BIBA warns business about hidden damages of cost cutting

The British Insurance Brokers’ Association (BIBA) has called on all businesses to work with their insurance brokers to ensure that they maintain the appropriate level of cover during the credit crunch.

BIBA is concerned that budgetary pressures and the impact of recession may result in some firms reducing their levels of risk management or insurance cover. BIBA is warning that action taken to reduce costs, such as putting off maintenance of property and vehicles could expose businesses by reducing or invalidating their insurance cover.

BIBA has written to Business Minister Baroness Vadera, to ask for the Government’s support in raising the importance of maintaining appropriate levels of risk management and insurance cover during tough economic times.

Eric Galbraith, BIBA Chief Executive, commented: “In challenging market conditions and with the threat of recession, BIBA understands the pressure on all businesses to make cost savings. However, it is vital that all businesses take the appropriate steps to ensure they are protected and not breaking any condition or warranty on their insurance policy which could leave them exposed. Cost cutting, could ultimately be a false economy and businesses should work closely with their brokers.”

Coversure Insurance Services are members of the British Insurance Brokers Association – www.biba.org.uk; this article is reproduced here with their kind permission.