A good few years ago, the Independent Insurance Company ran into financial difficulties, collapsed and left thousands of policyholders without cover, immediately. Many in the industry believed the business model was flawed and anticipated this outcome. Decades before, the Vehicle and General Insurance Company also collapsed. The Motor Insurers Bureau was formed by Motor Insurers to deal with future collapses and other common interests within the general insurance industry, dealing with motor insurance.
It was hoped that such a business failure would not reoccur, however news is breaking that a major insurer in Southern Ireland (Eire) has been placed in Administration. The independent insurer – Quinn, which specialised in Contractors’ Liability Insurance and Motor Insurance is now apparently in Administration, leaving a significant element of the construction trade in difficulties as they cannot trade without Employers’ Liability insurance cover in place.
The government may need to step in as building projects in Ireland and Great Britain could be affected. It is rumoured that the business was overstretched through premiums competition resulting in too low premium income against liabilities.
Currently, it is not clear how the Administration will operate fully in the short term. It is known that no policy will be offered renewal and recent quotations will not be honoured. At what point current insurance cover will cease is yet to be announced. Under the usual terms of Administration there are set rules on priority of payments from any assets.
There are insurance brokers and insurers who have the experience and knowledge to deal with situations such as these. Whether preparatory for forthcoming renewals or for replacement cover, specialist Lloyd’s of London markets are available for effective, fast solutions. Undoubtedly, there are some who will get caught in the backlog that such chaos can cause.