Office Insurance

02/06/2011 in Office Insurance

Office insurance policies generally offer a high level of cover at a reasonable premium. Most office insurance packages will meet the needs of the majority of businesses by combining insurance for all the major contingencies, such as loss or damage to office contents and computers, public and employers’ liability and business interruption.

There are however a number of pitfalls that need to be avoided to ensure that the insurers provide settlement in the event of a claim.

Shared offices i.e. offices which are not self-contained cause some insurers a major problem and in our experience the majority of insurers are not prepared to offer cover. We tend to find that the limited number of insurers who do offer cover will restrict the insurance for theft to claims involving forcible violent entry or exit to the premises. Insurers do this as they are not prepared to provide cover for items that mysteriously disappear. It is therefore very important that you let your insurers know if you are office sharing.

It is also of the utmost importance that your insurers are aware of all the business activities. An office insurance policy will generally only cover work of a clerical nature. If there is any element of manual work it is unlikely that you will be covered in the event of a claim for public or employers liability.

All office insurers will impose a minimum level of security. This is normally imposes or requirement for a 5 level mortice deadlock on the final exit door and window locks fitted on all accessible windows. If there is a break-in and the minimum level of security is not complied with, the insurers are unlikely to settle a theft claim.

For more information regarding office insurance, please contact Senior Client Manager David Mann on 0118 9452944 or complete one of our enquiry forms.

SME bosses risk legal action over ‘office antics’

15/10/2010 in Insurance Industry News, Office Insurance

SME bosses could be leaving themselves open to legal action by being unaware of the level of sexism, swearing and shouting in the workplace, according to a new study* by specialist business insurer Hiscox.

At the same time, the study found seven in ten (70%) UK workers claim that bad behaviour is rife in their place of work – admitting that the regular occurrence of racist jokes, arguments and bullying could offend colleagues.

The study separately questioned UK SME bosses and UK workers about behaviour in the workplace. Comparing the responses revealed a considerable gap in attitudes between bosses and employees towards ‘office antics’.

SME bosses (70%) say they are ‘unconcerned’ about the threat of legal action, suggesting they are unaware of potential pitfalls. Even in today’s politically correct society, half (50%) find it acceptable to display ‘sexy celebrity’ calendars or rate the relative attractiveness of colleagues (49%), which may potentially cause offence. This is despite more than half (55%) of those workers surveyed claiming they would consider legal action if office behaviour crossed the line.

In fact, almost nine in ten (87%) SME bosses say staff need to be ‘grown up’ over office antics, with eight in ten (82%) believing there is nothing wrong with office banter and two in five (42%) saying it is not their role to regulate it. Half of UK employees (51%) disagree and believe their boss should do more to reign in unacceptable behaviour.

With the Christmas party season approaching, employers should be especially aware of the fact that ‘banter’ can easily cross the line to harassment. Over half (58%) of the UK workers surveyed expect colleagues to get drunk and misbehave at their festive bash, and two thirds (66%) think conduct is worse if parties are held in the office – as many companies are likely to do this year to cut costs.

Questionable conduct seen regularly in UK workplaces includes:

1) Use of nicknames for colleagues (61%)

2) Swearing (59%)

3) Use of pet names such as ‘love’, ‘babe’ and ‘hon’ (47%)

4) Hugging (42%)

5) Banter of a sexual nature (35%)

6) Arguments/shouting (33%)

7) Jokes of a religious, racial or sexual nature (28%)

Discussions about most/least attractive colleagues (16%)

9) Bullying (15%)

Callum Taylor, small business expert at Hiscox, comments: “In the modern workplace one employee’s banter can easily turn into another employee’s lawsuit. With 70% of employees citing behaviour in the workplace as often offensive, our research highlights an area of workplace culture that SME bosses must be more aware of in order to avoid unexpected legal action.

“This is a year round issue but one that will become particularly relevant in the office Christmas party season, particularly with many companies opting to cut costs and have their celebrations in the office. Having in place a clear code of office conduct and ensuring that behaviour falls within acceptable boundaries could help prevent a damaging and expensive legal action.”

Tips for businesses in the run-up to Christmas

18/11/2009 in Office Insurance, Professional Indemnity Insurance, The Macbeth Team

Businesses should be aware of the additional risks they face in the run-up to Christmas. Why not follow these top tips:

■ Make sure your sums insured are adequate for increased stock
■ Don’t block intruder alarms, sprinkler systems or fire exits with piles of Christmas stock
■ Make sure you have alarms, sprinklers or other security equipment in good working order particularly if you are closing premises for any period over the Christmas holidays
■ If you’re taking on additional staff, carry out thorough background checks and provide adequate training
■ Consider extra security to protect your staff against drunken behaviour and prevent theft
■ Regularly remove cash from tills during the working day and place takings within a safe (preferably with a time delay) – this will reduce the amount of cash stolen should a hold-up attack occur
■ If large amounts of cash need to be banked or collected on a regular basis, then the safest method is to employ a recognised cash carrying company
■ Be aware of how much money your policy will cover while on site, off site and during transit

Macbeth Chartered Insurance Brokers are business insurance specialists. Based in Reading, we have particular specialist knowledge in Property insurance, Business combined insurance, Liability insurance, Professional Indemnity insurance, Cyber Liability insurance and Motor Fleet insurance. For further information call Tony Gibbs on 0118 9452 944.

