Webinar: Commercial fire risks – an insurer’s view

Tracy Seward  00:04

Hello everyone and welcome to the Praxis42 webinar. Today we’re going to be talking about commercial fire risks and insurance view. I’m Tracy at Praxis42 and today I’m joined by our expert panellists Adam Clarke, MD of consulting at Praxis 42. Adam has a background in occupational health and safety for over 15 years, working with his clients to understand their challenges and then support them in understanding their compliance needs, and tailoring bespoke solutions to fit. We’re also joined by Simon Radcliffe, commercial property and liability underwriting manager at Hiscox. Simon has over 25 years experience in the insurance industry, having worked for Hiscox for the last 15 years. So just some housekeeping before we start the webinar, your mics will be muted. But there are buttons at the top of your screen where you can join the chat or ask questions, which will be addressed in the q&a session at the end of the webinar, we will also have some downloads related to the event that we will send to you following the webinar. And you’ll be able to share the event on social media. We already had some questions into the q&a. But if you do want to send in a question during the webinar, we will do our best to get to it. And any that we don’t have time to answer today will be answered and put up onto our resources pages after today’s session. And the recorded version of the webinar will also be available after the event and a link sent out to everyone who signed up. So over to New Adam.

Adam Clarke  01:33

Thank you. Thank you, Tracy. And welcome Simon. So we’re really fortunate today to have to have Simon as a guest to give us a an insurance perspective on all things to do with fire risk. So what we’re looking to do here is just to run through what a commercial underwriter will be considering when determining whether they personally want to underwrite risk. And secondly, factors may affect premiums. So we’re going to run through some essential controls, protection measures, inception and development hazards and construction methods. And As Tracy mentioned, if you have any questions as you go along, please fire those away at us. If we get the chance. During the session, we’ll answer them and if not, we’ll pick them up afterwards. So next slide, please, Maria. Great stuff. So Simon, over to you if you can just give us a bit of an explanation around how you look at fire risk. And really, what’s the starting point for you when assessing whether you want to take on a new client?

Simon Ratcliff 02:34

Sure. So I mean, fire is obviously one of the primary considerations of any kind of commercial underwriter when they’re when they’re looking at a property exposure and property risk will they want to take it on, and how they want to price for that exposure. They’re a little bit out of date now, but just to give you a feel for why it’s so important. I mean, in the year, the run up to March 2021, UK, fire and rescue services attended over half a million incidents, of which more than 150,000 of those were fires. And the average response time for fire and rescue services is about eight and a half minutes, that that was going up, but that seems to have plateaued at the moment. So it’s it’s quite important therefore that in the event of a fire breaking out that action is taken, you know, swiftly and efficiently to minimise and mitigate any potential damage and of course, any potential injury or loss of life. So from you know, from an insurance perspective, you know, the first absolute bare minimum, when we start to look at is really kind of who is the insured? We’re looking for, you know, responsible insured’s who take risks seriously. So, you know, while we appreciate that within the non domestic premises, you know, the person responsible for fire safety can vary quite a bit, could be the employer, the owner or landlord the occupier for example, you know, we do expect that that responsible person is going to have carried out fire risk assessments in the premises. And that those assessments are reviewed regularly. We’d expect them to make sure that staff or the representatives are told about the risks that have been identified. And we’d expect fire safety measures to be in place that you need to plan for an emergency and make sure the staff have got all these sort of instructions and training they need to deal with it. Now, obviously, for slightly larger businesses, so that means for more than five people or more, a written record of fire risk assessments is a minimum legal requirement, basically. So we’re looking for that as an absolute bare minimum, a written risk assessment that’s identified the fire hazards, the people at risk, how they’re going to evacuate, and remove or reduce the risks, and obviously, to have an emergency plan and training in place. And then the next thing we’re probably looking at is, you know, an appropriate fire detection and warning system in place. So you know, We’d expect that to be professionally installed, maintained, etc. And, and, and you know, to make sure that fire alarm systems emergency lighting etc are working properly, fire exit signs are in the right place escape routes to clear the floors in a good condition that all fire escapes can be opened easily. And automatic fire doors were closed correctly. And so you know, that’s essential really, because, you know, any faults in the systems or equipment have got to be identified as soon as possible because these things have got to work in the event of fire breaking out in the premises. So I guess to summarise, you know, as a minimum, we expect to have a responsible person in place, who follows some basic risk control measures in terms of a fire risk assessment, fire extinguishers and alarm. And then would also extend to things like making sure that the electrical installation is checked every three to five years, portable appliances are tested, and they’re just general good housekeeping is maintained. So that means keeping combustible waste well away from the premises wherever possible.

Adam Clarke  06:04

So you’ve just given them quite a long list of measures that you’d expect to be in place as a minimum. Now, if you’re gonna go and do the assurance piece on that ahead of deciding if you want to take on that risk or not, how much effort would you be putting into actually determining whether those those minimum standards are in place? Would you do? Would you go with a one size fits all approach? Or would you do more checking if it’s the, you know, for example, a much larger estate that you’re going to be underwriting?

Simon Ratcliff 06:33

No, I mean, fundamentally, the amount of underwriting that we do on any risk is driven by a couple of things primarily. So one is the nature of the trade. What is what is the premise is being used for what’s what’s being carried out there? What’s going on? So you know, if it was something relatively benign, you know, an office risk where, okay, you might have a lot of electrical equipment, but in terms of trade processes, there’s not much going on, that’s gonna keep insurance awake at night. So that’s one of the primary considerations. And then the other is obviously what, you know, what’s the actual quantum of our exposure? Because, you know, I’m going to look at a 20 million pound hospitality venue, you know, with an awful lot greater scrutiny than than I would consider, say, a half a million rebuilt, office premises, you know, so for those larger property risks, you know, that’s, well, I’m going to start to ask a few more questions. So I’m going to start saying, Okay, what’s the distance to the nearest full time fire service? Or fire hydrants? You know, what is fire brigade site accessibility look like? And one of the key things for me as well is, you know, have you got automatic fire detection, we’ll come on to that in a second. But, you know, in addition to the usual kind of fire doors, fire shutters, emergency response plan, etc. As the risk sort of gets bigger, and under a more sort of hazardous activities being carried out there, that’s when I’m going to start to ask more questions, and, and the bar is going to be raised in terms of what I expect the minimum standards.

