An article from BMRA service member Aston Lark
It’s no secret that the Covid-19 pandemic has significantly impacted businesses across the UK.
For many businesses, income and payroll budgets were reforecast several times during 2020, as the full impact and duration of the pandemic unfolded. The Government’s Coronavirus Job Retention Scheme has been a lifeline for many employers, and their staff, enabling businesses to keep employees on by using the furlough scheme rather than lose skills and long-term team members.
But what does that have to do with the cost of insurance?
Almost all UK businesses spend money on Employers Liability insurance. This is of course a statutory requirement, so it’s one of those covers that an organisation can’t operate without. Along with Public & Products Liability, most insurers use wage roll and turnover as the way to calculate premium for this cover.
These are normally estimated at the start of the insurance period, just before renewal. For many businesses renewing before the pandemic hit, these figures were probably massively overstated in hindsight. After all, who could have predicted where we are today?
So, for 2021, your business could be due an insurance premium rebate.
How does that work?
Some insurers have a clause in the policy which automatically makes the premium for Liability insurance adjustable. At the start of the year a business provides wage roll and turnover estimates. Once the insurance year is concluded, actual wage roll and turnover numbers are declared for the year. If the actuals are higher, then an additional premium is charged. But if the actuals are lower, you could be due an insurance premium rebate.
Where staff have been furloughed, some insurers are even allowing businesses to disregard furlough payments when making their declarations. This makes the potential for premium rebate even higher.
Will it apply to my business?
Not all policies are adjustable in this way, but some insurers have been flexible on giving return premiums as though their policies were adjustable during the pandemic period.
At Aston Lark we have seen many examples of premium rebates for clients over the last few months where businesses have not paid the wages or earned turnover that they expected during 2020, by taking advantage of declaration adjustments or by agreeing one-off return premiums.
For more information please get in touch with your usual Aston Lark contact, alternatively you can contact us on 020 7543 2800.