Insurers warned against risk of being sued over 'bad Brexit'
There's a high risk of insurance company directors being sued by investors and other stakeholders over poor preparations for a bad Brexit, new research has revealed.
According to Premium Credit's latest report, nearly 38 percent insurance professionals believe that a bad Brexit will lead to more businesses making insurance claims due to a higher level of business interruption risks. Meanwhile, some 15 percent think there will be a significant increase in businesses because of this.
Insurance professionals are said to be most concerned about directors & officers cover (38 percent), followed by business interruption risks/insurance claims (31 percent).
Meanwhile, only 21 percent of respondents believe companies have done a good job in keeping their insurers up to date in terms of informing them of the specific risks a bad Brexit poses to their operations. Almost half (42 percent) believe this means there is a risk of commercial insurance claims linked to Brexit being rejected.
Adam Morghem, strategy and marketing director at Premium Credit, said: “Our findings are alarming but there is still time for many businesses to ensure they have appropriate plans in place for a bad Brexit and that they have provided their insurers with the relevant information to ensure that they have sufficient cover here."
Morghem added: “We are already seeing many companies reconsidering their cash flow and are choosing to pay for their insurance over instalments through for example premium finance, as opposed to paying in one go.
“If companies suffer from a bad Brexit and their insurance doesn’t pay out, or only partially meets their claim, companies will face further cash flow issues and be more reliant on our services.”
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