Adam Clarke 08:06

That’s great. Thank you. Let’s move the next slide. Yeah,

Simon Ratcliff 08:14

I mean, I think, you know, so these are some of the things that we’re just talking about there in terms of, you know, Pat testing, you know, combustible waste kept well, and go well away from the premises, I mean, you know, these are, these are relatively easy, simple, cheap things that, you know, a risk of were insured, I would, I would expect to be to be carrying out and most of this stuff really is just complying with regulatory requirements in terms of things like Pat testing, electrical installation, inspections, etc, etc. So it’s not like I’m asking for something there that’s above the normal, or unusual, but, you know, I would expect someone who’s the, you know, the responsible person in the business to be able to tell me, you know, when these things were last carried out, to put my mind at ease, but I said that the big one for me is probably in terms of going if you want to take it to the next step. So you want you want your commercial insurer to to look upon your risk more favourable than the than the average. Probably the obvious one for me is going to be around the sort of fire alarm you’ve got in place, which I think we will look at on the next slide, actually. So yeah, fire alarms, fire extinguishers, these are all some of the some of the types of fire protections that we you know, we would expect to be in place I think it’s worth saying here some of the stuff that that that I put on this slide. Insurance, don’t expect every VISTA have all of this stuff, right. I mean, you know, things like fire suppression systems. You know, I’m only going to be asking about stuff like that if I know that there’s, you know, an industrial cooking range in the premises. So if I’m insuring, you know, a builder hospitality venue arrest straw or something like that. Same with things like automatic cut off switches and stuff, you know, these are these are very specific to sort of the inception hazards, ie, the thing that’s going to start the fire for specific traits. So you know, if you’ve got a lot of cooking, frying, etc going on, then you know, these are the areas that approved an underwriter is going to want to drill, drill down on things like fire alarms, fire extinguishers, fire blankets, these perhaps a bit more generic because the sort of thing that we might expect most businesses to have in place.

Adam Clarke  10:36

So given the measures that you’ve kind of described, they’re essential for, for detection and raising alarm, what are the kind of common causes of buyers that that you see and end up having to pay out on? Do they have these measures and measures in place? Or is it more commonly, organisations that haven’t got those measures in place,

Simon Ratcliff 10:56

but for me, it’s, it’s about the response time, generally. That that is one of the main things I’m going to be looking at. Because if I’m ensuring a 20 million pound building offer, underwriters will look at a risk on what’s known as like an EML and NLO basis. So what that what that stands for is estimated maximum loss, and most likely outcome. So what you’re looking at there is, in a typical scenario, with an average response time from a fire service, house significant a loss do we think, is going to engage. So in terms of what actually where we see, you know, the freedom that had the highest frequency of losses, though, you know, while while I sort of did talk earlier about sort of more hazardous activities going on, so you’d think that obviously, you know, a building where someone’s carrying out welding every day with, you know, various, you know, oxy acetylene welding bits of equipment, or lying around the place, you know, it’s far more likely to have a fire in it. But in actual fact, you know, the most common reasons that fire start are often electrical faults are awesome, typically. And that’s why it’s not just about fire protections, it’s often about the, the physical intrude or security that exists on the premises as well, which I think we touched upon a little bit later on it. So I won’t talk too much on that for now. Great, thank you, in terms of, in terms of fire alarms, I said, you know, speed and speed of responses, is, is is key for insurance. You know, at the end of the day, if we’ve got, if we’ve got a large property exposure, you know, in the millions of pounds or 10s of millions of pounds, you know, we want to make damn sure as possible that, you know, in the event of fire breaking out, that there is going to be some sort of response on site relatively promptly, you know, to minimise our loss, you know, we don’t expect, you know, we certainly hope that fire losses won’t be total losses in most scenarios. And, and the regulations around this are a little bit a little bit wheeling, in the sense that sort of, currently, status sort of all business premises must have an appropriate fire detection system in place, which isn’t really terribly good guidance for business owners is, you know, an appropriate fire detection system. I mean, it’s so broad. You know, and if you if you’re running a small newsagent, you know, an appropriate fire detection system is probably just someone shouting fire. But, you know, in a larger or more hazardous commercial risk, you know, it’s likely that we’re going to really look upon risks much more favourably if they’ve got some sort of automatic operation, fire alarm. And, and by that, I mean, you know, something that doesn’t actually require a person witnessing a fire to operate, you know, that’s going to give you the earliest detection, and it gives you 24/7 coverage, basically. And that comes in the form of smoke, heat, or visual or eye witness triggers, because manual triggers remain available on automatic systems. And, and it’s commonplace that these sorts of more advanced fire detection systems will work on the same phone lines as theft detection. So for example, BTS, red care system, and these alarms designed to respond in a variety and a combination of ways. And that’s what I’ve tried to show in some of the images on this slide here. So you’ve got, you know, something that sounds an alarm in the premises. But then you’ve also suddenly got something that sends a message to an alarm receiving centre, and that’s calling the fire department directly. It might be linked up to a sprinkler system, for example, or it might be designed to, you know, open fire escape doors, cutting power to certain lights or lifts or and kicking emergency lighting in as well. So some of these systems could be quite sophistic. gaited and do all manner of, of different things. So, you know, I think it’s important, if you’re, if you’re looking for favourable terms from from your insurer, you know, it’s important to understand, you know, is the fire alarm system, you’ve got kind of up to scratch, and, you know, would they would they maybe give you a discount, or even for larger risks or risk, bursary to help you instal, you know, something a bit more sophisticated. I mean, there were, there are quite a lot of different categories of alarm system, we ain’t got time to go into all of that here. But you know, there’s this, it’s worth understanding what category system you’ve got, and what that means in terms of the level of defence.

Adam Clarke  15:43

So if we’re looking then at, you know, a building that has got a system linked to the receiving centre, when you’re, when you’re looking at that particular risk, that’s something that’s going to help, you know, help you in your mitigation, when you’re looking at what what the cost of this is going to is going to be. So where we were, we talked at the start of the conversation about minimum standards, we’re now getting into, we’re moving from minimum to good to actually, you know, above above average.

Simon Ratcliff 16:11

Exactly, exactly that but again, it depends on that level, and size of the exposure. So for a relatively small to medium sized business, and property risk. That sort of level of automatic fire detection might be the sort of thing that lifts you from from average into good and and get you a better rate from your underwriter. Basically, he’s going to he’s going to try and he’s going to compete harder to make sure that he wins that business, because he’s going to identify you as a, as a better than average fire risk. And he’s going to want to make sure that he wins your business rather than a another insurer down the road. So that stage, you know, it’s going to be helping you in terms of controlling your premium. But for a larger risk, that might be the difference between the underwriter simply accepting the risk, or not accepting the risk. I mean, there are certainly some larger exposures, you know, that I’ve looked at, recently, where I basically said, you know, you either you either improve your, your fire detection system, or we don’t cover you, you know, it’s like, and, and again, you know, I’ll be flexible around, if a customer is prepared to work with this, you know, I’m normally happy to allow, you know, a period of time within the policy to say, okay, you know, you’ve got 3060 90 days, whatever it might require, to get a system upgraded. And for that, you know, we’ll, we’ll hold cover on that fire risk in the meantime, and we’ll allow you that period to, to get it fitted, or get it upgraded, or whatever needs doing. So, you know, insurers will, would normally try and, and work with, with insurance, you know, when when the insurer does, is collaborating, and is showing a desire to improve their risk, you know, to help us and help them. But sometimes these things might come back from a survey report. So this is the other thing probably just to mention as well is that, you know, for larger, more complex commercial risks, insurers will often make a cover subject to a risk survey being carried out. And what that’s basically saying is, look, we’ll put you on cover, but we actually want to have a bit closer look at your premises, we will send someone out to come and have a walk around the place and talk to you about your business and go through some of this stuff in a bit more detail. Because we’re not going to get through that level of detail before we’re in a position to, to sort of decide where to put your cover. So we’re happy to put you on cover, but we’re going to carry out a survey, maybe within the first 30 days of going on risk. So customers should be aware, then at that point as well, that you know, there is still an onus on them. Because the surveyor might come out and say, well, actually, that system is not up to scratch that systems are up to scratch, you haven’t maintained that it hasn’t been inspected in the last 12 months. So you know, that’s when you start getting risk improvement requirements set out by your insurer. And normally they will set out timescales within which you got to carry those risk improvements out now. And if you don’t, you’re you’re in danger of prejudicing your cover. So, you know, you don’t want it to get to that stage, ideally, where you’re running out of time because the insurer surveyed it and told you that you’ve got to do X, Y and Zed within 30 days. Or if you don’t, you’re going to come off cover because no one wants to be in a position where they’re having to explain to the next insurer over the previous insurer came off came off the risk.

