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Top 5 Contractors Insurance Myths

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Having watched MYTH BUSTERS on TV we thought we’d have a go at busting some myths on Contractors Insurance

So here is our    TOP 5 MYTH BUSTERS

  1. CONTRACTORS HAVE TO BUY EMPLOYERS LIABILITY

Although Employers Liability is a compulsory insurance it doesn’t have to be bought by all businesses. If your clients are Sole Traders or a Partnership without employees then EL is not required. Where they run a family business without employees outside of their direct family then here again the cover is not required. Even if your client runs a limited company then cover is only required if there are employees rather than just Directors.

  1. MINIMUM PREMIUMS ARE OVER £3K

Many brokers think that High Hazard Contractors Insurance is very expensive however at IIGL we have a number of exclusive schemes which can arrange liability insurance from just £400.

  1. IT’S CHEAPER TO SELL 80% MINIMUM DEPOSIT

Rather than charge the market standard of 100% minimum deposit some insurers are starting to offer 80% MD which makes their insurance look cheaper. However, in reality this is not a cheaper option for the client because all they are doing is just delaying paying 20% of their insurance premium for a further twelve months. Brokers need to be very careful how they explain to the client how this works. The collection of the balance of the Minimum Deposit is triggered in two circumstance (1) If a claim occurs – so not only will the client have to pay the excess but also the balance in premium or (2) at the renewal of the policy where they will have to pay the 20% balance, potentially and additional premium for any additional turnover declared as well as the next years premium. Good luck explaining all this to a client without getting into an argument when they get their inflated bill.

  1. CONTRACTORS DON’T NEED RATED INSURERS

Although contractors predominantly insure just third party risks either to cover injury to their employees or damage to third parties; some clients think that it doesn’t matter who insurers them because if the insurer doesn’t pay it’s not their problem. By selecting a ‘non-rated’ insurer who might fail unfortunately still doesn’t stop the claim occurring or the damaged party pursuing the insured directly for their damages. The claimant is quite within the rights to pursue the insured for their loss and if the insurer fails then they are still able to bankrupt the insured to recover their monies. Unrated markets are also not usually accepted in large building sites as main contractors who have an obligation to check sub-contractors insurances often require a minimum of an A rated insurer. How does a broker explain to their client that the cover they have bought is not adequate and they have to cancel this (often without refund) and pay again for their insurance?

  1. NVQ CERTIFIED COURSES NEED TO BE CLASS ROOM BASED

Training employees can be expensive especially to a small business as not only do they have to pay for the course but also lose the employee at college for during the training course. By using our Online e-Learning your clients will have a cost effective solution to their health and safety training needs, especially suited to those businesses that are on a tight budget, employ a disparate work force or just one that struggles to get employees in one room together for classroom based learning.  The e-learning platform allows all your clients employees’ access, irrespective of number, to our web based training centre.  All our courses have been accredited by RoSPA (Royal Society for the Prevention of Accidents), CPD Standards Office and NVQ (National Vocational Qualifications, meaning our modules don’t just tick a box!

Here at IIGL we have a Team with over 200 years insurance expertise and we are looking to work closely with you to help Bust the Myths to ensure that your clients are properly protected and so are you.