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How to insure your IT

23/11/2008 in Business, Office Insurance

As IT becomes essential to running organisations, specialist policies are popping up to insure data and systems.

IT operations are beset by risk. Dangers lie everywhere, whether it’s tornados flattening your data centre or script-kiddies flattening your website. You can work with insurance companies to build policies protecting your company against many types of risk but can you take out a policy covering the risks associated with computing?

Several companies do offer insurance policies for IT risk. Some specialise in liability insurance for IT service providers, while others also cover companies using IT for their businesses. This can either be done as part of an existing policy or as a dedicated policy with extensive coverage.
In the UK, for example, Chubb Insurance insures companies against the impairment of computer services as part of its commercial property policy. In the US it has a dedicated IT security insurance policy for financial data which covers electronic theft, denial of service, electronic vandalism and compromised data during electronic communication.

Assessing IT risks in monetary terms isn’t always easy. When the Nationwide Building Society recently suffered the theft of an employee’s laptop containing unencrypted customer data, it found out just how quantifiable its risk was – the FSA fined it £980,000. But such fines are uninsurable, explains Chris Fitzgerald, managing director of specialist IT insurance broker FRD Risk Solutions. “In the UK that would be construed as being against public policy,” he says. “What you can insure against is the cost of a PR consultant to mitigate the reputational damage, and potentially the additional cost incurred to re-allocate client account details.”

TJX Group, which lost millions of credit card records after malware was installed on its server, could have been insured, but such insurance would need a dialogue between the client, the broker and the underwriter. “Quite often when pricing structure is put forward for those covers, clients can baulk at the premium because it can be significant to say the least,” Fitzgerald says.
But how are such premiums calculated?

Underwriters will often maintain partnerships with specialist IT risk assessment companies. The underwriter’s expertise complements the broker’s own investigation of the client’s business processes and QA procedures. Chris Cotterell, a partner at large ICT insurance underwriter Safeonline, explains that the company divides policies into five risk levels. The first and lowest level addresses companies which simply use email and store data on office systems. The highest would address customers such as ecommerce companies who are totally reliant on the internet for their business.

“At a certain level, we ask for an audit to be done and use an outside firm to do that. But if it’s a relatively small risk we’ll just ask them a few questions,” Cotterell says. They may be asked whether they have a privacy policy in the company for example, or whether they regularly monitor information on their premises or maintain a firewall. “If those questions are answered correctly then we’ll give them the insurance,” he says.

The cost of risks in first-party IT insurance contracts that compensate the owner of the policy are easier to quantify, says Paul Skinner, senior ICT underwriting specialist at Chubb Insurance. “On first-party, you can calculate the value of property and look at business interruption,” he says. But third-party liability, where you’re compensating someone else for the failure of your computer systems, is harder to quantify.

Understanding the cost associated with, say, compromised customer data is a difficult and inexact task. Whereas actuaries are used to dealing with detailed, tried-and-tested tables and equations for other types of insurance, things are less mature in the ICT industry, according to Cotterell.

“In 10 or 20 years’ time there will be actuarial studies, and they will have arrived at an exact model, as they have with car insurance,” he says. “We don’t have that level of data yet, so we take what we think are reasonable rates based on reasonable risks.”

Mark Greisiger, CEO of NetDiligence, which conducts IT risk assessment services on behalf of insurance companies, says: “The difficulty in this space is that people aren’t willing to tell you truly if breaches occur, and if they occur, how much the average loss is.”

Actuaries use the best information available – normally studies from organisations like the FBI and the Computer Security Institute – but even these figures are far from exact, he argues. Data breach disclosure laws in the US (and possibly soon in Europe) help with this to a certain extent but it’s still far from an exact science.

“Everyone has their own figure for potential loss due to a breach or a problem. There isn’t really a standard framework,” warns Ken Newman, who grapples with such issues as vice president of security at the American Savings Bank in Honolulu. “But I know that we’re spending more time evaluating the identity-theft space.”

NetDiligence’s Griesiger agrees that privacy has become a focal point in recent years following incidents with firms like TJX Group and others. He says: “Cyber policies have extended themselves to cover any type of exposure no matter where that data is. Often we’ll see back-up tapes fall off the truck, laptops lost and so on. And then there are people improperly shredding information and putting it in a dumpster for it to be blown down the alley.”

Greisiger adds that customers using outsourced IT services can be another risk for insurers. Depending on the nature of the service and the size of the outsourcing contract, outsourcing providers may not always indemnify their clients or provide details of their own risk avoidance policies for their customers to pass on to insurers. Insurance companies will often bite the bullet and insure an outsourcing customer anyway but working with a larger, more established outsourcing provider will definitely help, he adds.

Insuring against IT risk is still a relatively immature area but as regulators continue to badger board members about their corporate risk and internal controls, it may become an increasingly visible issue for companies. IT operations may already be at least partly insured in existing contracts but this isn’t something that IT directors will want to leave to chance.

If you would like further advice regarding IT insurance, please contact Tony Gibbs on 0118 9452 944 or email tony.gibbs@macbeths.co.uk

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Office Insurance

Macbeth insurance feature in the launch video for new Microsoft Office 365 product