Adam Clarke  19:54

That’s a really good point. And you mentioned there about there are times when you do decide whether or not you actually want to insure. So how was the housing organisation? Do you kind of set out your your framework around what what you’ve got appetite to now I recognise that there’s going to be circumstantial depending on everything that you look at, it’s going to have different different specifics. But if you’ve got a team of people there that are looking at it, so how does that? Or how, how has that changed over time? How do you kind of look at that, when you’re making your decisions?

Simon Ratcliff 20:27

So Hiscox is a slight is probably quite a niche insurer, I guess, in that, you know, we’re not, we’re not a generalist insurer, like, like an AXA or an Aviva, for example, who will probably try and put a quote, or against most business risks, you know, we see ourselves as tend to focus on certain sectors that we know and we understand, and we know that our products respond well. And we know that our underwriters have good knowledge in those sectors. So we don’t try and be too generalist about it, I guess, is, is the first thing. So just to give you a bit of a field, you know, we’re, we’re, we’re quite a big player in, for example, office insurance or retail for shop insurance, we also write a lot of education and charity risks. And, and we also do a lot of technology and media risks. Beyond notice that I’m not mentioning things like, you know, big warehouses and factories and production lines, and those types of those types of businesses, because that’s not our bag. So, so I think, firstly, it’s just about us being clear to customers in terms of like, you know, whether we think you’re a good fit for us. And when I say customers, that means both direct customers, and indeed, our brokers, because we Hiscox through an insurer that operates in both sort of distribution spheres there we have, we have a broking SEC distribution, and we and we have a direct distribution online as well. So I think we just tried to be clear to customers in terms of like, your, our type of customer. The other thing is, often, and this is something that customers don’t always appreciate, oh, why won’t my insurer accommodate this XYZ, they’re not being very flexible, etc, etc. And, but often, our hands are tied, even as an insurer, you know, as as insurers, we buy insurance as well. So we, you know, we have a reinsurance programme in place. And that reinsurance programme, is largely to protect volatility on our book. So what I mean by that is that what we generally buy something from his concert insurance perspective is, is what’s called excessive loss. reinsurance. So that means that once losses go above a certain threshold, that claim is shared with reinsurance, so we would settle the claim, but then we are able to claim back ourselves from our own reinsurance. And what we found, certainly through the through the last couple of reinsurance cycles. So, for those of you not familiar with the industry, but a lot of reinsurance runs on a calendar year basis, and we’ve literally just just renewed a lot of our our reinsurance programme from the first to January. And, you know, I don’t mind admitting that, you know, there were some tough negotiations with with reinsurance this year, and property risks was particularly one of the sectors where, you know, reinsurers are, are, you know, wanting to put rate up, and also rein in some of the some of the sort of the more wayward types of exposure that we might have on our books. So, you know, we have to make sure that, you know, our underwriting appetite, is something that our reinsurers want to continue to participate in, as well. So, so that very much sets the agenda for us. And then, you know, the final bit is, obviously, we’re looking at our own claims experience. So I mean, I hold regular sessions with our heads of claims department, both property and liability claims. And we will use those sessions, you know, to look at recent large losses, so new notifications that have come in so Hi, have an understanding of, of any significant developments, new claims that we’ve been told about or even large movements on existing claims, because, of course, some claims can take months, if not years, to settle, particularly in the liability sector, more so than property. But so that’s one of the areas that we’re looking at, but we’re also talking to claims and sort of saying that, you know, you need to help us trend spot here. What are you starting to see come through that you didn’t see six months ago, 12 months ago, 24 months ago? And do those patterns mean that we need to adjust our underwriting appetite so so those are the those are the things I think it’s about having have a clearly defined appetite and the writing appetite in the first instance. So customers know where they stand with you making sure that your reinsurers are on board with what you’re writing, and then making sure that you’re talking to your claims people as regularly as possible.

Adam Clarke  25:15

Thanks, Simon. That’s really, really important. What if just one one last question just related to that, then? So we’ve we’ve talked about the issue of the insurer asking lots of questions to get an understanding of how things are being managed. But as as a business organisation seeking new insurance, if you’re not being asked about specific measures that you might have in place that maybe the insurer isn’t expecting you to have. Is that something that you should be shouting about? When you’re going through that process? If there might be an option to get some some further discount?

Simon Ratcliff 25:46

I would, I would say so. I mean, generally, it depends on the size of your premium the size of your risk, and how you’re transacting. I mean, obviously, a lot of our as I mentioned earlier, we you know, we’ve got both a direct distribution arm and a broken distribution arm. Now, typically, the sorts of customers that come to us direct, tend to be very micro business. And so we’re talking 12345, man band type businesses, typically, they’re the sort of people that will come to us direct. And generally, they’re the rules, the underwriting rules, if you like, what I said, some sort of fit in or fall out. So you either get through our questions, and you say, yes, yes, no, no, yes, yes, no claims. Thank you very much. Here’s your quote. And that’s a much more straightforward portfolio approach to underwriting where you know, it’s an algorithm is basically letting you through and generating a premium for you. And there’s probably not an awful lot of room for negotiation on that, because the whole setup is designed to be slick online. Here it is, take it or leave. For larger risks, I probably expect there to be a broker involved. And it’s those more broken distribution type risks, that there is more of that kind of negotiation and conversation going on. So if we haven’t asked you a specific question, or your broker has asked you a specific question, but you’ve got something that you think, you know, makes your risk better than the guy next door, you should absolutely be volunteering that as well. Because, you know, a, it might just, you know, a light bulb might go in and the underwriters head and go, well, actually, this is a bit better than I thought maybe I will sharpen my pencil and make sure that my quotes a little bit keener than it otherwise might have been. Plus, it’s just demonstrating that as a customer, you’re thinking about risk and how to manage it, which just genuinely makes you a more attractive insured. Thank you. This, this slide we popped in, and this is an interesting one. I mean, this is really a for info slide. So I think a lot of people talked about fire alarms and how, you know, really good fire alarm, you know, might be the difference between an insurer wanting to quote for your business or not wanting to quit your business, fire extinguishers probably aren’t going to have that sort of impact. But it’s just to be clear that, you know, they are essential tools in terms of meeting fire safety measures that are required by law. You know, we would expect most employees to have some sort of formal training, it’s possible underwriters might ask for this, but if I’m being honest, you know, most of the time, if we’re ensuring a business and the building contents of that business, the chances are, we’re probably ensuring the public and Employers Liability cover for you, at the same time as well. So obviously, you know, it’s paramount employee safety is, is as paramount in your insurers minds, as it is in most business owners. So I think my advice generally, in the first instance would be, you know, for employees just to get the hell out for in the event of a fire. I mean, not being funny, but you know, just from a purely financial perspective, you know, our employers liability cover is 10 million Sterling. A standard. So, you know, I don’t want to see employers liability claims for employees getting injured because their boss told them they should probably stay behind and try and fight the fire themselves. No, I’d say Get the hell out. But, but it is worth having an awareness. I think there are a range of different fire extinguishers. And they used in different categories are used in different scenarios, whether it be an electrical fire, or it’d be, you know, cooking or oils or what have you, you know, there are different types of extinguisher So, and I believe the sort of basic minimum for a commercial building is to have at least two class A extinguishers. So, as an insurer, that’s probably all we’re looking for, really, is that you, you sort of you meet your absolute minimum in terms of the fire extinguisher regulations there. But, again, you know, if you’ve got a cooking range or something like that in the building, you know, it’s possible that an underwriter might check to make sure that you’ve got a fire extinguisher that’s appropriate for use with, with an oil fire, for example. But generally, you know, my, my advice to most insurance would be, you know, just make sure your employees get out safely, please.

