30 June 2015 Insurance

More tailored BI policies required: MDD

More tailored business interruption policies are required, along with a greater understanding of the types of risks and the important issues surrounding it.

This is one of the findings of the eleventh MDD business interruption panel, which gathered 200 industry practitioners on June 24, 2015, to discuss some of the most important topics currently being raised in the industry. MDD is a forensic accounting firm.

According to the panel, the overall view was that there is a need for more tailored business interruption policies, as a typical broker doesn’t have the knowledge or skills to fully explain the products to their clients.

Paul Isaac, senior manager at MDD, said: “Business interruption policies are not tailor made, and many times a lack of understanding about how the policy works or about the businesses risk leads to disagreements about the recoverable loss. A common technical understanding of an issue is essential before any resolution can be sought.”

He added that The Insurance Act 2015 contains a number of initiatives, including the concept of fair presentation of risk to the market.

“This represents an ideal opportunity for the underwriting community to work with brokers to understand the unique nature of each business risk and identify what types of losses may arise during a claim, before a claim arises,” said Isaac.

“Ideally, this should create a better level of common technical understanding of what the risk is and, should an insured loss occur, what concepts and issues will be important.

“We can only hope that this important approach to common knowledge will be taken seriously from the outset.”

The panel focussed on four main areas, with presentations from eight different market representatives.

This included the topics of: delayed start up, presented by Dean Rebello of Swiss Re Services and David Heath of Integra Technical Services; increased cost of working, presented by Ben McKenna of FM Insurance and Neil Greaves of Marsh Risk Consulting; average daily value of loss deductibles, presented by James Deacon of DAC Beachcroft and Paul Bates of Lloyd Warwick International; and gross profit versus gross revenue, presented John Startin of Clausen Miller and Adrian Brennan of Echelon Claims Consultants.

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