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News

The team at CCI like to keep a keen eye on the news so we can stay up to date on all the latest industry topics and developments, keeping us at the forefront of the insurance industry and helping us provide our clients the very best insurance solutions, now and into the future.

We also like to keep our clients up to date on all these topics and any internal CCI news we feel you may find interesting and helpful.

If you would like to speak to us directly about these news topics we'll do our best to answer your questions or if you'd like to find out anything further on CCI's latest company news, please give us a call and we'd be more than happy to help.


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Latest Company News

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The Insurance Act 2015 - what businesses need to know

The Insurance Act is a piece of legislation designed to modernise Britain’s insurance industry. The current regulations which govern the contracts between businesses and insurers are over 100 years old. The Insurance Act received Royal Assent on 12 February 2015 and will come in to force on 12 August 2016. The areas of legislation which are affected by the Act are as follows:

  • disclosure and misrepresentation
  • proportionate remedies
  • warranties
  • fraudulent claims

 

To read the Insurance Act 2015 in full please go to www.legislation.gov.uk

 

What the reforms mean for businesses

The aim of the Act is to remove rules which no longer reflect good commercial practice and balance the interests of the insured and insurer to put both parties in a neutral position. The Government estimates businesses will benefit by about £100 million over the next ten years through lower litigation and transaction costs.

 

What has changed?

1. Disclosure and misrepresentation in business insurance contracts When obtaining insurance under the current law business owners are required to disclose anything which may influence an insurer in deciding whether to accept the risk and at what premium. Under the new Act, a new ‘duty of fair presentation’ applies and whilst there is still a requirement to disclose all information which a business (“the insured”) knows or ought to know, in the absence of full disclosure the duty is still met if the insurer is provided with sufficient information to enable them to ask more questions. This puts the insured and the insurer in a more balanced position. In gathering the information to disclose, a business is expected to undertake a reasonable search of the information available to them, and the Act provides clarity around who must be included within this search (where applicable):

  • senior management within the business i.e. anyone who plays a significant role in the making of decisions about how the businesses activities are to be managed or organised
  • a person for whom cover is provided by the insurance
  • anyone who is responsible for the procurement of the insurance

 

Information should be presented in a manner which is clear and accessible, the intention is to prevent ‘data dumping’ where excessive information is sent to insurers with the expectation that they will pick out what they need. The duty of fair presentation applies to new business and renewals from 12 August 2016. It also applies to mid-term adjustments effective from 12 August 2016, even if the policy was taken out before that date.

 

2. Remedies for non-disclosure or misrepresentation

Currently in the event of a non-disclosure or misrepresentation, the insurer is able to treat the policy as if it had never existed and refuse to pay any claims. The new Act brings in a fairer, more proportionate approach whereby if the breach was deliberate or reckless the insurer can still walk away from the policy, refuse to pay any claims and retain the premium. If the breach was not deliberate or reckless, the remedy available depends on what the insurer would have done had the full information been available to them when the policy was taken out.

Available remedies:

  • if the insurer would not have accepted the risk, then it can cancel the policy from inception, refuse to pay all claims but must return the premium
  • if the insurer would have accepted the risk but on different terms, the policy is treated as if those different terms had been applied
  • if the insurer would have charged a higher premium, it can proportionately reduce the amount it pays on a claim

 

3. Warranties

A warranty is a term in an insurance contract which must be strictly complied with. Under the current law, if a warranty is breached, the insurer is discharged from all liability as from that date, even if there is no connection to a claim and the breach can be rectified. After the new Act comes in to force, in the event that a warranty is breached, the insurer’s liability will be suspended rather than discharged. If the insured can rectify the breach, cover is restored. Where a warranty or other term has been breached, an insurer will not be able to decline continued cover if the insured can prove that there was no causative connection between the breach and the loss. The Act also abolishes ‘basis of contract’ clauses, a statement an insurer can add to documentation which automatically transforms statements made by the insured into a warranty.

 

4. Remedying fraudulent claims The new Act clarifies the remedy available to an insurer in the event of a fraudulent claim. The insurer has the option to terminate the contract from the time of the fraudulent act and is not responsible to pay the claim. If the insurer had made any payment in respect of the claim, it is able to recover those payments. However, the insurer would remain liable for any genuine losses prior to the fraudulent claim.

 

Next steps for businesses The Act will come into effect on 12 August 2016, extending to every commercial insurance policy written in the United Kingdom (with certain exceptions). We will be in touch to discuss your insurance requirements in good time before your renewal date, in the meantime you should start to think about how the changes will affect you, such as what information you may need to disclose, who holds this information within your business and how you might capture it.

 

What we’re doing We are working with insurers and other partners to ensure our processes, procedures and documents are ready for the Act. We will issue further updates in this regard as more information becomes available but in the meantime, should you have any questions, please call Simon Turner on 020 7637 1606.

