Mudiad Meithrin Members Important Information and Glossary of Terms

You are required to display the certificate for your employers’ liability policy in a prominent place and where your staff have access to it. Since October 2008, employers have been given the option to display certificates electronically, but if you choose this method, it’s important that your employees have reasonable access to it as part of their job.  Whether you display your certificate on the wall or electronically, it needs to be clearly listed in employee policies where they can locate it.

If the certificate is not on display or you refuse to show it to Health and Safety Executive inspectors when they request to see it, you can be fined £1,000 – a copy is available from the Mudiad Meithrin micro-site.

Since 1999 the insurance industry has operated a voluntary code of practice to search historical Employers Liability policy records to identify insurers of former employers to assist claimants in pursuing compensation for disease or injury caused at work.

In order to improve and enhance the information stored on the database, insurers are seeking to store additional data by way of a unique identifier for each employer. The unique identifier being used is the Employer Reference Number (ERN), commonly referred to as the Employer PAYE Reference.

To assist us in providing your insurer with this information, please make sure that you have provided your ERN reference for your company and any subsidiary companies.
 

The insurance by this item is limited to Your loss of Revenue due to: 

(a) reduction in Revenue; and 
(b) Increased Costs of Working.

The amount payable under this clause shall be: 

(i)    in respect of reduction in Revenue, the amount by which the Revenue during the Indemnity Period shall, in consequence of the Damage, fall short of the Standard Revenue
(ii)    in respect of Increased Costs of Working, the additional expenditure incurred for the sole purpose of avoiding or diminishing the reduction in Revenue which but for that expenditure would have taken place during the Indemnity Period in consequence of the Damage, but not exceeding the loss of Revenue thereby avoided

less any sum saved during the Indemnity Period in respect of such expenses and/or working costs as may cease or be reduced in consequence of the Damage, subject to the amount payable not exceeding the sum insured stated in the Schedule. 

However, if the sum insured by this item is less than the annual Revenue (proportionately increased where the Indemnity Period exceeds twelve months) the amount payable will be proportionately reduced. 

If during the Indemnity Period, Your Activities are conducted elsewhere than at the Premises, the money paid or payable in respect of such activities shall be taken into account in arriving at the Revenue during the Indemnity Period.

It is important that you regularly review the adequacy of your sums insured, indemnity periods and limits of indemnity (where applicable). Your sum insured needs to be adequate to either rebuild or replace as new your material assets (unless otherwise indicated within your policy documentation) or restore your business and gross profit or revenue or fees to the trading position you would have been in had the loss not occurred.

Buildings insurance

It’s critical to remember that the sum insured needs to represent the reinstatement or rebuild cost, not the market value of your building, including any driveways, garages, and outbuildings etc. The sum insured should include costs for materials, labour, architects, surveyors, other legal and professional fees, the cost of demolition and debris removal, VAT*, any public authority or planning costs and inflation, or other increasing costs that happen during the policy period as well as any rebuilding period.

*You should include VAT at the full rate if you cannot recover VAT. However, if you can recover VAT please seek the professional advice of your accountant before excluding VAT from your buildings sums insured as the position can be complex. Likewise, for residential properties please check with your accountant as to the extent of VAT that can be recovered.

The rebuild cost may be higher if you have a specialised property, such as a listed building, or other special features that may be more difficult, more costly, or take longer to rebuild or repair than a standard property.

We strongly recommend that you engage the services of a chartered building surveyor to provide you with appropriate reinstatement sums insured for your buildings at intervals of at least every five years.

Contents insurance

The sum insured should be set on the basis of the new replacement cost, not the value on your balance sheet. You should include allowance for debris removal, installation and delivery costs (with VAT included if you cannot recover VAT from HMRC).

An up-to-date inventory of all of your contents, machinery, plant etc, is useful when considering your sum insured. If you have customers’ goods on site, the value should be included too. If you have items of specialist or complex machinery or equipment it may be useful to discuss with a supplier the cost and availability of suitable similar replacements or repairs as these could take a long time to replace. If you have equipment that is no longer manufactured or available you might need to insure for the value of a new equivalent machine.
 
Stock insurance

The sum insured should be set on the basis of the maximum cost (at any one time) to buy the stock again from the supplier, including carriage and delivery. If you are a manufacturer then you should consider maximum costs of:

Raw materials – the market cost of materials, including costs such as freight, unloading, storage costs and irrecoverable taxes and duty

Work in progress – factor in the cost of raw materials and any manufacturing costs directly incurred, including direct factory overheads

Finished goods – the net manufacturing cost of finished goods. Or, for many businesses, the purchase cost, including expenses such as freight, unloading, storage and irrecoverable taxes. The sale price should not be used, unless specifically agreed with insurers.

Waste materials – certain waste materials will have a commercial value and a market rate

You should also include an allowance for the cost of stock debris removal and disposal.

Average

In the event of a claim, if sums insured are found to be inadequate, Insurers may apply average.

This means that the amount claimed under the policy will be reduced in proportion to the under-insurance, resulting in only part of your claim being settled.

As an example, if buildings are insured for £300,000, but the full reinstatement value of the buildings at the time of a loss is £400,000, a claim for a loss of say £100,000 for repairs to the building would result in a payment of only £75,000 – the calculation is as follows:

Note in respect of Sums Insured

Sums Insured shown are as agreed and set by Mudiad Meithrin Cyf on behalf of its Members. These are the standard Sums Insured and may have been increased by request and agreement for an individual Member. 
If at any point you wish to increase or query any of the covers, terms, conditions or Sums Insured, please contact Howden or Mudiad Meithrin.

"Buildings" means the buildings at the Premises used for Your Activities, including landlords fixtures and fittings, fixed glass forming part of the buildings, piping, ducting, cabling, wiring and associated control gear and accessories at the Premises and extending to the public mains, solar panels and wind turbines fixed to the building, tenants improvements, Outbuildings, walls, gates, fences, decking, lychgates, monuments, notice boards, nameplates, signs and fixed garden seating, paths, drives, car parks and other paved or hardstanding areas, swimming pools, fixed outdoor adventure and playground equipment, artificial playing surfaces, inspection covers, fixed lighting, storage tanks, plant or equipment external to the building(s), external defibrillators in lockable containers all belonging to You or for which You are responsible.

Certain parts of this policy are written on a "claims made" wording, such as Professional Indemnity, Legal Expenses, Cyber Liability, Employee Dishonesty, Charity Trustees Liability, Organisational Legal Liability and Employment Practices Liability; which means that the cover will respond on the policy in place when the claim is made, not the policy in place when the incident occurred. Unlike other forms of insurance, there has to be a policy in force at the time at which the claim is made against you and at the time the activity was undertaken. Once a policy is cancelled, expires or lapses no cover would be provided for any claim notified after the date of cancellation, expiry or lapse.