Adam Clarke  30:25

Yeah, and then coming back to the whole fire risk assessment process. I mean, that’s assuming the insured has done, or had a fire fire risk assessment undertaken by a competent person, then that competent assessor should have determined what the what the need is anyway. And assuming they followed through with any, you know, any actions that were required, you know, should be in a fairly good place.

Simon Ratcliff 30:45

Yeah, exactly. That. So just going on, from extinguishes, this is probably going to, to the next level, now really, this is just to give people a little bit of a kind of a view of, you know, what, what an automatic sprinkler system, and it might not be too easy, depending on what sort of device, I’m having to take my glasses off actually, to see the detail of this one close up. But it’s just to give people an idea of, you know, what, what a sprinkler system looks like, and insurers have different views on sprinkler systems, if I’m being honest, I mean, my my own, just from a purely personal, subjective perspective, and I don’t think there is many, many negative aspects to sprinkler systems as sometimes for that was probably because I saw an interesting stat from the National Fire Protection Association, which is American organisation. And they came out with a stat that said that, you know, there had been no fire in any educational, residential or institutional building that had a sprinkler system installed, that never cause more than two deaths. So, you know, there’s an obvious advantage here in terms of preservation of human life. Okay. So, you know, that’s, that’s the starting point. But, you know, obviously, for purely property risk perspective, same organisation also suggested that the the sprinkler system will substantially mitigate property damage, they suggested reduction of 71%. And, and some of the myths about these things going off when you don’t want them to, from what I can make out is largely a loaded nonsense. The stats, I saw that the odds of a fire sprinkler defect causing it to activate when there was no fire, or about one in 16 million. So I’ve certainly never seen a claim for for sprinkler act damage by sprinkler activation. But I think the thing to say here with these is that, you know, we, as insurance, we appreciate that retrofitting something like this is gonna be prohibitively expensive. If we’re being honest, I mean, you know, if you’re talking about moving into, you know, having a purpose built premises, and again, depending on the types of types of risks, or if you’re, if it’s a warehousing or distribution, type exposure, and those are the sorts of risks if they’re coming to me say, Look, we’re looking at building, you know, a new warehouse or something like that, then I might be sort of saying, well, right, okay, how much stock you gotta be storing in, blah, blah, blah, at that point, well, actually, if you aren’t moving into a new premises, you know, if you want a keen right for me, then it’s probably worth you investing in, in a sprinkler system, because you’ve got the opportunity to do so because it’s a new build warehouse. But, you know, realistically, you know, probably not that easy to fit in existing premises, and we get that. But I think for, it’s normally those sorts of sort of new warehousing and distribution exposures, that insurers will be sort of reaching out and saying, Actually, We’d like some input in terms of, you know, the build and some of the fire prevention measures, measures that are going to be in place here. But yeah, it’s, it can be tricky. And indeed, you know, what, even once they’re installed, you know, you’ve also got to make sure that sort of a regular maintenance regime is, is carried out there. And, and so there’s, there’s an ongoing cost associated with them as well. So while they can be remarkably effective, we appreciate that it’s probably not something that most insurance is going to retrofit in their building.

Adam Clarke  34:24

Notice it and, you know, I had I had a question which I think you’ve already somewhat answered, I’ve been in terms of how do we balance life safety against against property safety, and you already explained that if you’re also holding on his ability in public liability, then that’s likely to be far more, far more expensive if the more you pay out for the building, I suppose for the insurers and it’s looking at their business continuity and you know, great if everybody can get out of the building, but if you don’t have a building to go back to and like you mentioned there if it was warehousing distribution, and that was a key part of your you Your network, then the knock on effect of that could be quite could be quite significant. So the actual investment and an on cost of maintenance, may well be worth worth it over, over not having it.

Simon Ratcliff 35:16

Absolutely. And I think that’s a good point, which is that when I see the larger property damage risks, or claims that we’ve we’ve had on larger property, either property damage claims. The bit that is genuinely the most costly for us is the business interruption aspect. So often, repairing the physical damage itself is said, it’s quite rare because we tend to ensure responsible insurance, it’s quite rare for us to have, you know, sort of total loss type scenarios from from a physical damage perspective. But the bit that tends to cost us a fortune is insurance is the business interruption claim. So exactly what you’re talking about there, which is, you know, a particular site is unable to be used, because of, you know, whether it be a fire or flood or whatever’s happened there. But you’ve got if you’ve got one of your key sites out of action, and you’re unable to use that site, the financial loss from the interruption to your business, and the additional costs and expenses of getting yourself up and running somewhere else. That’s often more costly for insurance than it is than the actual site rebuild and reinstatement of the buildings and contents. I very often see, I see claim large claim reserves going in or on property damage claims, you know, you might see 1 million going in against the property damage gentleman and 4 million going in against the business interruption element. So that’s something that I’m certainly as an underwriting major, keen for us to develop as an insurer going forwards, actually, which is about being a bit more proactive, with some of our customers around that business continuity planning aspect. And that’s another area where again, you know, the risks of A is that we use can prove absolutely invaluable to us, because, you know, they can go out and see firsthand an insurance operation. And, and sit down and have an honest conversation with them. It just purely around, you know, disaster recovery scenarios, business continuity planning, and how they can make that plan much more robust than it currently is. And that needs to be a living, breathing document. Because as your business priorities change, so your business continuity plan needs to change alongside it. And that’s what people often forget, you know, it’s not something to, you know, to do, you know, scribble down on one side of a4 when you start your business, and then put away at the bottom of a drawer to gather dust for the next 20 years. Because when you actually need it, it’s no longer fit for purpose. So that’s something that we’re, you know, we’re really keen to work more closely with insurance on is that that business continuity planning aspect. And

Adam Clarke  38:11

given that we’ve all had a few years of dealing with, with COVID, where everybody’s business continuity was tested, there are, of course, that our memories stay for a while in, in the need to keep that updated, because there will be inevitably the next thing that that happens, and whether that’s hoping not something that happened on the same scale, but whether it’s organised organizationally that we have it’s important to have that so I think summarising up then Then Simon is that managing safety for both the insured and the insurer is a pretty good idea. Yeah,

Simon Ratcliff 38:45

absolutely. And, you know, we’re we’re always open to having conversations around you know, what ideas have you got that we can you know, that we can share ideas about making the risk better about you know, having conversations with our surveyors, who will come out and see you and see your, your property and your business firsthand. And as I said, even in for some really, you know, larger, larger premium cases, we all sometimes contribute risk bursaries to customers. So, in other words, we will help pay for risk improvements ourselves, we will share some of that cost burden, because we appreciate the improvement that it makes to the risk.

