UK-based businesses fear the impact of a disorderly Brexit
A fifth (22%) of senior executives and managers employed at British firms believe there is a strong chance their organisation will make a business interruption insurance claim in the next 12 months due to potential damages and losses caused by a disorderly Brexit.
The research, commissioned by commercial insurance placement and dispute business Mactavish, polled 937 senior executives and managers in October.
It found that many business interruption claims could be rejected because organisations have not informed their insurer of specific Brexit-related risks – this is required by law. Around 18% of respondents who believe their organisation is at risk from Brexit stated that their employer has not undertaken this process, compared to 25% who have informed their insurer of this potential new threat.
Mactavish added that individual directors could also come under fire and face legal action for not informing insurers of Brexit risks because of limitations applied to directors and officers (D&O) insurance cover.
Brexit ripple effect
The research further found that 26% of respondents feel their organisation will be affected by Brexit, but they have not prepared for it.
Risk factors identified in the research include being able to source suppliers (35%), staff shortages (31%), being able to access new sources of finance when the business is so focused on Europe (24%) and selling in Europe (23%).
Bruce Hepburn, chief executive at Mactavish, said: “Our findings show that many businesses are facing significant risks from a disorderly Brexit, and that many have not prepared for this properly or adequately informed their insurers of these.
“All of this creates several insurance-related challenges and it can be difficult to know what they are covered for. Organisations need to review their existing cover to ensure it is adequate.”
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