Why should Insureds contract a risk survey?

As the saying goes “better safe than sorry”, yet all too frequently we have encountered, on the occasion of visits motivated by claims, companies whose layouts and risk prevention and safety measures left much to be desired.

In a tough insurance market such as the current one, it is important to invest in prevention and safety so as to facilitate the acceptance of the risks by the Insurance Companies.  Many of the measures that can be undertaken, such as improving cleanliness, sealing of electric cable ducts, thermal imaging of the electric switchboards, charging forklift batteries in an adequate place (either open air or well ventilated) … are cheap to do and require little investment.

In addition, it has been proven that most of the loss events that occur in industrial risks are caused by human factors, i.e., due to the negligence of their own workers or workmen from external companies engaged in maintenance or repair work.  Therefore, it is vital to ensure that the operations and maintenance manuals are complied with and likewise the protocols for the “hot work permits”, and that both your own as well as the subcontractor staff know and follow the prevention and safety manuals established for each risk.

There is no point whatsoever in having excellent prevention and safety rules, if then their rigorous compliance is not enforced or controlled.  Being strict on this point would substantially reduce the claims record of companies, and is a matter in which their boards of directors and works committees ought to be seriously involved.

The fact that some experts inspect the risks and issue reports recommending improvements in prevention and safety issues and point out any deficiencies and gaps found, we believe would reduce the accident rate of companies and facilitate the cover of their risks by Insurers.

At VANTEVO CLAIMS ADVISORS, we have experts in risk surveys and are in a position to assist Policyholders and Brokers to reduce their claims record and lower the cost of their insurance policies.

Underinsurance must be avoided through a prior valuation of the assets to be insured

Unless your policy is on a first risk basis or it has been agreed with Insurers to waive the Average Clause, we believe it is important to draw up a valuation of the tangible assets so as to avoid underinsurance at the time of a claim which would mean that the Insured only has a partial recovery of the amount of their loss and damage.

This is even more relevant in a year such as this year of 2021, in which after the pandemic that had seriously affected the economic activity of businesses in 2020, we are seeing substantial hikes in the costs of both raw materials as well as sea freight, something that will undoubtedly impact the prices of the products manufactured by many companies. The strong increase in demand and a decrease in supply is what is shaping this situation, and accordingly it is not expected that prices will stabilise before 2023, whilst this is dependent upon there being a drop in the rate of transmission and a rise in the level of vaccinations worldwide.

Thus, it is foreseeable that there will be a mismatch between the New Replacement Value of the insured assets and their value in the policy, and consequently the same must be examined urgently by experts so as to update the sums insured for both the Material Damage and the Consequential Loss insurance policies, since the expected inflation will cause a rise in the fixed costs, profits and turnover of the companies in the post-pandemic situation.

Subsequently, the sums insured should be updated every year, but this will be relatively easy to do based upon an analysis of the investments and disinvestments made over the preceding year of account and the price fluctuations on the basis of the Industrial Price Index (IPRI) published by the Spanish National Statistics Institute (INE).

VANTEVO CLAIMS ADVISORS is at the service of Insureds and Brokers to undertake these valuations and guarantee an adequate sum insured for both the Material Damage and Consequential Loss policies, thereby avoiding the application of any underinsurance in the claims.