 

Insurance Premium Tax increase announced for November 2015

Chancellor of the Exchequer George Osborne caught the insurance industry by surprise in his July 2015 budget with an announcement that the standard rate of Insurance Premium Tax (IPT) will rise from 6% to 9.5% from November 2015.

 

Disappointment from the insurance industry

News of the increase was met with disappointment by insurance industry. The British Insurance Brokers’ Association (BIBA) CEO, Steve White, said: “We are extremely disappointed in this rise in Insurance Premium Tax and will mean insurance will become more expensive for the public as a result. Those hit by this stealth tax will include the 20.1 million households with contents insurance; 19.6 million with motor insurance and 17 million with buildings insurance. The Government has been working with the industry to reduce the cost of insurance for consumers - including a summit chaired by the Prime Minister. It therefore seems counterintuitive to be taking measures which will add to the cost - effectively taxing protection. We hope the Government will review this rise and correct it in further budgets.”

Huw Evens, director general at the Association of British Insurers, added: “Insurance Premium Tax is a tax on people and businesses at the point at which they buy a general insurance product. So it’s very disappointing to see a more than 50% tax increase being imposed on consumers, especially when the insurance industry and Government has worked so hard in recent years to bring down the cost of essential insurance.“

 

What is Insurance Premium Tax (IPT)?

The standard rate of IPT is charged on most forms of insurance, except for travel insurance and insurance on mechanical/electrical appliances, which are charged at a higher rate of 20%. There are also a number of forms of insurance that are exempted, such as long term insurance products including life insurance and any forms of reinsurance.

According to the HMRC the new standard rate will be due on premiums treated by the legislation as received on or after 1 November 2015. Where insurers operate a special accounting scheme the new standard rate will only be applied to premiums relating to risks covered by the terms of a contract entered into after 1 November 2015. However, from 1 March 2016, the new standard rate will apply to all premiums, regardless of when the contract was entered into*.

 

Previous rises

IPT came into effect in October 1994 as a tax on general insurance premiums. The last time the standard rate of IPT was increased was in 2011 when it was raised to 6% from 5%, which it had been since 1999. Insurance Premium Tax was forecast to raise £3.2 billion in 2014–15 according to the Institute for Fiscal Studies** and according to the BBC the hike in tax rates in 2015 will raise about £1.5bn a year for the Exchequer***.

 

Want more information?

It is still early days so we’re working through the questions our clients may have about the IPT adjustment and working with insurers and suppliers to ensure a smooth transition in November. If you have any questions about your current insurance arrangements and the effect the rise in IPT may have on them please speak to us.

 

For detailed tax advice you will need to speak to your accountant or other professional tax adviser. You can also go to the HMRC website at www.gov.uk for information on the types of insurances affected, exemptions and detailed information about IPT.

 

* Source: HMRC www.gov.uk/insurance-premium-tax

** Source: Institute for Fiscal Studies, A Survey of the UK Tax System November 2014.

*** Source: BBC News www.bbc.co.uk/news/business-33445567

How do you check your employees are Licensed to drive?

From 8 June 2015 the photo card licence counterpart will be officially withdrawn.

 

At the same time paper driving licences will no longer be updated with endorsements. From then on the records held by the DVLA will be the only way of checking endorsements.

 

How will you check that your employees are entitled to drive?

 

The DVLA already provide the ‘View Driving Licence’ service, before the new system comes into place they will provide an additional service; ‘Share Driving Licence’. By logging into the View Driving Licence website, drivers can generate a code which will allow access to the Share Driving Licence website for employers to see the driver’s licence status, endorsements and what vehicles they can drive. You can use the ‘Checklist’ link to an application form to check a driver’s details and entitlement.

 

Be prepared for Winter

The UK's Met Office has issued winter weather warnings for much of the country. Heavy snow and gale force winds are expected to hit parts of the UK over the coming days.

 

To help protect your and your customers' property, here are some simple steps you can take in the event of extreme winter weather.

 

Snow or Ice

  • Avoid travelling if possible, but if you have to make a journey, take a phone, warm clothes, food, water, boots, torch and a spade with you. Also let someone know the route you will be taking and your estimated arrival time at your destination


Grit staff and customer parking and pedestrian access routes within your property

 

Windstorm

  • To help prevent windstorm damage to items in the open and surrounding areas, ensure they are secured, covered or moved indoors
  • Close and securely fasten doors, windows and shutters


To be kept further informed of both potential severe weather and possible flooding, you may wish to sign up for automatic alerts available from:

  • Met Office severe weather email warning service
  • EA's/ NRW/SEPA's floodline warnings direct service


We hope you find this information helpful.

 

Are your directors protected from cyber attacks?

 

A poorly managed cyber incident could land a company’s directors in court and cause significant reputational damage. Middle market companies may benefit from reviewing their insurance policies to ensure they’re suitably covered. The days when the internet was seen as the next wild west may have faded – connectivity now comes in our phones, cars and TVs, and most of us rarely log off. But with that easy familiarity comes a dangerous complacency. Cyber security is now a worldwide concern yet analysts fear that, across many different industry sectors, some company directors are failing to take their responsibilities seriously by delegating security to IT departments, when it should be of critical concern to the board.

