Archive for Income Protection

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.

Mortgage Companies Attempt To Avoid New PPI Misselling Rules

The availability of mortgages at all levels is essential to kick-start the failing housing market and the industries that rely upon this, from construction to those selling white goods or home insurance. Without readily available and free flowing capital, the UK economy will self implode.

However it now appears that the ‘not so ready to lend’ lenders, principally the banks and building societies who caused the mess in the first place, are now restricting the capital flow further with the provision of ‘new’ products designed to protect their capital and circumvent the recent legislation outlawing the selling of PPI (Payment protection insurance) at point of sale of the loan or mortgage.

Fortunately both the FSA and consumer watchdog , the OFT (Office of Fair Trading) have been keeping a close eye on these activities and have today issued a joint statement warning the providers of these products to obey the rules or face the consequences. Both UK Government organisations are determined that another PPI mis-selling scandal should be avoided as new mortgage protection products emerge.

The two quangos have joined forces on proposed guidelines to lenders in relation to new PPI type products, the responsibility for which can fall within either regulator’s area of operations.

The statement emphasises that now is a key time to reinforce the regulations as the insurance market shifts away from PPI and providers begin to develop new products or product features.

Under particular scrutiny are short-term income protection marketed as debt freeze or debt waiver when included with a credit or loan agreement or mortgage.

Some of the payment protection products that the FSA and OFT considered during the preparation of this proposed guidance are:

Insurance. This includes short term income protection or ‘STIP’, an insurance contract which provides a pre-agreed amount to the policy holder if they experience involuntary redundancy or are incapacitated through sickness or as a result of an accident and may be combined with other forms of insurance cover or include other benefits, and which:

o has a maximum time-limited benefit duration;
o is written for a term which is less than 5 years and not predetermined by the term of any credit agreement or RMC; and
o can be terminated by the Insurer.

Non Insurance the creditor agrees to freeze or waive the requirement on a consumer to make periodic repayments, or to freeze or waive interest or other charges, when a specified ‘event’ occurs, such as sickness or unemployment.

Insurance products are regulated by the FSA under the Financial Services and Markets Act 2000 (FSMA). Non-insurance protection linked to a regulated first charge mortgage contract are also regulated by the FSA. Non-insurance protection linked to a credit or hire agreement (including a second charge mortgage) will typically be regulated by the OFT under the Consumer Credit Act 1974 (CCA).

The two organisations will continue to monitor developments in the market, and will take appropriate action under their respective powers where products or practices risk causing detriment to consumers.

The FSA’s guidance stresses that firms should ensure that product features reflect the needs of the consumers they are targeting.

Margaret Cole, FSA managing director, said: “This is the first time that the FSA has issued guidance on the design of a specific product. Firms must learn the lessons of the past and make sure they have consumers’ needs at the heart of new product development.

“That is why we are acting early to ensure firms understand the risks they should bear in mind when designing these products, and how they can manage these risks when developing or distributing the product.

“The FSA cited new forms of payment protection products as an emerging risk in its Retail Conduct Risk Outlook earlier this year, and we are following up on that warning.”

The OFT’s guidance sets out how the OFT considers the Consumer Credit Act applies to payment protection products such as debt freeze or debt waivers linked to a regulated credit agreement, and what firms can do to ensure compliance.

In particular, firms should ensure that consumers are absolutely clear about the nature, price and implications of payment protection products.

For example, if an agreement is offered with an option to choose debt waiver terms, on payment of a fee, it may be necessary to provide financial information including and excluding the cost of the debt waiver.

The guidance also sets out examples of business practices in relation to payment protection products which the OFT is likely to regard as unfair or improper (whether unlawful or not) and so may cast doubt on fitness to hold a consumer credit licence.

David Fisher, the OFT’s Director of Consumer Credit, said: “It is important that the problems encountered with mis-selling of PPI do not arise in relation to new payment protection products.

“Firms need to ensure that they comply with relevant legislation and do not engage in unfair or improper business practices. In particular, they should make clear to consumers what they are signing up to and how much it costs, so that they can make properly informed decisions.”

The consultation will be open for ten weeks, closing on January 13.

