Insurers are failing to meet 21-day renewal deadlines for EL and PL

Brokers have accused insurers of failing to adhere to a new service standard that recommends they provide 21 days notice of renewal terms for employers' liability (EL) and public liability (PL) risks.

The joint ABI–Biba statement of good practice came into effect for all EL and PL renewals after 1 November 2003. It was formulated after the Department for Work and Pensions' first report into the EL market found that a lack of time for businesses to shop around for EL insurance was putting additional pressure on the market.

But five months later, and with the 1 April EL renewal period past, one commercial lines broker said the service standard had been "completely ignored". "It's an absolute joke," the broker said.

A specialist construction broker, who declined to be named, described adherence to the service standard as "hit and miss". But he said that the ability of insurers to provide renewal terms 21 days in advance was dependent on brokers providing information about the risk to them.

The statement of good practice says that brokers should provide the "required information to the insurer not less than 30 calendar days prior to renewal".

The broker said in order to meet the deadline, "one or two" insurers had offered preliminary renewal terms based on the previous year's risk information. "They have said, 'presuming there are no changes, this is what we will offer'," he said.

In order to ensure the flow of information, the broker in question said he was now beginning renewal discussions with clients three months prior to renewal, rather than one month.

Biba chief executive Eric Galbraith said that it took the cooperation of both parties to ensure that the standard could be met. He said the question of whether prescriptive arrangements for the timing of renewal terms for other classes were required was something for the market to consider further. "That's a market issue which needs to be considered moving forward," he said. "It's on my agenda to ask the question of the market."

An ABI spokesman said it was not aware that the standard was not being adhered to. "I'd be surprised if there was any variance from it as there was an industry-wide commitment," he said. "If we want to see government movement and central reform we, as an industry, have to play our part."