It’s often said the devil is in the detail in insurance policy terms and conditions – and that certainly seems to be the case as providers are rejecting business insurance terms and conditions to back their decisions.
More and more providers are including get out conditions in their policies, which means business managers must read their policies at every renewal to check for changes that might exclude a claim which was previously allowed.
Most of the conditions relate to standard health and safety issues, so businesses should keep up with new rulings and follow the guidance to the letter.
The Association of British Insurers, the umbrella trade body for the majority of business insurance companies says providers have identified they are continually paying out claims for accidents and fires at business premises.
The wording and conditions vary between providers, so once a short-list of insurers has been drawn up, businesses are advised to get a copy of the policy terms and conditions before buying or renewal and to carry out risk assessments and making sure any issues arising comply with the latest rules.
The clause to look for will say something like: “You may lose your right to indemnity or payment for a claim if any fire, accident or explosion arises because you have failed to comply with the following conditions…”
Then policy specific conditions will be listed.
Not reading the terms and conditions is no excuse as far as the insurer is concerned – they will argue the contract gave fair warning and that if you failed to read the conditions or ignored them, then the claim will be rejected.
That could then leave a business open to a costly claim for compensation and legal costs that cannot be met from insurance.
Some terms are impossible for some business to meet – for instance, one insurer demands waste is kept in a secured area at least 30 feet from any building. Many business premises will not have the space on site to comply and could find their policy is void in the event of a rubbish fire.
For businesses that cannot comply with policy terms or conditions, either try to negotiate a change in the policy or look for another provider with more relaxed terms.
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