Property Cover for a Drainage Contractor19/02/2018
First Insurance Solutions is the leading broker and advisor on insurance for drainage contractors. We have many years’ experience in dealing with and resolving insurance and claims issues for drainage contractors, and are genuine insurance specialists in this industry. We have taken the time to really understand your industry as well as our own, so that we can use this combined knowledge and experience to ensure our clients get the best advice and cover at the right price, and receive real-world relevant solutions to everyday problems.
The insurance industry has never had the greatest reputation, and it’s a common expectation for policyholders that they are going to have to fight against the insurer in order to get a claim paid. The truth is, insurers want and expect certain things to be apparent and available in the event of a claim, and these aren’t always things which are to hand when a loss arises. The key to a successful claim is planning and preparation before and not after the event, and like many areas of life “in order to play the game, you first have to know the rules of the game”. What we are going to attempt to convey to you in this article is how to ensure your “ducks are in a line” before a loss happens, and what to expect when a claim does happen.
An area which many insurance providers and drainage contractors get wrong is the cover for Kit / Tools and Equipment. It is important to get the information correct in respect of what kit you have, the value, and where it is kept.
What Kit do you have?
The drainage industry has a wide range of comparatively high-value equipment frequently used to carry out work. Common equipment includes Scanners, CCTV Survey Kits, Re-Lining Kits, Jetters, Robotic Crawler Cam Units, Lighting, Generators, Tools and Breathing Apparatus & PPE. Much of the kit used in the industry is hi-tech equipment, which can surprise insurance advisors and providers who are not familiar with the type of equipment needed to survey a drain system. Insurance cover which contains restrictions in respect of recording equipment, computer equipment or hi-tech equipment can cause an issue if a claim arises.
What is your Kit worth?
This is a common area of misunderstanding or miscalculation and, if not fully considered and covered correctly, can cause significant issues when making a claim. Important areas for consideration include: how much the equipment cost to purchase, any discounts or offers that were applicable at the time of purchase (as these might not be available when you need to replace a lost item), for how much an item can be sourced of similar age and condition, and are these items readily available if a loss arises.
It’s important to ensure that you have a full inventory of all your kit including values as this will assist you when dealing with insurers in the event of a claim. You should also be certain that your insurance provider is aware of all the kit and the total value, as under-insurance will result in underpayment of a claim. It is also worth keeping proof of purchases for all the equipment in one place if at all possible.
A typical inventory might follow a similar template to this:
It is worth reviewing the Replacement Value for each item every year.
Where is your Kit stored?
Drainage contractors store kit in a multitude of locations under various levels of perceived security, from the back of a van to a securely locked building. Due to the fact that drainage engineers can work 24 hrs a day, it is not always possible to empty their van or comply with conditions which restrict cover overnight.
It would be our advice to look at the various places you keep your kit and ensure that the right limits of cover are in place for each location. We also recommend you envision the worst case scenario, so consider how much is in your lock-up over the Christmas period or how much could be in a van if you were working away on a large job.
An efficient way of assessing the cover you need for various locations is to use a similar template to the below:
Abandonment / Recovery
Engineers often remotely control robotic cameras operating underground from the surface during ‘no-dig’ works. This has the potential for an item to fall down an unforeseen gap and become immobilised or irretrievably stuck in a pipe. With these camera units costing up to 5 figures in value, this is usually symbolic of a “bad day in the office” but there are ways to get cover for these items if this is a risk you wish to pass to your insurers.
Drainage contractors often have substantial equipment fitted in the back of their vehicles. Fitted means fixed to the vehicle and will be screwed in place so that it becomes an integral part or modification to the vehicle itself. It is common for drainage vans to have jetters fitted in the back of their vehicles, so the insurance cover in place needs to consider these and provide appropriate protection. This is not just restricted to jetters, and in our experience can often include fitted viewing suites in the rear of vehicles or fitted re-lining kit, and even trailer mounted equipment. Cover can be provided for fitted equipment in vehicles, which can include the cost of removing and re-mounting after a vehicle has been involved in an accident. We are also able to provide a service to our clients enabling them to hire replacement jetters, reducing the impact on the operation of their business from an incident. All equipment fitted to your vehicle needs to be covered, and simply expecting it to be covered as part of the vehicle can results in a misjudgement in the event of a claim.
Case Study – Theft of Equipment from Vehicles
A drainage contractor had cover for their Business Equipment on an All Risks basis anywhere in the UK. The contractor perceived this as providing cover for up to £8,000 of Business Equipment anywhere in the UK under the property section of their insurances.
One of their operatives was working in the early hours of the morning at a hotel doing a standard survey and clearing the blockage of a toilet system. The van was parked outside the front in the hotel car park and the operative had locked the vehicle. He was working in the hotel itself when a third party broke into the van and stole £7,000 worth of Equipment including a CCTV kit and some loose tools and equipment.
The insurer refused to pay for this claim based on the fact that the cover was under a “Business Equipment” section which is designed for mobile phones and laptops, not Tools of Trade or Plant and Equipment. The policy also had a Theft from unattended vehicles overnight exclusion which applied while the vehicle was unattended overnight (between the hours of 8pm and 7am).
Result: the claim was declined and no payment was made.
What should have happened.
The cover should have been arranged on a Contractors All Risks policy under the Own Plant / Equipment section, or under a Goods in Transit policy, or both if required. This would have provided cover for the right type of equipment and it would have meant overnight cover from an unattended vehicle could have applied, through no restriction or through the fact that the vehicle was “working” at the time and the claim would have been valid and got paid out up to the specified values to replace the lost equipment.
The key to ensuring that your cover pays-out in the event of a claim is to speak with a specialist who understands the kit you have and the cover you require as well as knowing what to cover and where. If you choose not to cover something, then it should be an informed and considered decision and not a nasty surprise when you come to make a claim. Our approach is that while it can be a hassle to get all of the above in order, it only needs to be arranged once and then maintained. It is a lot easier to do this now rather than after a loss has occurred when you are trying to get a claim paid.