With unemployment threatening to reach record levels as the public sector shrinks, it is essential that consumers can purchase protection against accident sickness and unemployment when they commit to a mortgage or large loan. Mortgages must be made easier to obtain and mortgage protection products available to alleviate some of the risks involved in lending for both parties.
There are many established independent specialist companies out there who offer insurance at much cheaper rates than the loan or mortgage providers. Maybe one solution to this ongoing saga would be to outlaw totally the provision of cover for debt by the debt provider and its subsidiaries however they want to dress it up in fancy wordings.

Unemployment Insurance – Last Chance For Public Sector Employees

Unemployment has risen to over 2.5 million in the UK and with the future of many public service workers jobs in doubt, is expected to rise to levels of over three million by Christmas.

Todays official figures show levels of unemployment last enjoyed under Margaret Thatcher’s Tory Government of the Eighties.

Youth unemployment is at its highest level for 19 years.
Womens unemployment is at its highest level for over 23 years.
The public sector is traditionally a large employer of both these groups.
The Governments argument that the private sector creating new jobs will prop up the public sector has proven to be widely inaccurate.
David Miliband pointed out that for every two jobs lost in the public sector only one was being created in the private sector.

The result is that the economy is in a downward spiral and the public sector job cuts are fuelling the maelstrom.
Maybe our public schools are failing as well, because it is obvious that neither David Cameron or the Chancellor bloke, whose name Insurance Blog can’t remember, have even the basic skills in macro economics!

When there was a global depression in the USA in the late 1920′s, FD Rooseveldt’s ‘New Deal’ of public works and public sector employment, brought America out of the downward spiral and introduced infrastructure which gave the post war US a massive competitive advantage.
President Obama has finally realised that cuts don’t work and has announced a massive Federal investment in public works. Alex Salmond, Leader of the Scottish Parliament today said that unemployment was down in Scotland during the last three months due to a large public building program.

David Cameron is carrying on making people and public sector workers unemployed.

If you work in the Public Sector there is still time to get unemployment insurance and income protection however you must hurry.

Income Protection Insurance is available to eveyone in full time employment. As long as you have not been informed by your employer that your job is at risk, you can still take out an income protection policy.

Act quickly and you can protect your mortgage, rent and other regular payments such as council tax, utilities bills, finance agreements and even gym memberships and satellite/cable tv bills. With low monthly payments you have a choice of cover between accident, sickness and unemployment, accident and sickness or unemployment only, with 12 or 18 month benefit options.

Payment Protection Insurance Claims cost Lloyds Bank £3.2 Billion

On of the major players in the Credit Crunch which had to be bailed out by the UK taxpayer and contributed to the current deficit  – Lloyds Banking Group – has announced today that it has set aside a £3.2bn provision for claims from clients that they were mis-sold payment protection insurance (PPI), which accounts for the bulk of the £3.7 billion loss it has reported.

Lloyds Bank  has decided to settle all the PPI misselling claims after UK banks lost a High court judicial review called by Barclays and others over PPI  claims compensation last month.

Payment protection insurance also known as ASU, Income Protection Insurance and Mortgage Protection Insurance,  was sold by the large banking corporations at inflated rates to cover in particular credit cards, personal loans and mortgage repayments  if income ceases or falls because of accident sickness or unemployment.

Since 2009 thousands of Uk complainants have received compensation because their policies were mis-sold. Missold, because they were sold policies that were either not explained to them, did not cover them because of certain exclusions or in the majority of cases was only taken out for fear of not obtaining the loan.

The Financial Services Authority (FSA) published guidelines last year which said banks should contact all PPI past policyholders to ask them to complain if they believed they had been mis-sold PPI.

Insurance Blog is pleased that the UK Government owned bank is leading the way on payment protection insurance compensation claims. The other banks will now have to follow suit.

It is only fitting that the big banks who were the main offenders in the misselling of PPI should be made to pay and not the hard pressed insurance industry, and particularly the Insurance Brokers, that has so far footed most of the bill with ridiculously high FSA fees, which in many cases has created barriers to entry for the UK Financial Services market.

