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Lightning Strike & Business Interruption Cover

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Whilst many activity providers will be out enjoying the warm weather, the met office have issued warnings regarding thunderstorms, lightening, and heavy rainfall whilst the heatwave continues.

Lightning strikes are thankfully rare but they can happen, and they are only one possible cause of damage – fire, storm and flood damage are more common and of course all of these can cause a building to be unavailable for use, with practical and financial implications for an activity provider.  Ensuring you have Business Interruption cover as part of your policy is important.

A previous AIM member needed assistance during a violent storm of heavy rain and very strong winds, lightning struck the gable end of one of the dormitory blocks on their site. This strike damaged the fire alarm at the building which stopped it from functioning. The storm rumbled on and by 4am a local milkman, on his rounds, discovered the building was on fire and alerted the emergency services. Unfortunately by this time, the building had suffered significant damage including a collapsed front roof and damaged undercroft plus smoke damage throughout and all services (water/electric) were destroyed.

“The effect on future bookings could have been disastrous, a group was booked in for the following week so alternative accommodation had to be found and the local youth hostel kindly provided this for us. 

The need to have the correct plans in place to deal with an incident of this nature is paramount. The centre already had a critical incident plan which was adhered to at the time and since then we have continued to update this plan, and other processes on an annual basis”

This particular Member had Business Interruption cover, which was important for their survival as it covered loss of earnings while the new dormitory was being build and an entire term’s worth of business.  To lose this level of income would have been disastrous.  The outcome was a positive one for them but without this important cover the story could have been very different.

Are You Covered?

AIM offers Business Interruption cover to all members who take Property Damage cover.

Business Interruption covers loss of income (including rent where appropriate) and increased costs arising from damage to a member’s premises. Surveys indicate that most SME’s buy cover for their buildings and contents, whether with AIM or a conventional commercial insurer, but fewer opt for the protection of Business Interruption cover as well.

If you are interested in learning more about Business Interruption, and receiving a quotation, please contact our team and we will be happy to provide a quotation.

Are you Covered?

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As activity providers up and down the country prepare for a new season we wanted to remind Members that it is important to ensure all your equipment is covered and for the correct value and quantity.

Checklist

  • This means checking all your equipment and stock inventories annually rather than relying on last years’ figures.  Make sure you inform the AIM team of the correct new replacement values as undoubtedly the cost to replace these items will have risen.
  • When looking at the figures remember that whilst you may be able to replace individual items with second hand ones, in the event of a total loss, the cost to replace the whole amount with new items is actually a considerably different financial outlay.
  • Take a look at the number of kayaks, canoes, harnesses or helmets for example and ensure the number and value is correctly listed.

We have had occasions where cover was significantly underinsured and regrettably, we cannot pick up the shortfall for this. A theft of kayaks for example in the region of £21k, but listed as £3k would result in a shortfall being paid on any claim.  Many providers would struggle with a loss of this value.  

  • As providers look at diversifying or changing what they offer, please let the team know if you are planning new or different activities to those which you specified when you first came on cover with this.
  • Consider the Business Interruption and Employers Liability elements of your cover.  How long would it take for you to begin trading again after a significant claim such as a fire or flood?  Check if your BI Cover extends to the right amount of time. We can discuss this with you should you require it.
  • If you employ staff or use volunteers it is a legal requirement to have Employers’ liability for them.

The AIM team are always on hand to talk to you about your figures so if you are not sure please call or drop as an email [email protected]

 

Business Interruption – Claims Information

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Dear Member

Thank you for bearing with us as we discussed with the Supporting Insurers the evidence required to establish a case of Covid-19 being at the premises for cover to be afforded and a claim to be submitted.

