In our latest ‘Difficult. Done Well’ case study, we take a look at how Jason Cohen, Executive Director at Hamilton Leigh, helped the CEO of a big technology business carry out a full insurance health check of their business, which led to them enhancing cover without any additional cost to the client.

Background & challenge

Jason was introduced to the CEO of the large technology consultancy business by Matt Grimsdale, who was their consulting CFO. Matt explained that the client was keen to have an insurance review due to the lack of interaction they had from their incumbent insurance broker.

In order to carry out a comprehensive review of the client’s current insurance programme, Matt provided Jason and his team an insight into the background of the company, their operations and the types of clients they work with. Matt also provided Jason with all of the client’s current insurance documentation so that he and his team could review. After carrying out a thorough review, Hamilton Leigh arranged a meeting in London with the client to go through their findings.

Solution

With the client being a tech focussed business, two core fundamental covers they had were Cyber insurance and Professional Indemnity.

When carrying out their review, Jason and his team were able to ascertain that the Cyber insurance limit was unusually low, considering they are an organisation that would rely heavily on their network infrastructure to trade efficiently. Further to this, their Professional Indemnity, whilst in place, had a gap in coverage, specifically in relation to ‘Breach of Contract’ cover, which is a vital aspect of insurance for technology businesses.

During their meeting in London, Jason asked the CEO:

• What did their current relationship with their existing insurance broker look like?
• How did their current renewal process work?
• What was their understanding of the insurance marketplace for their risks?
• How often did their incumbent broker catch up with them on a regular basis to understand what was going on in the business and if their insurance provision needed to be adapted?

The CEO told Jason that they had never met their broker.

Outcome

Following their discussion around the client’s coverage and the service proposition that Hamilton Leigh provides, the client concluded that he would like to work with Hamilton Leigh.

Upon appointment, Jason and his team were able to include and enhance cover without affecting the cost to the client. Subsequently, this business went on to sell and cited that having the correct insurances in place, alongside a responsive insurance partner like Hamilton Leigh, supported their due diligence process with the acquirer enormously.

“From the outset, Jason and the Hamilton Leigh team demonstrated a deep understanding of the various insurance products available and took the time to explain the nuances of each option. Their professionalism and attention to detail made the complex process of selecting the right coverage straightforward and stress-free, especially at a time where the business was experiencing significant change.

What truly sets Jason and Hamilton Leigh apart is their dedication to client engagement and empathy. They are always responsive and willing to go the extra mile to ensure that we have the best possible coverage at the most competitive rates.

Thanks to Jason’s guidance, we feel confident and secure in our insurance choices. His expertise has not only helped us protect our assets but also provided us with peace of mind, knowing we are well-covered.

I would highly recommend Jason and Hamilton Leigh to anyone seeking knowledgeable, reliable, and trustworthy insurance brokerage services. Their commitment to excellence and client-centric approach makes them a standout professional in their field.”

CEO of Tech Consultancy Client

Here to help

To find out more about how we could help support the insurance needs of your technology business, take a look at our dedicated page here and contact us on 0208 236 5350 or email JasonCohen@hamiltonleigh.com

Research undertaken by RebuildCostASSESSMENT.com has revealed that four in every five buildings they survey are underinsured by an average of 37%. It is a growing risk that is affecting buildings, machinery, plant, and other contents which concerns private individuals and businesses of all types and sizes.

If you have not had a professional insurance valuation in the past five years, it is highly likely that your property will be underinsured. You could face serious consequences if you have to make a claim and it is discovered that you do not have the correct level of cover in place. If this was the case, your policy will not operate as intended, delivering less indemnity than needed following a loss.

To help you understand the risks of underinsurance, our sister company, Specialist Risk Insurance Solutions, have published a guide that:

• Explains why we are seeing more underinsurance
• Outlines the implications of underinsurance
• Discusses the actions you should take to prevent underinsurance
• Offers guidance on things to consider when choosing your valuation assessor

Download the guide:

If you would like to discuss this in more detail with a member of our specialist team, please get in touch for an introduction to one of our Commercial insurance experts.

The risk of underinsurance is often overlooked due to cost-saving, however, it is crucial to understand the significant consequences that underinsurance can have on your business.

Businesses operating in the automotive, technology, manufacturing and property sectors have complex insurance requirements and therefore, taking a proactive approach to underinsurance is vital.

To avoid underinsurance, businesses can take proactive steps to ensure that their insurance coverage adequately reflects their needs and potential risks.

Insuring your commercial property for an incorrect value, or setting your limits too low results in underinsurance, which can have serious and often devastating consequences for businesses.

Insuring your commercial property for an incorrect value or setting your limits too low results in underinsurance, which can have serious and often devastating consequences for businesses. Therefore, in the unfortunate event of a claim policies will not operate as intended, delivering less indemnity than needed following a loss. Ultimately, this could put a business’s ability to recover in jeopardy.

Following BT’s recent announcement of the withdrawal of their Redcare Alert security system, our latest blog discusses how to select a new security system.

Any business that relies on computer systems to store or transfer data is exposed to cyber risks. In today’s digital world, this is most businesses. With more businesses than ever investing in Cyber insurance, we have outlined five things to consider if your business has not purchased this type of cover

What are the main reasons for inflation in Liability claims?

Claims inflation continued to be a priority topic for insurers in the UK and worldwide. Increased litigation costs, increases in psychiatric injury claims, and expensive commercial care packages are creating challenges for insurers.

