Guide urges risk managers to bring forward renewal process
A comprehensive insurance efficacy guide to help risk managers purchase the best possible cover for their organisations was launched today by Airmic.
The document aims to help buyers work successfully within the UK legal system, which the association believes to be weighted against commercial policyholders.
The guide says it is essential to ensure that terms and conditions are agreed fully and in writing before policies come into force, and that the wordings are understood and well tested in advance. In many cases this will mean bringing forward the renewal process to allow more time.
Over the past five years Airmic has produced a series of guides, protocols and model clauses that highlight pitfalls in the insurance-buying process and recommend ways to avoid them. The new guide brings these topics and other aspects of the commercial insurance process into a single document, together with more general advice on how to ensure that claims are paid as expected. It includes advice on process and timing, and checklists on what needs to be done.
“Airmic’s insurance efficacy guide has been a huge undertaking. It distils decades of experience accumulated by senior risk managers,” said Airmic chair Chris McGloin, who also heads the association’s Insurance Steering Group. “A key message for any risk manager is to get things right at the start, and to leave nothing to chance.”
“Our members pay premiums totalling an estimated £8 billion annually, which translates into cover totalling hundreds of billions. For most companies insurance represents a big investment and their greatest single source of contingent capital. This guide will help risk managers obtain the most effective, best-value cover possible on behalf of their organisations,” said Airmic CEO John Hurrell.
The publication emphasises the importance of getting things right pre-inception, the three pillars of a robust policy being coverage, contract and claims certainty. It gives advice on matters such as disclosure, global compliance, basis clauses, warranties, reservation of rights, conditions precedent and how to test wordings before policies are signed.
“Purchasing a large insurance programme in the most capital-efficient manner is challenging and time-consuming and requires an awareness of what can go wrong,” said Airmic technical director and report author Paul Hopkin. “This guide, taken together with professional advice from a broker, will give the buyer much-needed support.”
The Insurance Efficacy guide is to be read in conjunction with the other documents produced by Airmic in recent years to assist insurance buying. In the coming year these will be incorporated into the guide to create a single seamless e-source of information.