Simon Ratcliff 39:26

This one I mentioned earlier about, so Inception hazards and development hazard. So just to sort of give a few examples here. So when when an underwriter is looking at a fire, so the two things that they basically consider what are the inset what are the likely Inception hazards? And what are the likely development hazards? So what that basically means is, what are the things that are going to start a fire? And what are the things that are going to contribute towards this spreading? So on this slide, I just tried to give some examples of some very specific Inception hasn’t so if an underwriter identifies One of the things on this, this left hand column here, so contractors carrying out a hot works on site or open fires on the premises or a bonfire party, deep fat frying forklifts charging overnight and attended, these are all things that are potentially more likely to increase the chances of a fire starting in the premises. So when an insurer identify as identify some of these more common Inception hazards, that’s when this might start to ask a few more questions around the control specifically, in terms of, you know, what, at what are you doing to mitigate these factors. And this slide really is just a lot of it is sensible stuff. It’s just about, you know, how you managing it. So for example, you know, if you have got open fires, for example, are you making sure that chimneys and flip fluids are cleaned professionally at regular intervals, for example, and it’s just basic risk management stuff. You know, if you’ve got contractors working on site, carrying out some building repairs, for example, have you checked to make sure they’ve got their own public liability insurance in place to a suitable limit. So if they start a fire on in your in your business premises, we’ve, we’ve all got a chance of claiming back against the contractor for starting. So, you know, some of this stuff is, you know, hopefully basic, common sense. But yeah, the idea behind this slide was just to give a few examples of, you know, some of the things that might just trigger a little alarm bell, underwriters mind, if they’re looking at a risk, if that identify some of these.

Adam Clarke  41:38

So hot work, then I mean, we, we could probably spend a few hours talking about awkward, awkward, awkward incidents over over time, but in 2023, is that still something that you’re still seeing those kind of incidents occurring? Yeah, there’s there’s been systems and methods of, of managing that in place for a very long time. Now, you mentioned about one thing is about checking contracts has got adequate levels of insurance, the competency of contractors still still come at the forefront.

Simon Ratcliff 42:08

I mean, massively two of the biggest claims that I’ve had conversations about in the last 60 days, which shows how current it is. So one relates to a sort of more general decorator type contractor was doing some work on premises. And they needed the the fell flat roof needed needed refelting. Basically, in this occasion, the contractor that wasn’t a job that he particularly qualified to do. So he got another contractor and subcontractor and to carry that work out on his behalf. And that guy’s got up on the roof, and completely messed it up. He said, he said, like to the building, he’s burnt the whole thing down. And that’s actually now coming in as a claim against our contractor. Because obviously, that’s that was who the contractor was with for the works in the first place. So in that instance, we’re actually insuring the primary contractor, but it’s a subcontractor, who’s basically come in, burnt a building down with a hot gun that he’s using to apply a flat felt roof. And that subcontractor hasn’t got the appropriate insurance in place. Our guide didn’t check that his own subcontractor was covered for the work that he was asking him to carry out. So I mean, that’s crazy to me. But there you go. That’s, that’s very, very recent, we’ve got another one, which is a guy who was working in, it was a temporary work placement in place to work in a boat building yard. And he decided it was he was, he was applying some sort of laminate wood flooring again, with like a hot gun, and decided that the whole thing was, frankly, to Tyson. And it was about time that he went to the local courthouse for a bit of lunch, and decided to just gaffa tape the hot gun to a block of wood. And, and, and, and sort of propped it up and left it sort of, you know, going on the, on this on this flooring. And when he came back from his, from his carry lunch, Not only had he managed to set fire to the boat that he was working on, but the entire warehouse that it was in it burnt down as well. So, you know, it’s all very well and good saying oh, you know, we’ve got to, we’ve got good risk management plans in place. But the sad the sad fact is, is that, you know, as an underwriting manager, I wish we could sometimes have crest stupidity, exclusions in our insurance wordings, but I’ve been told I’m definitely not allowed to get away with that. And it’s often just the actions of one individual. You just can’t be bothered. It’s the weakest point, isn’t it? Exactly. You

Adam Clarke  44:58

know, it’s all good having You know, policies and procedures, but if they don’t filter down to the people who actually who actually doing it and you know, on your previous example, might have control of contractors arrangements. But if you’re actually not following, then you end up in a situation where you, like you’ve described, and I can’t imagine as, as the insurer having having to deal with that situation, it makes you particularly happy.

Simon Ratcliff 45:21

No. But we will still pay those claims nonetheless. No, I’m not happy about it. And as I say, I was I was searching quite hard for the crass stupidity clause on on one or two of those, but they will end up probably, you know, between the pair of those two claims costing us over a million.

Adam Clarke  45:41

Yeah, again, for something which is very known, a very known hazard, and very, very straightforward to manage without much cost.