On a footnote if the Bank of England keeps Interest Rates at the same level today, it will be a good day for the UK Public.

 

UK Unemployment hits record heights

The UK Government have just released the latest economic indicators from the Office for National Statistics (ONS), and it makes grim reading. doom and gloom awaits us all if the trends continue……

If you haven’t taken out unemployment insurance yet, there may still be a little time, although given latest figures you will have to move as fast as the postman with the redundancy notices, as UK Unemployment hit record heights.

Here’s the facts of the state of Britains Economy

These are graphs showing the working age employment rate and the unemployment rate

The employment rate for those aged from 16 to 64 for the three months to November 2010 was 70.4 per cent, down 0.3 on the quarter.

The number of people in employment aged 16 and over fell by 69,000 on the quarter to reach 29.09 million.

The last time there were larger quarterly falls in the employment level and rate was in the three months to August 2009.

The number of people working full-time fell by 37,000 on the quarter to reach 21.16 million and the number of people working part-time fell by 32,000 to reach 7.93 million.

Part Time Working at all time high!

The number of employees and self-employed people who were working part-time because they could not find a full-time job increased by 26,000 on the quarter to reach 1.16 million, the highest figure since comparable records began in 1992.

The unemployment rate for the three months to November 2010 was 7.9 per cent, up 0.2 on the quarter.

The total number of unemployed people increased by 49,000 over the quarter to reach 2.50 million.

Male unemployment increased by 43,000 on the quarter to reach 1.48 million and female unemployment increased by 6,000 on the quarter to reach 1.02 million.

Youth Unemployment at record levels!

The unemployment rate for those aged from 16 to 24 increased by 1.0 on the quarter to reach 20.3 per cent, the highest figure since comparable records began in 1992.

The number of unemployed 16 to 24 year olds increased by 32,000 on the quarter to reach 951,000, the highest figure since comparable records began in 1992.

Redundancies on steady increase.
There were 157,000 redundancies in the three months to November 2010, up 14,000 on the quarter.

The number of people claiming Jobseeker’s Allowance (the claimant count) fell by 4,100 between November and December 2010 to reach 1.46 million, although the number of people claiming for up to six months increased by 7,200 to reach 960,300.

The total number of male claimants fell by 6,600 on the month to reach 1.02 million but the number of female claimants increased by 2,500 to reach 439,300.

The inactivity rate for those aged from 16 to 64 for the three months to November 2010 was 23.4 per cent, up 0.2 on the quarter.

The number of economically inactive people aged from 16 to 64 increased by 89,000 over the quarter to reach 9.37 million.

Early Retirement at Record levels !

The number of people who were economically inactive because they had taken retirement before reaching the age of sixty-five increased by 39,000 on the quarter to reach 1.56 million, the highest figure since comparable records began in 1993.

Wages Stay the Same!
The earnings annual growth rate for total pay (including bonuses) was 2.1 per cent for the three months to November 2010, unchanged from the three months to October.

The earnings annual growth rate for regular pay (excluding bonuses) was 2.3 per cent for the three months to November 2010, unchanged from the three months to October.

The Oulook.

Very Bleak!  The current situation is comparable to the early Thatcher years and the axe has yet to fall on 600,000 public sector workers. The knock on effects to the high street of this contraction in money flow will damage small to medium sized businesses as demand inevitably drops. Further unemployment within the already contracted private sector is inevitable as orders dry up and the unemployment queues will increase.

All sectors of the economy will suffer from this so called ‘double dip recession’ particularly high end products and high street businesses will suffer. Insurance will not have an easy time either! Already we are seeing once profitable sectors like shop insurance virtually disappear as a viable large market as the number of shops rapidly decreases. When was the last time you saw a high street travel agents or hardware store? The pattern is being repeated across all sectors of the UK Commercial Insurance market.

Coupled with this we are under immense inflationary pressures from energy prices and global food markets which inevitable, although foolishly, will lead to the Bank of England be foreced to politically raise Interest rates. After all, there are no more weapons in the economic arsenal.

Darwinian ConDemNation.

The future is blue and orange and civil commotion – If you are not a merchant banker, are you fit enough to survive?