Archive for February 2012

Sports Insurance Explained

Britain is one of the World’s leading sporting nations with millions taking part in all sorts of events up and down the length and breadth of the country every day of the year. Surprisingly though many of us take part in sports without knowing the potential risks and possibly life changing consequences that can occur on the local park, playing field or fun run marathon, as easily as they could at Twickenham or Wembley, for example.

All sports involve risks of varying degrees both to those involved in organisation, participation or merely spectating. So in this year of the London Olympics, Insurance Blog takes a look at the different types of risks that players, clubs and coaches may face both on and off the field and the various covers and policies that are available to protect both individuals and businesses involved in sport.

Sports injury and accident insurance is perhaps the most widely sort after personal protection cover by sportsmen and women who wish to indulge in the favourite pastimes without fear that an injury will financially hurt themselves or others. Sports accident and liability insurance policies can be bought by individuals, coaches and sports clubs and is available to adults and children both amateur and professional.

Individual cover
Sports Accident Insurance policies offer a range of protection for loss of earnings or income, personal liability to others you may injure in the course of the sporting activity, physiotherapy for recovery, legal expenses against being sued and various levels of personal accident and injury rehabilitation cover, the cost often dependent upon the type of sport in which the policyholder is engaged. Cover can be purchased for a single day, multiple day event or on an annual basis.
Typically sports liability insurance will cover you against claims of up to £2 million although higher limits of public liability indemnity are available.
Personal Accident cover is available to both adults and children involved in sports and the levels of cover and benefits paid are usually comensurate with the premium charged. If you are injured playing sports you will receive payouts for your injury as defined in the policy.
The cost of sports injury insurance is dependent on a number of factors such as what you do for a living and how much income protection you need, if any. Many policies are flexible and allow you to add additional covers or raise limits, usually for a price.

Sports Team Insurance
This offers exactly the same types of liability, accident and income protection cover as for individuals, however on a team basis with the number of players or squad covered defined by the team sport. Additional covers can include travel insurance for away fixtures, property insurance, and ground cover for clubs. The sports team insurance cover is available for both children and amateur or semi-pro adults teams and premiums vary depending upon the type of sports activity engaged in and the occupations of the players.

Sports Coaches, Instructors and Personal Trainers
If you are involved in sports coaching or training as a business then it is essential that you cover yourself against claims or loss of earnings and if you employ staff to assist, then employers liability insurance is a legal requirement.
Coaches and trainers can purchase annual packages and schemes that are particularly designed with their activities in mind. As with individual sports accident policies, Coaches insurance includes income protection covers, personal accident covers and public liability as standard, which can be extended to cover employees and products where necessary.
A feature of Sports Coach, Fitness Instructors and Sports Trainers package cover that is unique to this insurance is that of advice inclusion which is effectively professional indemnity insurance.
As a coach you are in a position of trust giving advice to those around you who expect the advice and knowledge you pass on to them to be correct and safe. If the advice you give proves to be negligent you could find yourself facing expensive legal action if one of your ‘students’ decides to claim. This advice inclusion protects you against such eventualities.

Sports Business Insurance
If you are in a sports based business you will need a specialist sports business insurance policy. These annual commercial packages offer employers liability usually up to £10 million to protect you against negligence claims from your employees, public liability with varying amounts up to £5 million to proctect your business against claims from the public and product liability if you supply sporting goods or apparatus.
Sports business insurance packages also offer buildings and contents insurance for offices, clubs and sports grounds as optional covers. This type of business insurance is open to sole traders, partnerships, sports clubs and charities and limited companies engaged in sports activities.

Sporting Event Insurance
If you are organising a one off sporting event such as a marathon or kids football match or a five day event of sport such as a surfing or skateboard festival, you will need sporting event insurance. The policies offer basic public liability insurance determined by the number of spectators, which could be fifty or fifty thousand for example. In addition employers liability cover is a must for staff and is usually available as an additional option. Most policies also offer cancellation and pluvial insurance covers, although these can significantly add to the cost of organising the event. Cover is available for single events and is often charged by the day.

Commercial Insurance Covers And UK Flood Risks

Recent extreme weather events in the UK have affected thousands of businesses, many of whom are now struggling to find commercial insurance which will cover flood damage. Instead of declaring flooding as a fundamental risk covered by Government, the powers that be have adopted a King Canute approach and last week announced a further two billion pounds worth of flood and sea defence work.
flood in 2009
Whilst Insurance blog applauds the capital expenditure on public works which are much needed in the current economic environment, this does little to address the potential losses or help those small businesses who currently cannot get cover for water damage caused by flooding.

Types of Flood
Most regions of the UK are at risk of flood to some degree due to the propensity to site populations on river flood plains and coastal areas.
Floods in the UK are either inland, which are all in some way the result of precipitation, or coastal, which can be due to either precipitation or inundation.
There are likewise varying degrees of damage caused by floods from the small localised event to the large and catastrophic.

