BI SIG Conference Sessions
Business Interruption adjusters have been urged to contribute to a review of longstanding BI policy wordings to ensure these remain relevant to businesses today.
Members of the BI SIG were invited to contribute by Damian Glynn, who explained: “The depreciation debate has been ongoing for years; some people say it’s a saving, some say it’s not. It may be time for the wording to be updated to remove the issue. Then we will all know where we stand.
“Interestingly,” continued Damian, “there appears to be an appetite from insurers for a review of the wording generally, rather than reviewing the depreciation savings issue in isolation. The feeling was if you are going to change the wording, why stop at this part alone? So there may be an opportunity to dust off a wording that was written in the last century.”
The BI SIG has provisionally booked a venue in London for a meeting in February 2009 to explore the issue with brokers and insurers and Damian urged members to get involved.
He continued with a light hearted look at this year’s approach to the SIG’s presentations at conference: “At last year’s conference we talked about technical guidance that had already been issued, so this year we thought we’d give things an exciting revolutionary twist and talk about things before we issued the notes.”
PREMISES
The remainder of Damian’s presentation focused on the two Ps – Premises and Purchases. The issue of premises was partly dealt with in last year’s note on flooding, he explained, adding “If you were in Meadowhall what’s the Premises? Is it just your unit or is it the whole of Meadowhall?”
Through a range of examples and anecdotes involving a variety of claims, Damian revealed the dizzying variety of interpretations BI adjusters can face in dealing with Premises issues. “There really isn’t a right answer, it’s just something that seems to crop up often and is worth attempting to clarify ‘what do we mean by the Premises?’ Certainly Meadowhall flushed it out by asking ‘Is a location on the Premises or in the vicinity of the Premises? Does it include the demised area or is it going to include the car park?’.”
PURCHASES
The debate on purchases drew in comments from the floor as members discussed with Damian how various theories on what should or shouldn’t be considered a purchase could be factored into BI loss calculations. “Riley talks about raw materials and other incidentals associated therewith,” said Damian, “But we are inferring a technical definition; the dictionary says ‘anything bought’ so for that definition it could be an electricity bill. But Riley says, ‘unless you can grab it, it’s not purchases’. Of course, the insured will say, ‘who’s Riley?’ Where is he mentioned in the policy wording?”
The general feeling from the floor was that businesses uninsured too many costs in defining gross profit. It was even suggested that the debate should be focused on US style wordings rather than the type of cost that should or should not be Uninsured.
Which all goes to confirm that there is an enthusiasm to contribute to a wording review and a healthy range of viewpoints available to boot.
Ralph Savage
Read feedback from the BI SIG Conference sessions