Directors liability insurance – protection from disgruntled shareholders

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It is easier for shareholders to claim against directors for negligence and breach of directors’ duties.

The Companies Act extends shareholders’ current rights to sue directors for wrongs done to the company. From October 2007,  shareholders have been able to sue directors for negligence even where the director concerned has not benefited from his negligence.

They will, however, need the court’s permission to do so, and the courts have the power to speedily dismiss unmeritorious claims.

Changes in the law affecting directors’ liability

Companies may, going forward, bring more claims against their directors. The Companies Act 2006 has set out directors’ duties to the company. A director must act in a way which he considers, in good faith, would be most likely to promote the success of the company. In doing so, he must have regard to the following:

  • the likely long term consequences of any decision
  • the interests of employees
  • the need to foster relationships with suppliers, customers and others
  • the impact of the company’s operations on the community and environment
  • the desirability of the company maintaining a reputation for high standards of business conduct

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Motor Trade Insurance protects mechanic from dozy apprentice

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Imagine the scene; you’re a small back street garage repairing and maintaining  all manner of everyday cars, when in comes a Subaru Impreza STI, just needing a service and an check over. The loving owner has heard how good you are from work and is entrusting his pride and joy to you.

Great! The new apprentice thinks it’s Christmas and begs you to allow him to help with the service. Well, he has been in early all week to help with a backlog of jobs and anyhow, the kid is always keen to help.

Two hours in and the service is completed: the car just needs a road test to check everything is ok. The apprentice jumps at the chance, and after all he is only going around the block – what could happen?

Jumping into the seat, our excited apprentice sets off, you turn to go into the office to make out the customer’s bill, when you hear a loud bang. With the apprentices inexperience in performance car driving, he has just piled into a parked car.

6k in damage. Luckily covered by your motor trade insurance. Motor trade insurance may not protect you from a red face when explaining what happened to the customer’s car, but at least you can rectify the situation without being out of pocket.

You never know, you may even see the funny side one day!

Motor trade insurance keeping motor traders in business

Insurance ‘just in case’

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Insurance is something that you buy ‘just in case.’

If you buy insurance, you are paying to protect something of yours, just in case anything goes wrong.

a broken washing machine

Sometimes bad things can happen to something you own.

Like in a fire or a flood or an accident. Or like something being lost or stolen or hurt.

a man at a washing machine shop

If you have insurance, you can get money to put things right or to replace what has been lost or damaged.

pound signs in an arrow pointing towards an insurance company building

To have insurance, or ‘cover’, means you pay an amount of money to an insurance company.

a man with his thumb turned up and a tick

You can buy insurance to protect lots of things. But you have to have the right insurance to protect what you have. It is important to buy the insurance you need.

money being thrown into a bin with a cross

But you must not buy insurance you don’t need. That is just a waste of money and it won’t help you if anything goes wrong. BUYER BEWARE IF YOU HAVE A CRIMINAL CONVICTION, POOR CLAIMS OR CREDIT HISTORY OR HAD ISSUES WITH INSURERS BEFORE

Subsidence risk insurance critical

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We have all seen the effects of freeze and thaw on road surfaces, with cracks, potholes, sunken drain and manhole covers.  At each successive freeze and thaw water penetrates into cracks and faults, freezes and expands and causes more damage at each phase.  The behaviour of water in the ground around our properties is key whether in winter, spring, summer or autumn.

The Daily Telegraph of 24 February 2010 page 7 reports on a substantial cliff fall at Oddicombe Beach in Torquay, affecting a property called Ridgemont House, which overlooks the beach and sits on top of unstable sandstone cliffs.  Apparently a rock, described as the size of a transit van, fell in the night causing a substantial part of the 300 foot cliff to collapse.  The substantial house, built late 1930s, was sold last year for £123,000 and last week for £154,000.  Elsewhere, such a property may be valued at £1.5 million.  The utilities to the house were cut off 10 years ago following another cliff fall.  The property stands on a fault line, so planning for any demolition and rebuild on the land further from the clifftop may be difficult as sinking the usual foundations may not be allowed.  There may be the possibility of a rebuild using ‘Raft’ method foundations.

