[vc_row][vc_column][vc_column_text]The VFI recently concluded a series of regional workshops focused on the issue of insurance and reducing business costs. As our CEO Padraig Cribben said at the Cavan workshop, insurance is the biggest issue facing members today.
The difficulties facing VFI members securing insurance cover are well documented. As Michael Sheehy, Managing Director of Alert Liability Management, said in his opening comments in the Slieve Russell Hotel many insurance companies are no longer offering terms while pubs with a claims history are facing major difficulties in obtaining quotes and, if quoted, can face an increase of multiples of their premium.
Michael said increases are generally blamed on losses experienced by insurers caused by the compensation culture, legal costs, substantial court awards and fraud.
In terms of the level of awards, the book of Quantum was revised upwards in 2016 to reflect the increase of awards in the courts. District court award limits increased from €5,000 to €15,000 and Circuit court award limits were increased from €38,000 to €60,000.
Insurance fraud costs insurance companies in Ireland an estimated €200 million annually which ends up being paid by policyholders. Insurers were also contributors to the ‘compo culture’ through their own practices, specifically settling claims to avoid litigation, sometimes without proper investigation where liability should have been in dispute.
The majority of claims experienced in the hospitality sector are Public Liability Claims. “We recently conducted an assessment from our clients in the hospitality sector,” said Michael and the following was the breakdown of the type of Public Liability claims:
- Slips, Trips & Falls account for 67%
- Assaults account for 27%
- Others account for 6%
Also speaking in Cavan was Declan Feely from Owens McCarthy, who specialise in dealing with claims. According to Declan “the world is changing from an insurance perspective”.
He outlined some common causes of fires in pubs ranging from deliberate to electrical, gas and cooking. He said insurance policies are complex but the section containing warranties is the most important to and understand. He also mentioned ‘conditions precedent’ as being crucial. This is the list of conditions your insurance company expects to be fulfilled in the event of a claim ever to be made. For example, this would include issues like keeping kitchen air extractors clear.
In a final presentation, Alan Cruite from Trinity Hospitality Services spoke about how to reduce the cost of goods and services. According to Alan Trinity purchases €80m worth of goods and services from over 100 suppliers, which allows it to pass on excellent value in the hospitality sector.
He said price was key but other factors included product quality, product consistency, level of service and logistics.
Alan outlined the case of a VFI member who made the following costs savings after engaging with Trinity:
- Telecoms: 37% savings
- Merchant services: 22% savings
- Energy: 11% savings
- Food: 21% savings
- Beverage: 9% savings
- Linen: 13% savings
- Chemicals: 22% savings
- Stationery: 17% savings
Total savings of approx.: €30k per annum
Pubs that engage with Trinity will undergo a complete free audit of all their outgoings. The Trinity team visit the pub and conduct the audit on site where they present the savings available that day.[/vc_column_text][vc_text_separator][/vc_column][/vc_row][vc_row][vc_column width=”1/2″][vc_column_text]
Michael Sheehy from Alert Liability Management outlined some general rules when it comes to accidents:
- Don’t ignore any incident no matter how incidental it may seem
- Always prioritise your staff’s and customers’ well-being
- Don’t admit liability or responsibility for an incident
- Always maintain an incident report log
- Always conduct an investigation
- Always record incident’s in full
- Always retain all of the evidence
- Always ensure corrective measures are taken
Declan Feely outlined a loss mitigation plan:
- Prevent incidents
- Check premises at close of business
- Comply with warranties
- Correct level of cover
- Business continuity plan
- Employ an expert