Simon Ratcliff 45:50

Exactly. So yeah, we skipped over the last one there, but the other one was just just talking a little bit about development that has it. So what I mean by development hazards is things that are going to accelerate the risk of a fire spreading. So that could be things like storage of flammable gases, or, or, you know, breaches in fire compartment, walls, floors, or ceilings, etc, etc. So, you know, those are the sorts of things that again, you know, I just got to just, you know, write and underwriters eyebrow might be raised a little bit, and one might want to just double check, you know, say particularly with things like storage, large, large quantities, Flambards, etc, that, you know, sort of basic regulations are being maintained, and, you know, good fire separation, which is particularly important in certain types of buildings, like sort of warehouses or rows of industrial units or blocks of flats, so that a fire isn’t spreading quickly from, from one to the other, but probably the main consideration from from an underwriters perspective is going to be the construction method of the building itself. You know, that’s, that’s the fundamental thing that’s going to contribute to a fire spreading quickly, you know, I sometimes joke could be, you know, underwriters refer risks to me, and they might say, Oh, well, this, this, this risks in appetite, because it’s a, it’s a technology company, and we write lots of technology business. So it must be an appetite for us as a Yeah, but what, what’s the premise is built off, because if it’s built twigs and cuckoo spirit, it’s not going to be an appetite, frankly. So, you know, for me, it’s about recognising and understanding the type of instruction you’ve got your building and how that’s going to contribute to fire spread. So on the next slide, I’ve put a couple of photos. Now, you know, the one on the bottom left, there is an example of what most people might terms of standard construction. So there’s brick and block construction, not the traditional building method for residential properties. Now, even though you might consider that to be standard construction, there’s probably still 10 to 25% of combustible materials used in that in that building. So for example, things like timber roof joists in the upper structure, and then the building above it, slightly paler one looks almost identical, identical. So you know, it could be quite natural to assume that that house is also of standard construction. But in actual fact, that will perform very, very differently if a fire broke out, because on that building on top, all of the support structures are built from timber. And then what you’ve basically got is a kind of half brick cladding over the top. And that’s the, the image on the right hand side, basically. So it looks ostensibly like it’s made of bricks, but it’s not, it’s basically built on wood. And then someone’s put this almost like a veneer of heartbreak over the top of it. And, you know, that that can make spotting, sort of timber frame buildings, you know, pretty, pretty tricky when they’re finished. And this can increase the combustibility by anywhere between 25 and 50%. So, you know, at that point, that’s when an underwriter is going to be thinking the chances of total loss here have just gone up quite significantly. You know, and, and although these are, these are residential properties that I’ve used, they were just the best examples that I could, I could to show in terms of the clearest image but, you know, this, this construction method is, is quite common in commercial premises to offices, surgery shops will use this sort of timber and heartbreak construction method. So, you know, I think it’s, it’s important because, you know, if you’re telling an insurer that you’ve got, you know, a non combustible building, and it turns out that you haven’t, again, that’s going to make conversations pretty tricky or claim stage and that’s not the time we want to be having those conversations, and we don’t either as insurers, frankly. And then on the Next slide. The other, the other one was the underwriters are going to certainly see here an alarm bell going off is, is when they hear about sandwich panels or composite panels in the construction. So sandwich panel basically describes their appearance. So that basically means is you’ve got to kind of layers often have something like aluminium sheet with it with an insulating core. And it’s really the nature of what’s in the middle of those two layers, that core that is going to be key to whether the underwriter is going to want to accept that risk or not. So, you know, if there’s something like if it’s a rockwool, glass wall or mineral fibre type substance, that’s generally non combustible, and insurers are typically fine with that. But if that’s like expanded polystyrene, there’s an insulating material in the in the middle, afraid that it’s going to go up like the clapper, it is that the entire structural integrity of the building becomes compromised. And often, you know if the fire service identifies that that’s the type of construction that you’ve got.

Simon Ratcliff 51:12

And make sure that it doesn’t set alight to anything else. And that’s where you’re in absolute total loss scenarios. So, you know, sadly, you know, Grenfell highlighted the importance of that infill material and the different difference it can make to the combustibility of a building. So you need to understand that if you have got that sort of construction, in your in your premises, that you’re absolutely calling it out, as soon as possible, because if underwriters find out at the wrong stage, it can leave you in a very, very difficult position. And personally, you know, generally Hiscox said, we would only look to ensure those sorts of panels, if they had been tested and approved, you know, to a to a loss prevention standard, that gave us enough comfort that they would be at least 1360 minutes fight resistance.

Adam Clarke  52:06

And has your view on that changed in in a post Grenfell?

Simon Ratcliff 52:10

No, not not much other than we didn’t like them much before. And now we like them even less. So, yeah, it’s, it’s just a case of just having an understanding, I think in terms of the methods of construction used in the building, you know, don’t just say it’s standard construction, because I don’t think that phrase means too much anymore. So you know, it can, it can really help insurers get a handle on your risk, if you’re able to provide detailed description of what the construction methods in the building are, and just being upfront about it. And if you do have things like sandwich panels and stuff like that, you know, about me finding out, you know, are they do they have a level of fire resistance that’s going to keep insurance happy, or are you going to be having some very, very difficult conversations if, if a fire breaks out. And just just to summarise that, I thought it might be useful there just to kind of kind of green is good, red is bad, but this is just a list of, you know, when when we’re looking at a building the methods of construction, you know, any underwriter is just going to want to see that stuff on the on the left hand list as much of that as possible and as as little of the stuff on the on the right hand corner as possible. So, you know, the more you’re able to demonstrate that you’ve got, you know, a largely non combustible materials being used in new construction, then methods, then underwriters are going to be a lot more keen to pick up your business.

Adam Clarke  53:46

Thank you, Simon. So just just one question in follow up to that, then, from your perspective, how important is management of of compartmentation. And whilst we touched on hot work earlier, we didn’t we didn’t touch about permit permits to work and, and we’re seeing that more and more organisations are looking at using permits to work when it comes to any changes in the in the compartmentation. And then also the competence of the contractors that are actually undertaking the do any any remedial work, because as we as we’ve mentioned previously, if if we’re creating creating holes, and we’re not filling it, that’s one thing, if we’re creating holes, and then we’re filling it with the wrong thing. That’s, that’s another problem. Yeah,

Simon Ratcliff 54:28

I think that that’s the main concern for me is, is where you’re told, Oh, yeah, it’s, we’ve filled in any holes that we’ve made in the compartment there and you look at it, and then, you know, there’s just this kind of botch job of, you know, a pink splotch in the middle of a hole in the wall that you know, has got absolutely no kind of fire integrity whatsoever. I mean, for me, it’s just about making sure really, that you’re using, you know, rich, reputable contractors who know what they’re doing are specialists in the work that you’re asking them to. To carry out, and that you’ve, you’ve seen evidence that they’ve got an appropriate level of public liability insurance in place, so that, you know, if they do cause any damage or responsible for, for increasing damage, at least that way, you know, your insurer has an opportunity of recovering from them. And that’s what, you know, it will be on us to recover. So we would meet the claim in the first instance. But then we would we would go after that we would go after that contractor on on an insurance behalf, we would we would use our own legal people to go after that. And so, you know, potentially that claim there might not be sat on your claims record for the rest of your business insurance. If we can get, you know, if we can get our money back. And it’s not just about, you know, have they got public liability insurance in place, but I mean, you know, unfortunately, I’ve seen, I’ve seen cases where said, oh, yeah, we asked, they’ve definitely got public liability insurance in place. Well, firstly, there’s a hot workers exclusion on their policy. So the minute they do any hot work, that public liability insurance is completely invalid. Secondly, that contract has only got a 1 million limit, and your building is going to cost 10 million to reinstate. So how far do you think that’s actually going to go? So it’s not just about making sure that, you know, they’re competent, they know what they’re doing. They’re reputable, but also making sure that they’ve got the right insurance in place, but also to the right limit? Is the other important thing?

Adam Clarke  56:31

Yeah, that’s a really good point. Because I suppose there’s there’s an element of going through and undertaking that that checking process. But if you’re, if they’re presenting you with a valid date, picker, doesn’t necessarily mean that what it says within certificate meets the the activities that they’re going to be undertaking, because this is exactly the way Yes. Okay, so just conscious of time, and I’ve had quite a number of questions come through. So I think we’re pretty good time to answer, perhaps one, and then we’ll pick up some of the other questions after the after the session. So just look at the first first one that that is in the chat that I can see as well as it goes back to Inception hazards assignment. So what what kind of conditions or concerns do you have regarding electric vehicles, electric scooters, anything with lithium ion batteries in?