It is unlikely that there is any insurance in operation for the owner in such circumstances.

Building insurance policies normally cover damage caused to a property by subsidence, heave or landslip.  If there has been a change of insurer and such damage has been found, any claim may involve the Association of British Insurers’ Domestic Subsidence Claims Handling Agreement,  to which the majority of household insurers subscribe.  This Agreement determines claims handling.  A claim made within eight weeks of changeover is handled by the previous insurer. For eight weeks to one year, the claim is handled by the new insurer with costs shared equally between the new and previous insurer.  At over one year, the new insurer is responsible.

New Beginnings but No Flood Protection.

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The decision to move from a peaceful steel city to Rothbury, a beautiful rural oasis, had finally been sealed. A cash offer on our home meant we were one step closer to our dream, and within a couple of weeks, we were gazing out of our windows at the magnificent views of the Simonside hills and the sloping banks of the River Coquet.

Practicalities were forgotten; for a few days as we absorbed our new environment until, over a coffee in the village, I heard the mention of ‘flooding’ and the realisation of the implications of living so close the river hit me. Suddenly, the priority was to ensure our new home was protected against such natural disasters, and we endeavoured to gain home insurance.

That is where the nightmare began. Though the Association of British Insurers (ABI) have assured property owners in flood areas with existing insurance cover that their insurer is likely to continue providing cover, What is failing to happen is that those moving into flood affected areas are either being refused insurance altogether, or are being charged inordinate amounts in excesses. Three solid days were spent trying to obtain house flood insurance but to no avail.

Discussion with neighbours confirmed our situation was not unique. By the fourth day, after being informed we were living in the highest risk flood zone, we began to fear the worst: our property was uninsurable. We were devastated.

We shared our major concerns with anyone who would listen; word of mouth is a very strong tool. Out of the blue, we received an email from an insurance broker; Neil Cook, Head of Specialist Risks with Equity and General Insurance Services. I read with disbelief and a huge sense of relief: ‘Dear Dawn, I was asked by UK Flood Barriers to help you get cover. Kindly call me.’ Within days, not only were we given a very reasonable quote with full flood cover (at the sight of a letter confirming flood defences in place on our property), but the policy being offered to us had a nil excess on flood claims. Alleluia! Peace of mind really is priceless, and we cannot thank Mr Cook enough for coming through to us

Now we are relaxing and enjoying our tranquil new home, which is just how it should be! Mrs D Ashby

If like Mrs Ashby, you have a property in a flood risk area and are looking for a competitive quote for home insurance, click here.



UK Commercial Property under insured

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80% of commercial buildings are under insured

When it comes to let property insurance for landlords, the devil is in the details. By taking time to carefully consider your needs, however, you can ensure that your landlords insurance does what it’s supposed to: Be your guardian angel.

Under insurance is a common problem in the UK commercial property market, with many landlords simply having no idea of the level of insurance cover they require. The British Insurance Brokers Association issues regular warnings about under insurance, yet few landlords appear to be heeding its advice.

Alistair Steward, risk solutions director at Cunningham Lindsey, which offers a calculation service for British Insurers Brokers’ Association members, says:  “Underinsurance applies to over 80% of the properties we value, with an average amount of underinsurance on commercial buildings around £150,000.”

Property priceshave fallen and if the surveys by the Halifax and the Nationwide are anything to go by, house prices will end this year between 15% and 20% lower than they started – easily the biggest annual slump on record.  With about £30,000 knocked off the selling price of the average house in the past year, why are landlords finding themselves under insured? Well; although property prices have and continued to fall, repair and renovation costs have continued to rise.

The hidden costs of rebuilding covered by landlords insurance

  • Clearing the site
  • Surveyor costs
  • Architect costs
  • The cost of building the property to its original state
  • Complying with government and local authority requirements

Remember insurers will only pay as much as the building is insured for, so failure to insure for a sufficient amount could result in expensive costs if a claim should arise

Calculating the rebuild cost of a property

The cost of rebuilding the property will not be the same as the market value. Surveyors and insurers have some rules of thumb to help you work out what your property is actually worth, to be absolutely sure you should get a surveyor’s report.