Supporting insurers have now agreed that satisfactory proof of any of the following will be accepted as evidence that a staff member or visitor who was at the premises between the 5th and 26th March 2020 had symptoms:-

  • Staff sickness record
  • GP sickness certificate
  • Self certification for absence from work
  • Log of a call to GP to report symptoms/seek advice
  • GP entry in medical records to confirm symptoms and duration and advice given
  • Log of a call to NHS 111 to report symptoms/seek advice
  • Admission to Hospital with Covid-19 symptoms
  • Positive Covid-19 test result (albeit testing may have been very limited in March 2020)
  • A signed witness statement confirming symptoms, length of symptoms and duration of illness period, details of length of absence from work, return date to work and medical assistance sought together with supporting evidence.

You do not need to provide evidence of all of the above; if you produce satisfactory evidence of one, that will suffice.

If you are able to produce evidence to support a case at the premises, please send details to [email protected] so we can process your claim and then seek further information from you regarding financial losses.

Update to Members on Business Interruption – February 2021

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Dear Member

Thank you for bearing with us as we engaged with the Mutual’s Supporting Insurers, MS Amlin, regarding the Business Interruption cover following the FCA Test case and the subsequent decision of the Supreme Court.  I am very pleased to confirm that we have reached agreement with MSA.  Following a constructive discussion with them, we can confirm that the cover wording provided by AIM will provide cover for Business Interruption caused as a result of the lockdown commencing in March 2020, subject to the criteria shown below.

The AIM cover wording requires there to have been a case of the virus “at the premises” which has resulted in restrictions on the use of the premises, on the order or advice of the Government, for the policy to provide cover.  Therefore, we confirm that there will be cover in the following circumstances:-

The first lockdown period 26th March 2020 to 4th July 2020

  1. You must be able to demonstrate a case of Covid-19 at your premises (being the premises as detailed in your policy) between the 5th and 26th March 2020. The 5th March is the date that Covid-19 was classified as a Notifiable Disease and the 26th March was the date the Regulations confirmed the national lockdown.
  2. If the criteria in 1. above is met, you are able to submit a claim for Business Interruption suffered as a result of the Lockdown from 26 March.  That Lockdown ended on 4 July when most businesses were able to re-open.   Some businesses were, of course, able to re-open before 4 July.  In either case your loss will be calculated accordingly and the indemnity payable will reflect the period of closure and the effect of re-opening although, of course, the overall indemnity will reflect losses suffered throughout the relevant Period of Indemnity. 
  3. If you had a case of Covid-19 at the premises after the 26th March and before the 4th July 2020, this case cannot be said to have caused the lockdown as it was already in force.

 The second lockdown period 5th November to 29th December 2020 and third lockdown January 2021 to March 2021

  1. In respect of the second lockdown from the 5th November 2020 to the 29th December 2020, and subsequent third lockdown period from January 2021 to March 2021, if you had a case of Covid-19 at your premises as specified in your policy schedule, in sufficient proximity to the start of the second and third lockdown periods, then there may be cover for losses suffered in the second and third lockdown periods.

 Ongoing restrictions on Residential Centres

We fully appreciate that some of our Members have been unable to reopen or resume residential visits and residential activities due to ongoing restrictions by the Department for Education.   There may be cover beyond the 4th July 2020 for such situations, while those restrictions continue.

 Exclusion Clause from 26th March 2020

MSA placed an exclusion clause on the BI wording relating to Covid-19 from the 26th March 2020.  Therefore any policies which renewed and any new policies starting after the 26th March 2020 contain the exclusion and cover would not be available.  Therefore you may have cover for the first but not for any subsequent lockdown periods.

Claims

If you consider that you are able to meet the above criteria, we invite you to submit details of your claim to [email protected].  Due to the likely volume of the claims and their complexity we will be instructing Loss Adjusters to handle the claims for AIM.  Further details as to the evidence you will need to show for a case being at your premises and confirmation of what financial documentation is required will be sent out to you.

I hope that for so many of our Members who have been through such a very difficult year that this provides some comfort.