Inland Floods
Most floods on inland areas in the UK are caused by rivers and run-off overflowing and bursting the available channels, following a long period of heavy rainfall on higher ground. A typical example of this type of flooding causing business damage is where commercial property has been built on industrial estates on river floodplains such as occurred at nationwide in the November floods of 2009 and on the River Don in Sheffield in 2007.
Sheffield incidently is also the scene of the UK’s worst man made flood disaster when the newly built Dale Dyke Dam broke as it was being filled for the first time in March 1864. An estimated 3 million cubic metres of water (700 million gallons) swept down the Loxley Valley joining the River Don in Sheffield centre and on to Rotherham, destroying 800 houses and businesses and killing 270 people.

Another type of inland flood risk is liquifaction, which is where ground water rises following a period of rainfall, saturating and penetrating buildings and ground above areas where runoff is limited. A typical example of this occurs in villages and towns lying on the chalk aquifer of the North and South Downs where spring water regularly floods basements.

Coastal Flooding
Coastal inundations are now more limited to extreme events due to four hundred years of construction of sea defences, although coastal erosion and rising sea levels are now threatening some livelihoods.

Thames flood map
The most typical coastal flooding occurs when a heavy rain bearing low pressure cyclone coincides with high spring or neap tides as occurred in the North Sea in 1953. A total of 307 people were drowned along the East coast from Lincolnshire, Norfolk and Suffolk to Essex. The greatest loss of life and damage to property was in the Thames Estaury where the extreme weather system caused a storm surge and sent a wall of water up the river drowning nearly 40 people in Canvey Island alone and leaving some 24,000 homeless and many businesses destroyed. This event led to the construction of the Thames Flood Barrier to protect London and the building of sea wall defences all around low lying ground.

Britain is not immune to Tsunamis either!
tsunami warning
In January 1607 a ten metre wave believed to have been formed by movements in Atlantic plates swept up the Western approaches and funnelled into the Bristol Channel. The resulting inundation led to the drowning of an estimated 2,000+ people, with 200 square miles (518 km2) of farmland inundated on the Somerset levels, leaving Glastonbury some twenty miles inland, as an island!

bristol channel tsunami

The likely extent of the 1607 Bristol Channel tsunami inundation provided by the Environmental Flood Agency

Drownings were recorded as far North as Worcester. Little wonder those protesting the current development of a new nuclear power station at Hinkley Point hold such fears after the recent Fukushima events.

Commercial Insurance Covers For Flood Risks

Whether your business will be able to purchase insurance to cover risks from flooding depends primarily upon the location of the business and the risk factor associated with the location as provided by the Environmental Agengy Flood Risk Map. This Government data is used by insurance companies, along with known claims data to assess the risk of flood at any particular location and to either price the risk accordingly or reject it. If you are thinking of leasing or renting commercial property is advisable to check the flood map and previous occupiers insurance, before entering into any long term agreements.

A typical commercial property insurance policy will cover or exclude structural damage to buildings fixtures and fittings and machinery caused by flood. Many policies have separate property contents cover for loss of records, office equipment and stock which may or may not be covered depending upon your situation and policy. If you operate in a flood risk area there may be certain policy limits applied which will not cover your potential losses, leaving you effectively under-insured.

Perhaps the greatest risk to a business enterprise from flooding come is the form of business interruption. A business that has suffered serious flooding can sometimes take up to six months of de-humidification and a further six months of structural repairs, before it can trade again. Other unforeseen factors such as the loss of bridges and infrastructure in a flood affected region can seriously affect turnover, even if a business has not been directly flooded.

If your business has been or has the potential to be affected by floods you will find it difficult to obtain cover on the open market. There are however many small business insurance brokers that specialise in declined commercial risks and can offer competitive premiums through managing general agents at Lloyds. It will be interesting to see how many of these survive if the UK suffers regular extreme weather as has been experienced for the last five years.

Royal Bank of Scotland Insurance Ungoes Rebrand

Have you noticed the large number of prime time adverts on UK television this week for Direct Line?

You know the banal ones featuring Alexander Armstrong of Pointless and Pimms O’clock fame ranting on about ‘you won’t find us one car insurance comparison sites’ and ‘twelve months cover for the price of ten’

No? Well you should take notice of them as you the British taxpayer have an 82% share in their success, for now.

Royal Bank of Scotland Insurance, a subsidiary of RBS the toxic bank bailed out by the UK Government in 2008 and the major reason the Bank of England has had to create over £200 billion of debt, is looking like it is the first of many parts of the operation that will be sold or hived off.

RBSI this week renamed itself as Direct Line Insurance Group and changed its company status to a plc from a private limited company. This move suggests that it aims to openly float on the Stock Exchange although it could be priming itself for a private sale to one of the large multi-nationals.

A question mark hangs over the over famous brands bought by RBSI including ageing dog Churchill and ‘Joanna Lumley’s’ Privilege. Perhaps these could be sold off separately or with their own book of business. RBSI also own the commercial insurance broker only channel NIG, which is the antithesis of Direct line in it’s structural model.

The UK Government has stated that all of RBS Insurance interests must be disposed of by 2014.
Just in time for Scottish Independence!