Simon Ratcliff 57:20

So interested, interesting one, actually, and as I said, we are quite involved in technology risks genuinely. And so we have actually had a number of our own in shorts, who are responsible for research and development and installation of electric charge points. So there was one, for example, that was referred to me recently, because they’ve been asked to instal a load of electric charge points in New York, around the city. And they’re going to be contracted out there. And generally, you know, we’ve learned a bit from those guys. And our, our experience at the moment so far is that, you know, we’re we are, we’re not prejudiced against it, put it that way, you know, that we we’ve got some confidence that the level of sort of research and development that has gone into these things, is, is pretty significant. As I said, you know, for me, I do get a little bit worried when I hear about sort of unattended charging or overnight charging sometimes. So, you know, I would hope that, you know, charging is just generally done during business hours. So that if anything were to were to happen, you know, there’s someone there to do something about it, basically. But I certainly wouldn’t look poorly on a risk that had, for example, installed electric charge points for their stuff.

Adam Clarke 58:53

Thank you so much, Simon. Tracy.

Tracy Seward  58:58

Thanks, guys. And we’ve had loads of questions come through. So we can either carry on going through those questions. And if if anyone needs to leave, then by all means, feel free to dial off. But we can answer some of those questions now. We’ll keep recording. We’ll put the recording up on our resources page afterwards, if you’re both comfortable doing that, Simon and Adam, I’ve got quite a few questions that have come through on the chat. So the next one that’s come through where there is an impairment on your fire detection system, for example, how long would need to be in place before you’re expected to complete an impairment notice?

Simon Ratcliff 59:37

I think for me is said, I think generally, I’d say be honest with you insurance if something like doesn’t matter what it is, like whether it’s a fire detection system, an intruder alarm system. We appreciate that stuff does go wrong. We appreciate that stuff sometimes needs fixing, and all the rest of it. You know, I would just say be honest, we are generally unhappy. Peter negotiate in terms of timescales on what it’s going to take. And also depends on where you are as well. I mean, again, you know, I was, I was trying to get a surveyor out recently to look at a department store in the Shetland Islands. Now, I appreciate that, you know, trying to get something fixed if your business is located in a certain balance, and it’s probably can take you a little bit longer to sort out than, you know, if you’re in Birmingham, Manchester or London, for example. So I would just say it’s about being honest. I mean, it’s, it would be rare for me to sort of, not say, like, well, I have 30 days to try and sorted out, and then we’ll see where, but keep me updated on how you’re getting on. That’s my general rule of thumb.

Adam Clarke  1:00:43

So if you if you go for 30 days, and they said, you know, on day 25, we’ve got, we’ve got something sorted, but the contractor isn’t going to be here for another another two weeks, but it’s but it’s booked in, generally speaking, that would be all right.

Simon Ratcliff 1:00:56

Yeah, absolutely. And then the point is, they’ve taken some action they’re trying to do something about it, is the guy that leaves it to date 29, before he even picks up the phone to do do the first thing is the one where I’m going to be like, Why the hell should I offer you an extension? But if the guy’s like, No, I phoned around every, you know, three, I’ve got three separate quotes, and I can’t get one out quicker than 45 days, then, of course, we can I love 45 days. That’s, I mean, I, you know, for me, you know, and underwriting, I try not to be too kind of, you know, computer says no about it, you know, brains make a difference at the end of the day, and I’d rather have someone that’s a proactive insurer to try to do the right thing and be flexible with him. And keep that customer.

Tracy Seward  1:01:41

Thank you for that. Okay. Next question. Would Pat testing vary site by site, eg higher risk more frequent through to lower risk? Sorry, my battery’s low, isn’t this frequent? Not a case of one size fits all annual?

Simon Ratcliff 1:01:58

I mean, a lot of the most of the pack testing stuff. I mean, it’s it’s fairly one size fits all. I think. I mean, I don’t think there is. I can’t think of too many kinds of exceptions where where I’ve seen, you know, to, to that generally, as I said, and a lot of the businesses that we insure these days, though, it tends to be the same staff, it’s, it’s computer equipment is kitchen, kitchen items and stuff like that. I guess there might be exceptions, if it was kind of more specialist, sort of, you know, production or manufacturing, bits of equipment, potentially. But for most risks, I think it’s fairly one size fits all. I mean, Adam, you probably see, yeah, I

Adam Clarke  1:02:42

mean, your variation. I mean, it’s the, you know, maintaining electrical equipment. The, the real nitty gritty detail of Pat testing is, you know, by the risk assessment, so, in our experience, most people handle it in a similar way, simply because it’s, it’s easier. So, you know, like, for a lot about offices, it’s quite common that people will have somebody come out on a, on an annual basis, because that’s a simpler thing to do from a PPM perspective. However, if you’re, if you’ve really got a good handle on it, and you can set up a regime where you’ve got certain things being done on an annual basis, certain things have been done on a three year basis, maybe something’s done on a five year basis, then great, great, if you can manage it, manage it that way. I think the important thing is that we’ve also got vigilant staff that way we can see electric equipment is damaged that we do something about it and take it out of take out of service and an equally when we’re looking at where we’re sourcing our electrical equipment from especially things like replacement battery chargers, for laptops, you know, it’s there’s a common example of go and buy the one that’s the the official officially branded one, it might cost a bit more, but it’s probably been manufactured to a better standard. Yeah.

Tracy Seward  1:04:05

Sorry, right, next question. And on practising given the HSE guidance, does not recommend annual testing for all devices? Would you recommend that an organisation goes beyond the requirements in imdg? 236?

Simon Ratcliff 1:04:21

Well, as I said, at the end of the day, I mean, our our general position this, as a bare minimum, ensure we’re going to expect you to, you know, comply with regulatory requirements. And that’s, that’s sort of the benchmark. But if you’re going over and above that, it doesn’t matter whether it’s PARCC testing or anything else, you know, if you’re doing something over and above the average, you know, it’s always going to be a green tick from an insurance perspective. Now, whether just doing slightly more frequent pap testing done is strictly required. Is that going to be enough for an underwriter to start you No putting a 10% discount on your buildings premium, that no in and of itself, it’s probably not going to make that much difference on its own. But it’s about the overall picture of responsibility as an insured, if you’re demonstrating you’re doing that and something else, and something that you’re doing a number of measures to just a little bit more than the absolute base minimum, all of those things are going to stack up. So yeah, in and of itself, it’s probably not going to make a huge amount of difference. But would it? Would it be another green tick, if I was looking at a risk I was trying to win as a piece of new business? And how keenly I’m going to try? See, it’s certainly something that’s going to kind of contribute to my thinking.

Adam Clarke  1:05:51

Because I’ll just pick up the next question, then. Can you clarify if an organisation makes decision to have portable fire extinguishers, as per the risk assessment, they decide not to train their staff on using the fire extinguishers? Would this be acceptable?

Simon Ratcliff 1:06:11

I mean, I personally would expect there to be in most businesses. I don’t expect every last employee every last new joiner is going to be fully trained on how to on how to use a fire extinguisher. But you know, I would expect there to be certain personnel in the building early start how to use it, frankly. I mean, even even in some of the small businesses, when I first started out my career in insurance, I remember standing out in the in the carpark of an insurance brokers office, you know, letting off fire extinguishers, you know, in the carpark and so on and so forth. And, you know, I think I think it’s probably not unreasonable, but it depends on the, you know, the nature of the business. And it depends on the level of staff turnover as well. I mean, it might not be practical, right to get every if you’re a business that just typically has quite high staff turnover levels, then it’s probably not that practical to expect you f1 To be completely ofay, with all of the fire risk management procedures that you might have enforce. But you would probably at least expect, you know, a couple of the more senior members of staff to to have a working knowledge. That’d be my view anyway.

