If you’re a business owner or landlord, ensuring you have public liability insurance cover in place is a critical part of business planning. Ultimately, it’s designed to give you peace of mind if things go wrong.
Unfortunately, many business owners and landlords find themselves facing personal injury claims when their liability insurance has lapsed accidentally.
In this blog, we’ll look at how you can avoid this from happening.
The automatic annual renewal trap
We‘ve all become familiar in our day-to-day dealings with the automatic annual renewal of our insurance policies. As a busy business owner or landlord, it’s relatively easy to overlook the annual renewal process and assume that your policy will renew on an annual basis without any input needed.
However, it’s important to take the annual renewal process seriously and ensure that somebody within your company/organisation owns the task of annual renewal. It should be diarised well in advance of the renewal date and shouldn’t be taken for granted that it will automatically renew.
All too often, failure to renew your public liability insurance can expose your business to significant financial and legal risks. If a personal injury claim is made against you, either as a business owner or landlord, there could be serious financial implications.
In our practice, we’ve had many clients approach us to defend a personal injury claim where their business’s insurance renewal has lapsed or was overlooked, so it is more common than you think.
Your insurer refuses to indemnify you against the claim.
In some cases, you might have liability insurance but your insurer may refuse your indemnity.
This usually means that your insurer is denying coverage under the terms of the policy. This can happen for various reasons, including:
- Your failure to notify your insurer of a claim in a timely fashion
- Breaches of the policy
- Your failure to declare something to the insurer when the policy was initially incepted
- Sometimes, there may be other reasons why the claim is not covered under the terms of the policy.
This is another reason why it’s important to engage with your insurance provider around your renewal date. You need to ensure they’re made aware of any changes in circumstances that could affect your coverage.
When your insurer denies your claim
Usually, when you notify your insurers of a claim, they‘ll either deal with the claim in-house on your behalf under the terms of your insurance policy or instruct their own solicitors or claims handling agents to deal with the claim on your behalf. If they refuse to indemnify you against the claim, you’ll be left in a position where you may have to meet the cost of the claim and associated legal costs as a company or landlord yourself.
In this highly complex situation, it’s often prudent to seek legal advice.
Reputational risk
Forgetting to renew your insurance or finding yourself in a position where you have been refused an indemnity as a business owner or landlord could lead to your business suffering a significant reputational risk. There are several steps you can take to protect your position to ensure you do not find yourself in a position where you are having to potentially meet the damages payment arising from a personal injury claim and the legal costs which are associated with the claim.
- Diarise reminders to ensure that insurance cover is reviewed well in advance of the renewal date
- Ensure you have adequate cover in place
- Make sure that the cover you are taking out covers your business needs
- Make sure that you provide full and frank disclosure to your insurers at the renewal stage and during the life of the policy. If anything changes, ensure you notify your insurers of any changes to your business circumstances
- Ensure that you comply with the terms of the policy
- On renewal, make sure you check the terms and conditions of the policy carefully to ensure that the policy continues to meet your business needs
- If you are a larger organisation, appoint an individual who takes care of insurance and is the point of contact with insurers to deal with renewals, notification of claims, and any queries regarding the terms and conditions of your insurance policy.
How Gorvins Solicitors can help
If you’re a business owner or landlord and you have a claim brought against you by either your employee or tenant, please contact Stuart Biddle, Head of Personal Injury, on 0161 930 5129 or email stuart.biddle@gorvins.com to discuss your requirements.