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- The Insurance Market
- Terms of Trade - Insuring Vendor Product and Protecting your
Debtors Ledger
- Journey On - A New Roadside Assist Option
- Claims - Change in Court Processes
- Internet Liability
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The Insurance Market
With comment made regularly in the media, it will be no surprise for you that premiums
across all insurers and on all product lines have increased on last year.
Homeowners will have noticed substantial increases on both house and contents and even more so for those with rental properties. The only real way to limit the pain is by examining your excess levels.
We have also been advised that effective 1 November there will be another round of increases with the various domestic insurers, ranging on various products from a 7.5% to 15% increase.
Terms of Trade
Firstly, I must take this opportunity to point out that the seminars held by EMA (Employers & Manufacturers Association) relating to various business issues are well worth the time and money spent. I have recently attended an EMA seminar on Terms of Trade and found it most valuable from an insurance and general business perspective.
We also have the good fortune to work with Stewart Germann of the Stewart Germann Law Office and thus we can obtain information from his various newsletters to incorporate within our own. Stewart’s latest newsletter also made mention of the all important issue of Terms of Trade.
It is very evident that many businesses do not have Terms of Trade in existence and often when we ask a new client for a copy of their Terms of Trade there is a blank look. I am not sure if it’s from the point “Why should my insurance broker be asking for this?” or “Ooops, we have never had one and how do I answer this question?”
Let’s look at it from the positive perspective which is “Why should an insurance professional be asking me that?” Well apart from the legal aspect and sorting out the buyer and vendor liability issues it defines for us where the risk starts and finishes and over what time period the risk applies. It also guides brokers in regard to the sums insured that should be put in place for the Material Damage and Business Interruption policies. There are also the risks relating to Inland Transit or imports/exports insurance and
then of course Trade Credit cover.
Are you scared yet? You should be because you may find that if you manufacture a product and you use outside sourced materials that your sums insured are inadequate.
Material Damage
This covers all the assets that you own and have in your possession and maybe if the policy is worded correctly, other customers’ products. Now here is the pincher …if you have stock of raw materials, do those materials actually belong to you or do they still belong to the company that sold them to you?
Look at the Terms of Trade and refer to the Sale of Goods Act. The vendor maintains ownership of those products until they have been paid for but the risk is yours to insure against damage until you actually own them.
Now The Ramalpa Clause is going to be your first cry for defence but this has been tested a number of times and you must wonder why it is still used because apparently you need to be able to identify the product as the vendors but if it has already been incorporated into another product then this identification process becomes very difficult.
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