An essential part of business ownership is ensuring that you and your employees are covered for all those kind of situations where things can get messy. Dealing with unexpected issues can amount to quite a challenge, so ensuring you and your staff are taken care of at every moment is fundamental to the security of your company. But how do you know which company provides the services you need? Based on what risks do you choose your insurance coverage? In an effort to answer these questions we spoke with Laurent Martin from ALLIA Insurance Brokers, Alain Voets from Concordia Insurances and Filip Declerq from Expat & Co.
'“Insurances are an important tool to limit the financial burden in the event of damage and to prevent your company from going bankrupt.” - Laurent Martin, ALLIA Insurance'
There are a number of types of insurance coverage that you are legally required to take out as a business, such as occupational accidents and general civil liability. Then there are the additional covers which will differ per organisation, and are dependent on risk. At the very least, you need a good general liability insurance to insure against all cases of non-contractual damage to third parties. How extensive it should be will depend on the type of business and the activity.
Spill water on a client’s laptop and it’s covered by your general liability insurance. If you’re serving snacks at an event and one of the suppliers has suffered from a salmonella outbreak, they’ll want to have product liability coverage. In addition to a good fire insurance, consequential loss insurance is also useful to compensate for turnover and loss of profit immediately after the fire or water damage.
For intellectual and liberal professions, contractual professional liability is often added. When there are employees, an occupational accident insurance policy is mandatory and every company car requires motor insurance. You can supplement this with comprehensive insurance and assistance.
GDPR and data processing agreements can hold large contractual liabilities, so what if you lose a client’s documents and accidentally disclose private data? Private liability insurance can mean the difference between bankruptcy and the survival of your business. After all, professional liability does not always require an error to have been made, simply failing a contractual obligation can be sufficient to trigger your contractual liability with a client.
Similarly, cyber crime is on the rise and a sudden attack by ransomware can see you held liable by your clients for not meeting your contractual obligations.
It can be interesting to insure the directors of the company under a directors’ liability insurance. An inexpensive insurance policy, it guarantees legal representation and assistance when the business owner (accidentally) causes damage to his business or a staff member. Under the new company law this is seen as not only a business accident but also falls under your personal liability because you are at fault. A business owner can, if he is not insured, lose everything. Not only is his business declared bankrupt, but his house can be taken too. We’ve seen it happen before.
Succinctly put: insurances are a form of precaution. They require you to take a closer look at all your possible risks so you can try to eliminate or reduce them. You transfer the residual risks to an insurance company in exchange for payment of a premium. The better your own precautions, the cheaper your insurance will be. So critically assess your risks and get advice from a specialist insurance broker.
“A good insurance package is not just an accumulation of policies. One policy must strengthen the other, not weaken it. Ask for guidance from an independent broker who can guide you through your risk assessments.” – Filip Declerq, Expat & Co
It’s hugely important that all the insurance policies included in a package are aligned. One policy must strengthen the other, not weaken it. Imagine your insurances for civil liability and legal assistance are under the same company. Now let’s suppose you have a civil liability car insurance with company A and company A is the market leader in Belgium. If you cause an accident, there is a good chance that the person involved is with the same insurance company. This creates a conflict of interest. Company A must represent both persons, without the control of a counter company. The tendency to compensate the customer with the smallest damage could be high.
If you’re the party who has suffered the greatest damage and are convinced that you are in your right, you can lodge an objection by appealing through legal aid. But, if that legal assistance is with Company A again, you have a problem. The legal assistance at A thus weakens the civil liability guarantee. It’s therefore best to take out legal assistance insurance with an independent legal assistance company. Of course, the disadvantage here is the cost. Separate legal assistance costs much more, but you are guaranteed that your files will always be handled correctly.
An example of reinforcement would be if your consequential loss insurance is with the same company as your fire insurance. Suppose a fire starts in your office, requiring you to close it for a longer period of time and on top of that a discussion has arisen with the damage expert. If you place the business damage insurance policy with the same company, the expertise becomes more urgent to the covering insurer. The longer the expert discusses details, the longer your company will suffer consequential damage. As a result, the insurance company will have to pay more for the loss of profit and the rental of replacement offices. It is therefore in the insurer’s own interest to reimburse you as quickly and effectively as possible.
