actually is. Small print can be substantial. Some legal insurance will cover defence but no more.

I have DAS legal insurance through NFUM which I think isn't worth the paper it is written on for many issues. I have NFU "Legal Assistance Scheme" which should also cover things. I also have AIG Management Liability through NFUM. Things are getting more technical and niche.

Despite all of the above, there are many areas legally that I'm not really covered for in many respects. I've had two instances in the past year I have looked into these policies to help solve an issue I faced and found them not to be helpful in the circumstances I hoped that they might be.

The most expensive insurance policy is one that you find is absolutely useless when you want to be able to use it....having paid premiums on it for 20 years thinking that it would be there for a rainy day.

Both @Steevo and @bobk make very relevant points about the complexity of these policies. With a farm/household/tractor policy I can generally tell the client 99% of the time what is and what is not covered. I cannot do that with these products- there is so much small print with them. I have such a policy for my own business, feel it is worth paying the premium but I know full well it will not cover every legal eventuality. It is important when you buy these products that people realise they have limitations and many exclusions. On balance I feel they are worth having BUT they wont cover everything.