Research conducted by AXA Business Insurance in September shows that landlords are struggling to keep up with existing laws and are not prepared for a new raft of regulation.
This summer has seen many new proposals in Parliament aimed at regulating the UK’s landlords.
The AXA survey highlights that the number one wish of tenants is for better energy efficiency in their rental property. Old heating systems, inefficient boilers and a lack of insulation are a huge concern both because of the safety hazard of outdated systems and the burden of high energy bills on tenants.
The government is currently proposing two energy measures aimed at landlords:
1) A ban on letting properties in the lowest energy efficiency categories - F and G. If your property falls into this category, it’s likely you’ll need to make improvements before the regulation comes into force in April 2016.
2) An obligation on landlords to make energy efficiency improvements requested by tenants. This measure is likely to come in by 2018 and will mean if a tenant asks for things like better insulation or double-glazing, you’ll need to comply. In this case, you’ll be able to obtain funding under the Green Deal Finance Plan, which will then be paid back in instalments on electricity bills.
The Household Safety (Carbon Monoxide) Bill would require landlords to have a working carbon monoxide detector in all their properties. The bill is heavily backed by the government and gas safety groups who point to the high numbers of people hospitalised or killed each year by carbon monoxide fumes.
The Immigration Act 2014 makes it a legal obligation for landlords to check the immigration status of their tenants. If a tenant is found to be in the country illegally, their landlord will receive a fine of up to £3,000 for failing to carry out the right checks. The compulsory checks will be piloted in the West Midlands in December 2014 and are likely to be rolled out across the rest of the UK in 2015. To comply landlords need to obtain evidence of each new tenant’s citizenship such as their passport or residence permit. Landlords need to take copies and keep them for at least 12 months after the tenancy has ended.
UK landlords advised to prepare now as government plans raft of new laws, September 18th 2013, AXA Business Insurance.
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Businesses producing consumer goods must adhere to product safety laws or face legal action with possible fines or even imprisonment.
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A recent survey* found that the top five concerns for small business owners are:
• Talent management, including recruiting and retaining staff
• Functionality and reliability of technology to run the business
• Taxes and government regulations
• Financing, with decreasing ability to acquire funds year-over-year
• Customer acquisition and retention
These results appear to confirm the fact that small business owners often struggle with many of the same issues as big businesses do. However, the big difference between the two is that small businesses often have minimal resources to sort out these challenges.
Notably, labour issues are the single largest business expense accounting for about 50% of the revenue of small businesses. While firms with high-performing employees are projected to grow three times faster than their peers, these employees are consistently a target for other firms.
Small businesses are most concerned with competition from other similar businesses in their area. Four in 10 small businesses responded that the biggest risk to their business is an interruption due to injury or illness, while 16% are concerned with data being lost, stolen or compromised and 11% worry about having essential equipment break down.
Many small business claims are due to damage to a building and/or contents, loss of income, and computer or data loss. Safeguarding a business with insurance from a variety of risks can alleviate the stress associated with these concerns.
Many of the UK’s SMEs do not have adequate protection from the risks they face. In some cases this is because the risks are simply being overlooked. For some with constricted cash flows, they may decide that certain insurance covers are a luxury rather than a necessity. This could prove an expensive misjudgement if all aspects of potential liability the business is exposed to, have not been properly identified and minimised.
Essential covers such as Employers’ Liability (EL) and Public Liability (PL) should be taken out without hesitation. If a business employs staff, even if they are part time or temporary, they are legally obliged to take out EL cover.
In the UK directors’ and officers’ insurance (D&O) is frequently held by larger companies but it has yet to become standard cover within the SME market.
It is a common misconception that legal expenses or professional indemnity insurance provide all the cover needed for these smaller companies. A recent Data monitor survey found that only 23.3% of respondents had D&O cover, down from 26.7% the previous year.
Risk management can be lacking in smaller firms as they can rarely afford the same risk management systems and resources as seen in larger corporations. This can make them more vulnerable to errors.
Even if someone has been involved in running a limited liability company for years without a problem, their personal assets could still be at risk. Any director, officer or employee carrying out supervisory functions can face unlimited personal liability for actions they take on behalf of the company.
New legislation such as the UK Bribery Act 2010 puts additional responsibilities on directors to ensure their companies are not involved in bribery, holding them personally liable if they have in any way consented to the offence.
Claims against directors and officers are rising. Companies of all sizes are increasingly seen as targets for criticism, including mischievous allegations. Clients, employees and creditors are far more likely to take action nowadays against a company and its directors than in the past.
