BI specialist mulls using own capacity to set up insurer
Business interruption specialist Corporate Claims International (CCI) is developing a commercial after-the-event (ATE) insurance policy for multi-million pound claims.
CCI director Malcolm Stewart said the insurance market did not have the capacity to provide sufficient cover for businesses in large claims.
"There are not enough insurers in the ATE market to provide the necessary capacity - their focus is on large volume personal ATE. And where cover is available, it is insufficient for businesses which may need limits of many millions of pounds."
He said the situation was not helped by the fact that commercial litigation lawyers are "not as attuned to conditional fee arrangements as personal injury lawyers".
Stewart said that CCI was considering putting its own capacity into the market and that it might set up an insurer to underwrite the policies.
"The access to justice isn't there are the moment. There are lots of instances where the claimant has suffered loss, but is not in a position to pursue it through lack of funding."
One example where businesses would struggle to find capacity would be in funding business interruption (BI) claims arising from oil spills. CCI is currently involved in the dealing with claims arising from the spillage of 5,000 tons of fuel off the coast of Spain last year from the Prestige. The total cost of the claims is approximately ¤1bn.
Stewart said the "vast majority" of businesses - as many as 80% - are underinsured for BI. "They have the wrong policy, the wrong indemnity period and don't understand its importance."
There will be separate roadshows for brokers and businesses, addressing how brokers can improve the service they offer to clients. "We have conducted research on how brokers handle claims," said Stewart. "They don't focus on claims service as an added value."
Further details will be announced in the autumn.