Adam Clarke  1:07:21

No, and I’d share a similar view, this is one it’s been debated and debated many, many times, I think you’re absolutely right, it’s down to the nature of the activities that you’re doing, especially in a kind of a post COVID agile era where you’ve got people in there who perhaps have maybe come to the office once, you know, once a month, once a quarter, you would expect them to have have training for that because they’re not familiar with her familiar with the with the building, the primary message is still to people to get out. Some say some knowledge is if I’ve got to use that extinguish because it’s, I can’t find a way out, then having someone that knows what they’re doing is going to be going to be helpful. But as always, we’d hoped that the fire extinguisher is the last resort.

Tracy Seward  1:08:04

Sorry, guys, my my battery ran out. So but it’s all fine. We’re back on, there was a bit of a bit of a backwards and forwards on the chat about this actually. And, and one of the responses, obviously, and I know you said Simon during the webinar, that you know that the main priority is just to get everybody out. So, you know, that is the main message. But somebody else then put wonder what the insurance point of view would ensure his point of view would be in that does this represent some sort of self acceptance that limits of damage and remediation would be greater than if train if you train some staff?

Simon Ratcliff 1:08:41

I said we I mean generally we would normally insure the property and and casualty aspect of a risk. So we’re, you know, we’re normally insuring the business as a whole. And, you know, so just both as a as an underwriter and, and as a human being, you know, my advice is always going to be human life, human safety comes first. It’s just as simple as that. So do we accept that, you know, there may be an increased rate of damage, you know, the fire might spread a little bit more quickly than it otherwise might have been? Had someone hung around and tried to back up with a fire. Yeah, I think insurance I just absolutely. Except that, but you know, they’re going to trade that for the fact that everyone got out and wasn’t hurt, frankly, because, you know, it’s a the human position to take. But it also, it may also make business sense to us as well.

Tracy Seward  1:09:40

Yeah, thank you. Okay, next question. Any increase increased risks posed COVID with changes of building use and occupation and hybrid working flexible work patterns, etc.

Simon Ratcliff 1:09:53

From a from that perspective, I think most of what I mean, I think the first thing I’d say is actually We haven’t seen so many COVID related claims coming in, I expected there. Obviously, other than sort of business interruption ones, but I’m thinking more in terms of, you know, public and Employers Liability type claims. We haven’t seen that much. I think what we are expecting to see is probably more employers liability claims coming down the line from incorrect in incorrect or sort of posture, or home equipment. So, you know, are we going to start seeing, you know, back and neck strain, and then sort of carpal tunnel type claims coming through with a greater frequency, I strongly suspect that the insurance market in general will start to see more of that coming through? And certainly, so but but we’re not yet. I mean, those those sorts of claims are the sorts of things that it’ll probably be five to 10 years before we really start to see them coming through with any sorts of volume. So too early to tell on that. Yeah, I mean, the interesting one, for me, though, is obviously, a lot of buildings that were, you know, traditionally, so purely office space. Obviously, with a lot of people working from home now, you know, there just isn’t as much demand for office spaces there was pure prior to the pandemic, and we are having to be more flexible, in terms of some of the nature of the occupied, you know, the occupancy of that. So, a risk that we might have insured as a purely clerical administrative occupation, is now subletting some rooms, or a wing or a floor or whatever it is, to another business that might do something else. And that’s just how it is. And I know lots of businesses are in that, in that boat now. And an insurance we’re just going to have to be more flexible in terms of the way they underwrite. And that for me, though, is where that whole brains make a difference thing comes in, right? So, you know, those insurers that rely upon computer algorithms to do their underwriting for them, you know, you’re going to say, is this risk purely occupied as an office? No, it’s probably going to kick you out of their, quote, engine and say, Sorry, we can’t help you. Whereas, you know, if you’ve got, you know, an insurer where you know, that they trust their underwriters and empower their underwriters to make a decision, then, as long as you’re telling me that you’re not just subletting to a panel beaters, I’m probably going to try and show some flexibility.

Tracy Seward  1:12:43

Thanks, Simon. Okay, on to the next question, you mentioned that you’re looking for fire extinguisher methods, but does the value of the items protected come into play?

Simon Ratcliff 1:12:54

Yes, I mean, it will do obviously, and what those items are. And it’s like, it’s like anything, I mean, we don’t have as an insurer, we probably have a higher expense base, than a lot of other insurance. So by that, I mean, you know, the likes of the big compensation was like the access and the Aviva as will be a lot more kind of efficient computer based portfolio underwriting. We are we are a smaller organisation, and we tend to realise a sale upon that, you know, the brains of our, of our underwriters to make a difference. But even with that, you know, there is still stuff that we will just push through and won’t get that closer level of underwriting. And it’s normally, you know, values and sums, insured, the trigger things in our system to say, underwriter needs to look at this place underwriter to look at this bit, a lot of those kind of validations in our system that sort of call the underwriters to arms are normally triggered either by a total, the sum insured within a within a particular set of any single fire risk, which is normally any one building, or maybe a single article limit exceeded. So if you’ve got a particular piece of equipment on which is, you know, really expensive, difficult to replace, you know, then those are the sorts of things where we’re going to start sort of trying to understand about, you know, how do you make sure that even if, you know, even if the office space goes up in smoke for that bit of equipment is somehow protected. But yeah, it’s entirely driven by by values of risk generally.

Tracy Seward  1:14:42

Thank you. And, okay, final question. Do you check that telecom cables in rises, etcetera, a fire rated or fire resistant or fire performance when you do surveys before you insure and can they be confused?

Simon Ratcliff 1:14:57

It’s for memory, it’s it might be something that a surveyor calls out. I mean, generally we use external survey firms. Again, you know, compared to the big companies, we’re not a big insurance, so we don’t have hundreds and hundreds of servers on our own books. I actually like the fact that we use independent surveys, because I think it gives us a more independent perspective, frankly, a lot of the time. So it may well be that it’s something that a surveyor chooses to call out. But not enough frequently when I don’t see that many because not so involved in in case to case underwriting these days. I don’t see as many survey reports as I used to, but the ones I do it’s not something I’m seeing called out in service particularly.

Tracy Seward  1:15:43

Great. Thanks, Simon. Anything else from you, Adam, I think we’ve got through most of the questions. If we haven’t, then obviously we can. We can always put any answers up on our resources page anyway.

Adam Clarke  1:15:54

No, other than say, Simon, thank you so much for your for your time. It’s been a really great session. And I’m sure we’ve got about a great deal out of it. So thank you very much.

Tracy Seward  1:16:05

Thank you. Thank you. Thanks. And if anyone wants to join us for our next webinar, which is influencing at board level to achieve the right culture, then join us on Wednesday, the 22nd of February at 11am. We’ll be in touch with all of the various things over email. Thanks again. Thank you