 

 

 

Andrew Gardiner

Chair of the AIM Board

February 2021 

 

Business Interruption – FCA ruling

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We are aware of the judgement handed down by the Supreme Court on the FCA test case and whilst we do not believe it changes the position in relation to cover provided by AIM we have referred the matter to our legal team for independent review.  The FCA highlighted that each policy must be considered against the detailed, “complex” judgement to work out what it means for any particular policy.  This as you can imagine will take time to fully understand and as soon as we have a final answer this will be circulated to the Members of the Mutual that this may affect.

We would like to thank you for your continued patience.

Business Interruption – FCA Test Case ruling

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For those Members with Business Interruption on their cover the following update applies following the decision made by the FCA.

We are reviewing and considering the decision made by the FCA in the test case judgement handed down this week.  The Mutual Managers are discussing both internally and with supporting insurers and are doing so as quickly as we can, but cannot make any further comment at this stage.

If you want to pursue a claim under the BI cover, please follow the usual procedure for claims but we cannot comment on the validity of any claim at this stage.

For further information about how to make a claim please visit the Claims page on our website 

COVID 19 – Latest Update

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Supporting our Members through COVID 19 – UPDATE 7

We hope that you are all keeping safe and well and managing to resume businesses and activities or looking to the future with plans to restart.

Just a gentle reminder to ensure you have the correct Public Liability cover in place before you resume activities, email the team on [email protected] if you have any queries.

Keeping everyone safe

We wanted to remind all AIM Members that whilst we have eased from the initial lockdown there are still some restrictions in place and everyone must ensure that they are adhering to current Government guidelines to keep staff, visitors, and participants safe.  Notably to maintain the social distancing required and the hygiene and sanitisation of equipment.  We believe that this will significantly reduce the spread of the infection and any possible suggestion that a person has caught the infection whilst on your site or doing your activity.  Unfortunately, we have all come across instances where people have breached the rules whilst out and about, whether that be in public spaces or whilst shopping.  The team here are available if you have any concerns or queries about Risk Assessments related to COVID 19.

Business Interruption

The FCA test case has concluded and we await the Court’s ruling.  This is expected in September and we will update Members as soon as we have any further news.

Zoom meetings

Thank you to all of you who have attended the Zoom calls.  These have proved popular and there are planned meetings for the following dates.

Wednesday 9th September 17.30 – Co-hosted with Sam Sutton of New Forest Activities

Wednesday 16th September 17.30 – General catch up

Please let Cath Watson know if you would like to attend on [email protected].  If you have any suggestions for other topics, then please do let us know.  The Mutual is here for its Members so please tell us what you would like!

Claims

We know that many of our Members have resumed activities either fully or partially, therefore, please ensure that you notify us promptly if any accidents or incidents occur.  Even where there does not appear to be any failure or negligence on your part, it is important that we can work with you to investigate and if possible head off any potential formal claim.  With the financial difficulties faced by so many, unfortunately this can give rise to spurious accidents and claims as a way of seeking money.  We want to protect you all against such issues, so please ask if you have any concerns or need any pointers for risk management.  Our Mutual Manager, Sophia, and Account Executive, Ralph would be happy to assist with this so please contact them at [email protected] or [email protected].

If you are adhering to Government guidelines then it is unlikely that you will receive a claim that a person contracted the infection whilst on your premises, or whilst taking part in your activity. For a claim to succeed, the person would need to demonstrate that they did not contract it anywhere else.  With pubs, shops and restaurants now open, we envisage that this will be more difficult to prove.  Please be aware that if you do receive a claim, specifically for COVID 19 related issues, the Mutual’s supporting insurers have excluded any cover from the Public Liability section of your cover.  This means that we would not deal with any claim under the Public Liability cover and you would need to defend or settle the claim yourself; the cover would not respond to provide payment of any fees or claim.  We have seen this being excluded throughout the insurance industry as a result of the pandemic.  Unfortunately we have been unable to change this exclusion for AIM Members.

If you do receive a complaint or allegation concerning COVID 19 related issues, please inform us in the usual way, using the contact information below.  Wherever possible, we will assist you with developing a suitable response, including providing you with a template response letter.

