Insurance in Times of Adversity
In light of the much publicised Credit Crunch being upon us managements of businesses may be tempted to cut their insurance costs to the bone by dispensing with cover.
There are reasons why this should not be done. Non-shareholder managers may find themselves the subject of an action by shareholders if a loss were to occur and the insurance arrangements found to be inadequate.
Further, when trading is reduced the company will have less ability to recover speedily from a loss than when the trading has been good. There is therefore ironically a greater need of insurance in times of economic difficulty.
Disaster Recovery or Business Continuity Plans should be reviewed and if none in place as a matter of urgency consideration should given to effecting same.
Any temptation to reduce sums insured, indemnity periods etc. should be resisted in favour of the marketing of a proper portfolio of cover.
Donald Laing, Clark Thomson Insurance Brokers Ltd
Tel : 01382 646454