If you are buying a property to let, the lender’s valuation report will also contain a rebuilding cost figure.

Broadly speaking to work out your rebuilding cost, you should know the building dimensions which can be calculated by multiplying the length and width of the property in feet by the number of storeys.

How to calculate rebuild costs

A. Calculate the ground floor area. (ground floor area = Length x Width)

B. Calculate the total floor area. (total floor area = Ground floor area x Number of storeys)

C. Calculate the total rebuilding cost. (Total rebuilding cost = Total floor area x Rebuilding cost per square foot)

The cost per square foot will vary depending on where in the U.K. you live.

You can calculate your re-build cost online, visit the ABI (Association of British Insurers) website by clicking here

Landlords urged to check insurance

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You would normally check any major purchase is fit for your particular needs before handing over your hard earned cash, so why not do the same with insurance? Don’t just rely on what the call centre staff tell you. Your trust in the broker on the other end of a phone call may cost you dearly.

Insurance is a contract on mutual trust; when insurance began it was not possible to communicate in the same time frame as we do now – the phone and net being almost instant- so even the most basic letter could take weeks, if not months to reach the receiver. This is where the trust element was brought in by the brokers. But today, any errors can be amended with minimal time and fuss. The key is to check your policy with a ‘fine tooth comb’ before signing anything.

If you are in the slightest bit concerned about any part of the policy, put it in writing to the insurer and keep copies for future reference; your broker should take them into consideration when creating your renewal. I had a client on the phone the other day who took out a policy with a high street broker; unknown to himself, they sold out to a much bigger firm, which often occurs in the industry.  He received his renewal, which seemed fine upon first inspection; but then he read the small print.

The issues with the Landlords Insurance he had advised years ago were not recorded, let alone amended in his renewal. Thankfully, he did not assume and rang his insurer to check; he was told they would no longer help him! He doubled checked he was about to pay his premium and spend a tidy sum on worthless cover, which saved him money, and the hell he would go through, should he attempt to claim, and find he isn’t covered.

Retro chic drives Motor Trade

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The fantastic new Fiat 500 has been a massive success for Fiat with cute retro styling appealing to young and old alike. With a new Fiat 500 costing anything from £9,000 upward, a quick look in the classic car press could see drivers in a tax exempt original 500 for just £5,000. At almost half the price of a new 500 if well looked after your original 500 is likely to be worth what you paid for it three years later.

A spokesman commented
“Depreciation and tax free motoring for pre 1973 cars can be a significant saving to motorists looking for cheap alternative to bland boxes on wheels”

Motor Trade sees classic business rise

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Popular modifications by classic car owners including carburettor and gearbox swaps may require owners to pay £450 for a rigorous safety test by the DVLA. Known as the Basic Individual Vehicle Approval (BIVA) failure to comply can result in the cancellation of V5 documentation and an order for the vehicle to be removed from the road.

Renewed interest in older vehicles has increased as road tax exemption and inexpensive classic car insurance leads many motorists to consider an older car as a second vehicle or a more interesting alternative to newer blander designed vehicles.

Modification of modern classics to improve performance, economy and comfort while retaining the tax and insurance advantages of classic car motoring is providing motor trades with a potential new and loyal customer base.

Classic car owner’s traditional DIY attitude to servicing is fast declining as more stringent MOT’s drive owners to seek professional help to keep them on the road.

Flat Insurance- are your contents fully covered?

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When you buy a flat or apartment you may spend a small fortune turning what are in essence bare walls into your ideal home. Decoration to your personal tastes, adding artwork to the walls, fitted bedrooms, bathrooms or kitchens. These creature comforts can run into hundreds or even millions of pounds.

Although flat and apartment tenants and owners often pay a contribution towards part of the block insurance it only covers the bricks and mortar of the original building and other works such as new bathrooms are not part of that. Nor will your contents cover work as they are not move able objects like normal furnishings, you might take the curtains or sofas etc with you when you move but not a fitted kitchen and the like

Many people today are opting to upgrade contents insurance policy to cover the improvements in a single flat or add on policy for blocks of flats.