For all incidents and claims, please contact the Claims team as follows:

Phone: 01892 888 475

Email: [email protected]   

We hope that you are all keeping well and if you have any queries or concerns do get in touch.  Thank you for your support of AIM.

Please join our closed Facebook group https://www.facebook.com/groups/798451153625523/

Or follow us on LinkedIn https://www.linkedin.com/company/activitiesindustrymutual/

The AIM Team

 

COVID 19 Update – AIM help for Members

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This has been an extremely distressing and stressful time for us all and we are acutely aware of how severe the impact of this pandemic has been for all our Members.   We have been working hard to be able to assist you and to answer your requests for payment holidays while many of you have businesses which have closed and all have cashflow problems.

AIM wants to do all we can to assist our Members. 

Those who have paid their contribution in full as one payment are being contacted separately.

For those Members who make monthly payments, we are offering a 3 month holiday break from payments for the period 1st May to end July 2020.  During this period, we will not expect you to make the usual monthly payment, and will allow until 30th September 2020 for these payments to be paid.  Your cover will continue.  If however you have any claims during this period (liability or property), we will need to receive payment in full for any missed months before being able to handle any claim for you.  If you are unable to make the payments by the 30th September 2020, please contact us.  If payments cannot be made up then we may have to cancel your cover.  If you do not want to have the payment holiday, please let us know immediately, otherwise we will not take any monies for these three specified months.

Alternatively if you are not able to carry out any activities, and only have Public Liability cover, you may prefer to pause your cover for a 3 month period until 31st July 2020, or until you are able to resume activities if earlier or later.  During this period, we would not seek any contributions from you if you have requested a pause in your cover but there would not be any cover in place during this time.  You will need to advise us as soon as you are able to recommence activities so we can ensure you have the correct cover in place.

Property and Employers’ Liability covers continue and we recommend to Members that you keep these covers in place.  These contributions will still be due, but are included in the payment holiday as above.

Business Interruption

In addition we wish to reassure Members that we have been in correspondence with the Mutual’s backing insurers regarding the Business Interruption wording and whether or not cover will be afforded by the insurer.  Those discussions continue and whilst the current position remains that it is unlikely that cover will be available, we are reserving our position with them.  We will update Members with any developments, albeit this may take some time.

 

Lightning Strike & Business Interruption Cover

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Lightning strikes are thankfully rare but as AIM Member Wide Horizons’ experienced, they can happen, and they are only one possible cause of damage – fire, storm and flood damage are more common and of course all of these can cause a building to be unavailable for use, with practical and financial implications for an activity provider.  Ensuring you have Business Interruption cover as part of your policy is important.

AIM member Wide Horizons is an adventure learning charity in the UK who provide adventure experiences to approximately 45,000 children and young people a year throughout 8 centres around the UK.

The Townsend site in Swanage needed assistance from the AIM team in October 2014, when, during a violent storm of heavy rain and very strong winds, lightning struck the gable end of one of the dormitory blocks on site. This strike damaged the fire alarm at the building which stopped it from functioning. The storm rumbled on and by 4am a local milkman, on his rounds, discovered the building was on fire and alerted the emergency services. Unfortunately by this time, the building had suffered significant damage including a collapsed front roof and damaged undercroft plus smoke damage throughout and all services (water/electric) were destroyed.

Simon Hicks, Head of Operations at Wide Horizons, told us that thankfully there were no guests in the building at the time and ironically, that was the first night that the building had been empty for approximately 3 months, showing the popularity of the site and the frequency of bookings for the dormitory.

“The effect on future bookings could have been disastrous, a group was booked in for the following week so alternative accommodation had to be found and the local youth hostel kindly provided this for us. One group who were booked in were relocated within the Wide Horizons family and changed their location to Wales. We were relieved and pleased that they loved it there and have continued to use that centre. We were unlucky to lose one booking who had to stay at a similar activity centre in Swanage but thankfully the school has remained with us since then.

The need to have the correct plans in place to deal with an incident of this nature is paramount. The centre already had a critical incident plan which was adhered to at the time and since then we have continued to update this plan, and other processes on an annual basis.