Regulators are taking a tougher stance across the globe and the risk of investigations and fines is increasing.
Legal expenses cover is not sufficient and should not be seen as an alternative to D&O, as limits are generally lower and provide for defence costs only rather than any damages awarded.
WHAT DOES D & O COVER?
A D&O policy will typically cover:
Three notable exclusions that are not usually covered within a D&O policy are:
For more information on D&O insurance please contact us.
As of 13 December 2014 any business that supplies unpackaged food will be required to provide allergy information. Whether you provide food to schools or care homes, run a supermarket, sandwich deli or restaurant, it will become mandatory to provide allergy information on food that is not already labelled. This could have an impact on your Public Liability and Employers’ Liability insurance.
With the new food law (Food Information Regulations EU1169/2011, which comes into force on 13 December 2014), all companies serving unpackaged food, or food that is packaged on site for immediate consumption, will have to clearly identify which of the dishes contain the EU Top 14 allergens.
People with food allergies have to be extremely careful about what they eat. Food labelling is therefore very important as potentially there can be serious consequences for customers eating food they are allergic to. Inadequate food labelling could result in your company being held liable in the event of a customer suffering loss or injury.
WHAT ARE MY RESPONSIBILITIES?
This new legislation reinforces the importance of having a robust procedure in place to ensure customers are aware which dishes contain allergens. Details of the Top 14 allergens will need to be listed clearly in an obvious place such as a menu, chalkboard or information pack prompting customers to ask if any of the dishes available contain allergens. While it is sufficient for staff to tell customers orally which dishes contain allergens ingredient information should also be available in writing if requested, for example in a central folder.
Businesses that have a transient menu will find this a greater challenge than those with more regular standardised offerings.
THE EU TOP 14 ALLERGENS
The new law will not require affected companies to take out a new Employers’ Liability or Public Liability policy, their existing cover will still be adequate.
However, in future insurers may ask for confirmation of (i) what unpackaged foods are being sold and (ii) how the business is ensuring compliance with this new legislation. An inability to show what procedures have been put in place may affect an insurer’s view of a business.
Food hygiene is paramount for all catering firms but these regulations re-emphasise the importance of food handling training for all staff. All staff who come in to contact with food need to fully understand the requirements of food allergic customers and how to prevent cross contamination.
There are other basic hygiene measures needing rigorous enforcement:
Ensure all food is stored so that ingredients from one dish cannot contaminate another. Staff must wash hands after handling each
dish and/ or wear a clean pair of hygiene gloves when handling a new dish stringent checks on the suppliers you source ingredients from should also form part of your management of this risk.
THE FINER DETAILS
If your business supplies unpackaged food and you are concerned about how this might affect your cover, please contact us.
Tel: 01626 332433
Fax: 01626 363432
September saw a business owner jailed for six years for burning down his showroom in a bid to fraudulently claim more than £2m from his insurer. The business owner was found guilty of insurance fraud and arson by a jury at Norwich Crown Court after he falsely claimed on his insurance policy following the fire.
The Association of British Insurers (ABI) estimates that fraud adds, on average, an extra £50 to the annual insurance bill for every UK policyholder. In 2013, insurers uncovered 119,000 dishonest claims worth nearly £1.3bn across all insurance products. The ABI estimates that an additional £2.1bn a year remains undetected.
Insurers invest at least £200m every year to identify fraud. In addition to improving their own anti-fraud systems, they fund industry initiatives such as:
THE INSURANCE FRAUD BUREAU
A not for profit body focused on the detection and prevention of organised fraud launched in July 2006. Since its launch there have been numerous arrests and tens of millions of pounds of savings for insurers and their customers as a result of its actions.
THE INSURANCE FRAUD ENFORCEMENT DEPARTMENT
A specialist police unit dedicated to prosecuting insurance fraudsters was launched, for England and Wales, in January 2012. In the first six months of operation, it received 318 referrals from 43 different insurers to investigate.
THE INSURANCE FRAUD REGISTER
An insurance industry database of known fraudsters launched in September 2012.
According to the ABI’s report on Insurance Fraud: “Reducing and deterring fraud remains a priority for the insurance industry. It is an on- going battle as the fraudsters continually look for new ways to de-fraud insurers and honest customers. The industry makes no apologies for its zero tolerance approach to weeding out the cheats. Honest customers expect nothing less.”