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| Services | Due Diligence Reports |
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In today’s high regulatory compliance regime, it is important for company executives to fully review their risk exposures.
It is not uncommon for insurance programs to become “stale” if not independently reviewed on a regular basis. We have seen many instances in the past where businesses have grown and the insurance program has not grown with the business.
Risk retention may occur in many ways, for example:
- By under-insurance (eg, if your sums insured are inadequate, and Co-Insurance provisions are applied, you are treated as part-insurer of all such losses).
- By inadequate loss limits (eg, if your Public Liability limit is insufficient, you are your own Insurer for the excess, plus a proportionate share of any legal fees).
- By non-insurance (eg, if you elect not to insure a risk like “Motor Vehicle - Own Damage” you must stand all such losses yourselves).
- A self-assumed or imposed Deductible or Excess under a policy.
Our concern lies not so much in the fact that you may retain certain risks, but that you may do so without fully recognising the fact and making a deliberate policy decision to do so. Such decisions should be reviewed from time to time in the light of changing circumstances. A potential problem area could arise from a series of losses, each subject to a heavy deductible.
A further concern is the possibility of the aggregation of self-insured risks which, in the event of an incident giving rise to a variety of claims, could lead to a combined loss figure well above the acceptable level of retention (eg, a fire or explosion at a major location could involve Fire, Business Interruption, Motor Vehicle and also Cargo on vehicles parked, not to mention Legal Liability for injured workers or third parties).
Are you considering purchasing a going concern business? You have probably done or a considering conducting financial due diligence on your prospective purchase, however have you conducted an insurance due diligence to ensure that current owners have adequate insurance in place and that you won’t be faced with any potential liabilities in the future?
Our experienced staff can conduct a thorough review of your existing insurance arrangements and provide a written report for your consideration and attention.
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