In our blog this week we take a look at a case study from our member, GS Group, and understand how they undertook a review of insurances for a business who specialises in hardware technology with the aim of re-designing the programme to allow the addition of policy covers like Management Liability, Professional Indemnity and Cyber.
GS Group Approach
Following a full review of the existing policy covers we identified that the programme required to be extended to not only provide the additional covers mentioned earlier but to enhance the Business Interruption and Public/Products aspect. We did this by carrying out a full review on the basis that if the business was to be involved in a total loss how quickly could they become operational again. Through this exercise we established that 24 months Business Interruption cover would be required and that an increase in sums insured by almost 80% was necessary.
The policy was enhanced by adding Professional Indemnity, a cover which was not previously in place and we felt the addition of this would provide protection for the small amount of design work which goes into the manufacturing of the technology – interestingly confirmation of this cover was requested from a recently won blue chip business client of the Insured. The final extension added to the Professional Indemnity policy was Intellectual Property cover. This is because the business is quite unique, and in our experience very few companies in this area, have the speciality both in experience and infrastructure to provide the type of hardware our client provides. We felt having some protection in place to protect against this would be of real value to our client.
We further extended the policy by adding in Management Liability. The UK market has seen a sharp increase in claims and even with the increase in prices and with reducing capacity the purchase of this policy, in our view, was vital. Claims can go against Managers as well as Directors and therefore the extension to protect managers against the consequences of actual alleged or ‘wrongful acts’ is essential.
The final extension added was Cyber Liability. We carried out a review from a Business Interruption perspective on claims made against any business for interruption following a Cyber-attack and advised that these claims are not covered under any Property/Business Interruption policy. Following a review of our client’s processes it was established that a Cyber-attack taking down the system/operational side of the business would result, even for a single day, in a sizable impact from both a loss of profits and reputational aspect. Through the re-designed policy which we created with our insurer partner we have managed to extend cover to include full System Business Interruption cover and the extension of third-party Cyber claims like Ransomware and Social Engineering.
This policy and cover review has highlighted that many companies in this sector would benefit from the introduction of policy extensions such as Management Liability, Professional Indemnity and Cyber to ensure adequate cover is in place.