As part of its AIM membership, Wide Horizons has Business Interruption cover, which has been so important for our survival, as we were covered for loss of earnings while the new dormitory was being built and this covered an entire term’s worth of business, any one in business but especially working for or involved with a charity can appreciate the impact of losing this level of income.

Despite the fire, the outcome has been very positive for Wide Horizons. The building’s footprint hasn’t changed, but it has allowed us to modernise some of the structure of the building, which was originally built in 1928. We had new fixtures/fittings/furniture throughout, and as a charity that in itself had a significant impact as some of the furniture was in need of updating!

Being a member of AIM has provided peace of mind. In the event of a claim we found that this was handled both professionally and with compassion, AIM did a wonderful job”.

Are You Covered?

AIM offers Business Interruption cover to all members who take Property Damage cover.

Business Interruption covers loss of income (including rent where appropriate) and increased costs arising from damage to a member’s premises. Surveys indicate that most SME’s buy cover for their buildings and contents, whether with AIM or a conventional commercial insurer, but fewer opt for the protection of Business Interruption cover as well.

If you are interested in learning more about Business Interruption, and receiving a quotation, please contact our team and we will be happy to provide a quotation.

Business Interruption – Are you covered?

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AIM offers Business Interruption cover to all members who take Property Damage cover. Business Interruption covers loss of income (including rent where appropriate) and increased costs arising from damage to a member’s premises.

Surveys indicate that most SME’s buy cover for their buildings and contents, whether with AIM or a conventional commercial insurer, but fewer opt for the protection of Business Interruption cover as well.

Wide Horizons – Lightning Strike

AIM Member Wide Horizons is an adventure learning charity in the UK who provide adventure experiences to approximately 45,000 children and young people a year throughout 8 centres around the UK.  The Townsend site in Swanage needed assistance from the AIM team in October 2014, when, during a violent storm of heavy rain and very strong winds, lightning struck the gable end of one of the dormitory blocks on site. This strike damaged the fire alarm at the building which stopped it from functioning.  The storm rumbled on and by 4am a local milkman, on his rounds, discovered the building was on fire and alerted the emergency services. Unfortunately by this time, the building had suffered significant damage including a collapsed front roof and damaged undercroft plus smoke damage throughout and all services (water/electric) were destroyed.

Simon Hicks, Head of Operations at Wide Horizons, told us that thankfully there were no guests in the building at the time and ironically, that was the first night that the building had been empty for approximately 3 months, showing the popularity of the site and the frequency of bookings for the dormitory.

“The effect on future bookings could have been disastrous, a group was booked in for the following week so alternative accommodation had to be found and the local youth hostel kindly provided this for us. One group who were booked in were relocated within the Wide Horizons family and changed their location to Wales.  We were relieved and pleased that they loved it there and have continued to use that centre.  We were unlucky to lose one booking who had to stay at a similar activity centre in Swanage but thankfully the school has remained with us since then.

The need to have the correct plans in place to deal with an incident of this nature is paramount. The centre already had a critical incident plan which was adhered to at the time and since then we have continued to update this plan, and other processes on an annual basis.

As part of its AIM membership, Wide Horizons has Business Interruption cover, which has been so important for our survival, as we were covered for loss of earnings while the new dormitory was being built and this covered an entire term’s worth of business, any one in business but especially working for or involved with a charity can appreciate the impact of losing this level of income.

Despite the fire, the outcome has been very positive for Wide Horizons. The building’s footprint hasn’t changed, but it has allowed us to modernise some of the structure of the building, which was originally built in 1928. We had new fixtures/fittings/furniture throughout, and as a charity that in itself had a significant impact as some of the furniture was in need of updating!

Being a member of AIM has provided peace of mind. In the event of a claim we found that this was handled both professionally and with compassion, AIM did a wonderful job”.

If you are interested in learning more about Business Interruption, and receiving a quotation, please contact AIM.