The trade body collated top broker concerns surrounding the Covid-19 pandemic, such as unoccupied property clauses, renewal extensions and insurer risk recommendations

Brokers’ trade association Biba has rounded up the main concerns and questions from the broking community surrounding the ongoing Covid-19 pandemic, identifying 19 key areas on brokers’ agendas – this includes automatically extending renewal dates, the insurance impacts of home working and non-disclosure issues.

Speaking exclusively to Insurance Times this week, Biba’s executive director Graeme Trudgill said the trade body had noted specific themes among the questions it was receiving from its broker members pertaining to insurance issues arising from the coronavirus outbreak.

This led to Biba creating a 19-point document, outlining prominent broker concerns and what the trade body has done to address them.

Some of the main questions from brokers included:

  • The automatic extension of renewal dates.
  • Home insurance notifications for home working.
  • Insolvency of firms due to the Covid-19 pandemic and associated measures.
  • Government support for brokers.
  • Travel insurance extensions.
  • Non-disclosure issues due to changed business environment.
  • Risk recommendation implementation.
  • Unoccupied property clauses being actioned.
  • Minimum deposit premiums in light of requests for consumer refunds.
  • Business interruption claims.

Trudgill said: “As a trade body, we’ve had some really helpful, positive results for members that can really help them, whether that’s financially or with their clients and getting insurers to agree some helpful things for the clients.

“Although I appreciate the industry reputation in the wider press is going through a challenging period, there’s a lot of things that we’ve all pulled together on and Biba’s led a lot of this work to make life more bearable for clients and our members in general. And that work still continues.”

Policy documentation

A key concern for brokers, Biba found, centred around the renewal process and the potential automatic extension of renewal dates.

“Lots of SMEs can’t get to their premises right now, the broker can’t meet them there, check out if risks, recommendations have been made, so it’s really hard to do the renewal process and with everyone so busy and everything so difficult, we wanted to make sure that clients would remain on cover, there would be no gaps,” Trudgill explained.

Biba liaised with insurers and the government on this in order to gain flexibility for brokers.

Trudgill said: “The insurers have come back with a lot of flexibility. What they’ve said is they’re transferring resource from front-line new business to the renewals team. They try sending renewals out in good time, earlier than they would normally do, perhaps eight weeks before and if a broker does ask for an extra month or two months, then they are usually able to do that, to give everyone time to cater for it. Now it’s been two months, everyone’s hopefully in a good place and we’re not having to see so many extensions now, so that’s really good.”

Furthermore, Biba has worked with various sectors of the insurance industry to lengthen travel insurance extensions from 30 days to 60 days in order to help Brits who may be stuck abroad, and gained insurer leniency on the implementation of risk recommendations, such as sprinkler systems, which should only be carried out in important or urgent situations.

Insurers have also committed to leniency to mitigate non-disclosure issues. This could include, for example, where a business is storing more stock than usual due to the national lockdown, yet they did not immediately inform their insurer or broker.

With the majority of individuals still working from home, Trudgill noted that this had impacted home insurance.

He said: “Your home insurance would normally require a notification. Not every insurer would treat [working from home] as a standard risk; some might want additional premium, some might not want to cover working from home, so we spoke to the ABI and a number of insurers.

“There was some nervousness about it because obviously there is increased risks from working from home. We were able to get a pledge from the ABI that they wouldn’t penalise anyone working from home.”

Imposing unoccupied property clauses was another issue Biba took to insurers on behalf of members – Trudgill explained that some clauses require an inspection of the property every seven days, for example, “but how can you do that when you’re told to stay at home or be fined by the police?”

Here, Trudgill said that Zurich came up trumps. Difficult one for insurers but Zurich came out early on and said ‘we’ll absolutely not impose those unoccupied clauses’. They were really happy to cooperate and the rest of the market followed suit,” he added.

Supporting brokers

Biba is additionally looking at measures to help safeguard the business operations of brokers – this saw the trade body lobby government so that small to medium-sized brokers could access £10,000 of grant funding, subject to eligibility criteria, designed to aid SMEs during the pandemic.

Biba further sought clarification on the government’s Bounce Back Loan Scheme (BBLS), which enables smaller businesses to access finance more quickly during the coronavirus outbreak. Although insurers and reinsurers are excluded from the initiative, Biba confirmed that brokers can access this support, meaning that firms can apply for a loan between £2,000 and £50,000.

Trudgill continued that the insolvency risk for brokers is also a concern.

He explained: “We’re working on an issue around insolvency. If you’re a really well-run business, you’ve never had any financial problems but your government orders you to shut down and the loans and grants aren’t sufficient for you, then obviously you are at great risk of going insolvent and you may do so.

“What we’re doing is we’re asking the Treasury and the credit reference agencies and insurers to look at these closures in a different light. So anyone that has been forced to close but [is] really a well-run business, is there a way of the credit reference agencies noting that, that they were only a failure because of Covid-19 shutdown and actually the last five years, they’ve had a great balance sheet and profits, and therefore when it comes to insurance, we don’t treat them as harshly as we currently treat firms who have gone through insolvency.

“It’s just about taking that sympathetic approach and I think everyone is open to that idea, it’s just a difficult one to navigate because everyone relies so much on big data from credit reference agencies, so we need them to a degree to help with that.”