In the current Covid-19 crises we have seen a number of REC’s advise us that they wish to suspend, cancel or even lapse their insurance cover until trading conditions return to normal.
In this difficult time, a lot of REC’s may have let staff go temporarily and have little or no income coming in and are naturally looking at all of their outgoings.
It is understandable that insurance may appear to be unnecessary, if there is no work ongoing, but this is simply, not the case and we must point out that Insurance remains an absolute requirement of your membership.
Employers, Public & Products liability insurance is arranged on what is known as a ‘Claims Occurring basis’. Simply put, this means that insurance must be in place on the day a claim occurs for the policy to respond and be valid.
This is a point that generally causes considerable confusion with the general public, when the date the work was actually done can be irrelevant.
If work was done in January, when cover was in place and then an incident occurs in April, after cover has lapsed or was suspended then the policy WILL NOT respond, and no cover will apply.
The ‘trigger’ for insurers to deal with a claim is the date of occurrence of the incident and not the date the work was done, so your Insurance policy must be in force when the loss occurs.
The area with the largest exposure in times of reduced trading is the Products Liability section. REC’s install and maintain various products every day.
If one of the products they supply is faulty and causes damage after they have left the site i.e. A Fire, they will generally still be liable for any damage they have caused.
Once again, if they have no cover on the date of occurrence then no cover will apply.
REC’s should also be mindful that although their activity is reduced at this time, there may be some activity such as, checking sites or some emergency work that is required.
Furthermore, contractors may have some active sites that are currently secured and again they have an exposure here for any legal liability arising from those sites.
While it is clear that the exposure is reduced, you should be aware that you still have existing exposures and will need adequate insurance to protect yourselves.
On this basis, we must advise that, all REC’s must maintain their insurance cover at all times to comply with their membership and the conditions required by the Commission for Regulation of Utilities in Ireland.
Should you have any queries at any stage please do not hesitate to contact us.