“Focus on risk management and apply prevention measures.” – Alain Voets, Concordia Insurances
Of course, there is no insurance to help reduce insurance claims. A company can take measures, such as working with a prevention advisor, to reduce and manage the risk of, for example, accidents in the workplace. With less accidents, you suffer less damages and less damages helps lower your premium. Companies that work with machines, for example, receive additional conditions imposed by insurers in order to limit certain risks. After a year, these are revised and adjusted if necessary to ensure that the premium doesn’t need to be increased. You might also offer employees an incentive if there are less accidents than the previous year; this makes staff more alert for accidents.
“On the one hand there is the element of chance, but on the other there are risks that you can assess and limit. If you’re organising an event or managing a project from A to Z, there are a myriad of things that can go wrong, before, during and after the event. ” – Alain Voets, Concordia
The number of things that can go wrong at any time are endless, but when we find ourselves needing to claim, we’re often quick to blame the insurer when we don’t receive the compensation (we think) we deserve. However, it’s important to note that this isn’t always due to the insurance company, but may also be attributed to the customer or the broker.
When things do go wrong with the insurer this is often to do with conflicts of interest, where the insurance company decides to pay out the lesser of two claims as previously discussed. A form of abuse of power then plays a role. The insurance company has an entire army of good lawyers at its fingertips, which the client usually doesn’t.
“Some customers try to cheat the insurer by not disclosing all the facts, but they usually end up deceiving themselves.” – Filip Declerq, Expat & Co
Things can go wrong from the customer’s side when they are careless or don’t receive specialist guidance by their broker. It’s easy to forget something, and accidents are quick to happen. If something happens, and you are not, or not sufficiently insured, you pay for the costs yourself. You cannot blame your insurer for your carelessness, negligence or oblivion, irregular control or follow-up.
Incomplete transparency can be contributed to the customer. Some customers try to cheat the insurance company by not disclosing all the facts. But they usually end up deceiving themselves, because insurers leave little to chance. The same applies for brokers. They too sometimes forget something. Nothing human is alien to them. But they do have professional liability insurance for this. If damage is caused by their fault or negligence, the client will be reimbursed under their professional liability insurance.
“The onus is on clients to inform us of changes. If you’ve bought a new car, you need to let us know so we can insure it. Companies evolve and communication between the insurer and insuree is hugely important.” Laurent Martin, ALLIA Insurance
SOME USEFUL TIPS TO ENSURE A SUCCESSFUL CLAIM RESOLUTION
∞ Submit your claims in time
Many contracts have a limited time span after the accident or incident to submit your claim. If that time is up, the insurance company does not have to reimburse you.
∞ Be honest, correct and complete
Make sure your first version of the facts is always the correct version. People who change their version afterwards, when they feel things aren’t turning out the way they want, are always considered suspicious. Companies have the right to call in detectives to find out the truth. A well-known trick is to visit the neighbors: they’ll often share more than the customer would like. Anyone caught for fraud, concealment or misrepresentation of the facts can be sentenced and loses all entitlement to compensation.
∞ Ensure order in your own file
If you make a mess of your file, you can’t expect your insurance company to process it within the agreed time. Claims Adjustors are not your personal secretary. Also, don’t forget that you’re not the only customer. If we were to give priority to messy, and therefore time-consuming, files, we would build up more backlog. As a result, we would also have more dissatisfied customers. Priority is given to as many satisfied customers as possible and therefore to orderly files.
COMPLETING YOUR FILE CORRECTLY:
∞ complete in one file per insured person (not all insured persons mixed together), possibly clearly grouped into one large file;
∞ make sure your documents are arranged by date;
∞ avoid mixing invoices or supporting documents from previous files with new ones;
∞ report your form filled in as completely as possible: describe the cause of the accident, the diagnosis of the disease and such as accurately as possible, supplemented by witness statements, medical reports or other evidence;
∞ don’t forget to mention the account number on which the reimbursement can be deposited.