 

Facing the jury

Recent examples of how serious attacks can be are legion – from the very public exposure of stolen customer passwords and compromised accounts at Apple, Facebook and Sony, with all the associated brand damage and loss of trust, to the stories lawyers and executives mention off-the-record, including espionage by competitors leading to lost contracts and market failures.

 

Employees arguably pose the biggest cyber threat

If a cyber breach happens, directors could find themselves having to demonstrate in a court that they had done everything they could to take cyber risk seriously, to protect their company and therefore their customers’ data.

 

Viruses and hacking are perceived as the biggest cyber threat

 

Self-interrogation

 

Directors should be able to demonstrate suitable prevention and management of data breaches and ensure they are covered for all aspects of a cyber-event.

 

Interrogate your coverage

 

Good directors and officers insurance is essential. But to be effective, directors really need to interrogate and understand the product that they are buying. Key points to clarify are:

 

  • Exactly what is covered by your insurance and what is excluded from cover? Where are there gaps, and how can they be breached? Is this appropriate?
  • Are the policy limits appropriate for your risk profile and does the product specifically cover – or exclude – data breaches?
  • What kind of event would trigger cover and what are the reporting protocols? What needs to be reported? And to whom and how?
  • Does your policy cover derivative shareholder actions? Who controls the directors’ defence in the event of a claim?
  • In the event of a regulatory investigation, how broad is the cover?
  • How are payments prioritised?
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Important changes to Employment Practices Liability Insurance Claims

     

Legislation requires submission in the Advisory Conciliation & Arbitration Service (ACAS) in employment disputes.

 

It is now compulsory for individuals to contact ACAS before submitting a claim in the Employment Tribunal.

 

This is the start of the Early Conciliation Process the aim of which is to help the parties resolve the dispute and avoid an Employment Tribunal.

 

It is important for our clients to know about the process and comply with the notification terms in their policy. If you require further information on this subject please do not hesitate to contact us.

 

 

Goodbye Tax Disc 

 

From 1 October 2014, the paper tax disc will no longer need to be displayed in the vehicle windscreen and will no longer be issued from this date.

 

The vehicle will still need to be taxed to drive or keep it on the road and the DVLA will still send renewal reminders when vehicle taxes are due to expire. This applies to all types of vehicles including those that are exempt from payment of vehicle tax.

 

This also affects the buying and selling of a vehicle after 1 October 2014. The tax will no longer be transferred with the vehicle and the new owner will need to get new tax before the vehicle can be used. The seller will automatically get a refund for any full calendar months left on the vehicle tax after the DVLA is notified of the sale.

 

Tax can still be bought in the usual ways; online, by phone or at a Post Office® branch and the option to pay by direct debit will also be introduced. We hope you found this information useful but if you’d like to know more about the upcoming changes visit www.gov.uk/government/news/vehicle-tax-changes

 

CCI offers start-up companies essential help - 

 

The right insurance covers are essential for any business but especially so in the case of new start-ups. At a time when you are likely to be most busy; setting up and running your business, arranging insurance covers may have slipped to the back of your priority list.

 

Protecting your business from potential risk is essential to its success.

 

So…. have you considered what will happen if you are not adequately insured and an incident occurs at your premises, damaging your ability to trade and therefore reducing your income?

 

Have you arranged certain covers that are required by law, such as Employers’ Liability Insurance?

 

Let CCI Broking Ltd take the worry away, with a FREE review of your insurance requirements and existing arrangements. We are based in London and pride ourselves on providing a personal and professional service. We can arrange bespoke insurance packages, tailored to meet the requirements of your business, at competitive prices.

 

If you'd like to find out more about how we can help you with your insurance requirements please contact a member of our team.

 

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CCI strives to support the Fashion Industry

 

With our extensive knowledge and understanding of fashion industry activities we are able to provide expert advice and arrange insurance solutions to meet your specific needs.

 

Whether you are involved in design, manufacture, supply, wholesale or retail, we are able to not only evaluate your activities, but provide cost efficient insurance products that best suit your requirements.

 

Our ability to provide small independent through to global brand companies with insurance solutions, professional knowledge and personal service has enabled us to form long standing business relationships with our clients.

 

Let CCI Broking Ltd showcase its skills, with a FREE review of your existing arrangements and future insurance needs.

 

Being based in the West End of London, one of many hubs in the fashion industry, we are able to support local businesses and access the leading insurance markets in the City of London.

 

If you'd like to find out more about how we can help you with your insurance requirements please contact a member of our team.

 

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RSS Feeds

     

Please click on the following links for news items -

     

 

Drapers Online - "Fashion" News

 

www.drapersonline.com

 

 

Fashion Enter Fashion Capital - "Supporting the fashion industry"

 

www.fashion-enter.com & www.fashioncapital.co.uk

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