According to Lloyd’s of London, claims inflation refers to the change in the cost of claims of a like-for-like policy over a period¹. Claims inflation is the sum of ordinary economic inflation and excess inflation.

Excess claims inflation

Excess claims inflation is the increase in the cost of a claim beyond that of ordinary economic inflation, which is driven by many different types of inflationary factors such as:

• Advances in medical science and technology
• Increases in certain awards of damages
• New categories of claims
• Professional services spend, such as experts and legal costs
• The rising cost of energy
• The increasing cost of care

Social inflation

In addition to the above economic excess claims inflation factors, social inflation is a subset of excess claims inflation. It is referred to as social inflation because the increased costs are largely attributed to social trends or movements. The ‘social trends’ that are increasing the volume and costs of claims include:

• Third party litigation funding facilitating a larger group of potential claimants to bring proceedings
• Public sentiment driving an increased willingness/appetite to make a claim
• Increases in collective or group actions
• A civil justice jury award system leading to nuclear verdicts
• Shifts in the legal and regulatory environment
• The COVID-19 pandemic
• The cost-of-living crisis

The cost-of-living crisis, professional services spend, the cost of care, and new categories of claims are key inflationary factors driving up the volume and cost of personal injury claims. For example:

Psychiatric injury

The impact of COVID-19, greater use of social media, and the impacts of the cost-of-living crisis have been identified as some of the reasons for the increase. It is also speculated that awareness efforts have contributed to the rise in individuals seeking help for their mental health. In early 2023, the UK government announced £150 million of additional funding would be allocated to mental health services.

Employee mental health and wellbeing have also become a strategic business priority, which is now part of the ‘S’ of their ESG strategy. Simon White, ESG Director at MX Underwriting talks about what the ‘S’ means in ESG here.

Cost of care

Increasing care costs are a significant reason for claims inflation in England and Wales. This has impacted both claims for non-commercial care voluntarily provided by family and friends as well as commercial care required in more complex cases.

Commercial care costs for both directly employed and agency care have also been driven upwards by a shortage of carers and the rising cost of living. Brexit, the pandemic, and a lack of suitable candidates have helped drive these shortages at the very time when there is an increasing demand for care due to the aging population.

In addition, the care sector is suffering from high turnover rates and poor staff retention with other sectors offering better pay, more sociable hours, and better working conditions.

Advances in medical science and technology

Amputation claims have been subject to hyperinflation in recent years and there are several reasons for this trend. The costs of prosthetic devices continue to increase which can be partly attributed to continued technological developments designed to increase levels of function for amputees.

However, even without technological advancements in prosthetic devices, the market is typically seeing price increases of between 5% to 8% per annum for the same products caused by a combination of general economic pressures in the UK and limited competition in the industry.

New surgical techniques such as targeted muscle reinnervation (TMR) or osseointegration (where a titanium rod is implanted into the stump to which the prosthetic is attached rather than the conventional prosthetic socket) can also add an additional layer of costs.

The recent judgments of Swift v Carpenter [2020] and Riley v Salford Royal NHS Foundation Trust [2022]² have assisted claimants in their efforts to push the legal boundaries and are often cited by leading claimant firms in relation to accommodation, life expectancy and loss of earnings.

Finally, the catastrophic nature of injuries suffered by amputees means that there are often claims for inter-dependent losses of accommodation and care which have also been subject to inflation in recent years.

The cost-of-living crisis

Fraudulent claims typically rise during economic downturns. This flux and uncertainty compared with previous economic downturns causes delays in claim processes and increases costs.

The economic downturn has also seen a significant rise in opportunistic property claims in both residential and commercial lines. In commercial lines, arson and escape of water claims remain prevalent as COVID-19 bounce-back loans and general government support have been withdrawn

How we can help

Specialist Risk Insurance Solutions (SRIS) Claims Director, Justin Welham, comments:

“Whilst not as obvious as the property sector, claims inflation is also starting to have a real impact on casualty claims.

Rising inflation means that the Judicial College guidelines, used to assess general damages claims for pain, suffering and loss of amenity, are quickly out of date and claimant solicitors are looking for higher damages.

We are already starting to see a relatively sharp increase in the average value of general damages paid, which in turn will drive up renewal premiums. As part of our risk management offering, we actively engage with clients to ensure that the appropriate loss control measures are in place to prevent accidents occurring in the first place.

When accidents do happen, our award-winning claims team are on hand to walk the client through the process every step of the way.”

For more information on claims inflation and how this may impact you get in touch with our expert team.

What about Motor claims?

Find out more about what’s driving Motor claims inflation.

Sources:
1 https://assets.lloyds.com/media/8a9d0449-0d0d-41f4-bf76-7de7bc289293/Allowing%20for%20Claims%20Inflation%20in%20Reserving%20-%20Lloyd%27s%20Reserving%20Thematic%20Review%202022.pdf 
2 https://www.dacbeachcroft.com/es/gb/articles/2020/october/swift-v-carpenter-the-answer-to-accommodation-claims-or-just-a-halfway-house/#:~:text=Published%209%20octubre%202020&text=In%20summary%2C%20the%20Court%20allowed,discount%20rate%20of%20%2B5%25.&text=Roberts%20calculation%20(%2D0.75%25%20DR,%2D%C2%A3371%2C385%2C%20so%20NIL