New research reveals that 22% of senior executives and managers at British firms believe that Brexit will prompt business interruption claims.
Independent expert on insurance placement and disputes Mctavish undertook the research which found that business leaders believe there will be a rise in business interruption insurance claims linked to damages and losses worsened by a disorderly Brexit.
The firm is warning that many of these claims could be rejected. This is because the organisations may not have informed their insurers of these risks, which they are required to do by law.
Some 18% of senior executives and managers who believe their organisations are at risk from Brexit say their employers have not done this. Only 25% of those who believe they are facing Brexit- related risks say their insurers have been informed of these. The remainder either do not know if this is the case or believe they do not face any specific threats from Brexit.
Furthermore, individual directors at these organisations could personally be exposed to legal action for not informing insurers of these risks because of traditional limitations applied to Directors and Officers (D&O) insurance cover.
Mactavish said: “We can help organisations understand the risks posed by a disorderly Brexit, review their insurance policies to see if they have adequate cover and help them with any related claims that are rejected.”
The research reveals that 26% of UK executives and managers believe the organisations they work for will be affected by Brexit and have not prepared for it. In terms of the biggest potential risks facing organisations if Brexit goes badly, 35% of those interviewed believe their organisations could have problems with sourcing suppliers in the first year. This is followed by 31% who cite staff shortages, as they expect some of their EU employees to return home, and it will be more difficult to recruit from Europe. One in four (24%) think they could find it difficult to secure new sources of finance because their organisations are so focused on Europe.
Bruce Hepburn, CEO, Mactavish said: “Our findings show that many businesses are facing significant risks from a disorderly Brexit, and that many have not prepared for this properly or adequately informed their insurers of these. All of this creates several insurance related challenges and it can be difficult to know what they are covered for. Organisations need to review their existing cover to ensure it is adequate.”
Mactavish is the UK’s leading independent expert on insurance placement and disputes.