…how a small assumption could have huge consequences…
I provide a lot of camera kit insurance and sound equipment insurance for freelancers. The ones I know are a class act; the unsung heroes of the media world – driving the miles and putting in the (usually unsociable) hours to get the job done.
What is clear to me, is that they all value their equipment as the tools of their trade – without their camera or sound kit, they simply can’t work. My job is to protect their livelihoods in the best way I can.
I’m often asked whether I provide cover for Theft from an Unattended Vehicle, and the simple answer is “Yes”. However, this isn’t the whole answer, and the reason for that it as it’s not necessarily the whole question I’m being asked. Rather than answering yes or no, the best response I can offer is “why do you ask?”. And here we come to an important principle:
The Insurance Act 2015 – Fair Presentation of Risk
I’m sure you’re more than aware of your duty to disclose Material Facts and that these are any facts that could influence a prudent underwriter in the rating or acceptance of your risk (the thing you’re seeking insurance for).
Fair Presentation of Risk still includes this principle but extends it to also include information that you know, or ought to know, about your business. It places an additional burden on you to search for information about your business, about yourself and about your fellow directors and to supply this in an easy to understand format to your broker.
So, how does this relate to Theft from an Unattended Vehicle cover?
Freelancers work in a number of different ways, and it is generally understood that from time to time they will have some of their kit in their vehicle whilst at, or travelling to, the film location or TV studio where they are working and that for some of this time it is at risk of theft from an unattended vehicle.
Do MediaRoo cover this under our bespoke Freelancer Insurance scheme? Absolutely! All we ask is that the kit is concealed from view, any security devices put into operation, and that any theft of the equipment is accompanied by signs of a forced break-in (so that we know that the door hasn’t simply been left unlocked!).
I think this scenario is reasonable and widely accepted, but it’s good to get confirmation of the cover you currently have from your own broker, as I have seen other insurers who apply a co-insurance clause (e.g. you pay the first 25% of any claim as an excess, which means that if you have a £50,000 loss, you could have a £12,500 excess to pay). Some also state (either in place of, or in addition to the co-insurance clause) that they will not provide any theft cover unless the vehicle is kept within a secure locked compound or building between the hours of 9pm and 6am (some insurers do make a few exceptions). So do check your own cover.
Fair Presentation of Risk (again!)
What Theft from an Unattended Vehicle cover is not normally there to cater for, is where you use your vehicle as the primary storage location. That is, where your equipment is not kept in your home or premises when not in use or where you’re not out on a job, and is instead stored in the vehicle overnight, usually outside your home.
Having gone through the usual questions about 5-lever mortise deadlocks and alarms at the premises without a mention, it’s a bit of a curve-ball to be asked “Do you cover Theft from an Unattended Vehicle” at the end of the quote, only to query this and then be told that the kit is never in the premises, but is in a vehicle parked on the road. That’s a VERY different risk indeed and should be disclosed at the outset as part of the Fair Presentation of Risk, and certainly not as an after-thought.
It’s not ‘Game Over’ if this how you store your equipment, and it doesn’t automatically follow that you’ll end up with a higher premium or excess, although this is of course a possibility. It depends on the individual risk presented and how you manage it.
So, what if you have assumed that because you have Theft from an Unattended Vehicle cover you can keep your equipment in your van, rather than in your premises, and you haven’t discussed this – what could happen in the event of a claim?
Well, here we come to another important part of the Insurance Act 2015, “Proportional Remedies”. This firstly looks at whether your failure to provide this information was deliberate or reckless.
Let’s assume, for the sake of argument, that it wasn’t.
Then the insurer has two options, based on the new information that has now come to light:
- If they would not have taken your risk on, they may cancel your policy ‘ab initio’ (literally “from the beginning”), refuse to pay all your claim, but they would refund your premium to you.
- If they would have taken your risk on, but charged twice the premium and applied a higher excess or co-insurance clause, then they can deal with the claim under the cover purchased (i.e. pay half the claim, as you’ve only paid half the premium), PLUS still apply the excess or co-insurance clause that they would have applied. This could leave you seriously out of pocket.
And, what if it was deemed that the failure to provide information was deliberate or reckless?
Then, the insurer only has one option:
- Your policy may be cancelled ab initio, the claim refused entirely, and they may keep the whole of your premium too.
Whichever proportional remedy was applied, you would then have a duty to disclose this to any new or prospective insurer, which may influence their terms in accepting or rating your insurance.
How MediaRoo can help
Apart from the admin of issuing the documentation and binding cover under our Freelancer scheme, MediaRoo acts as your agent, not the agent of the insurer. As I mentioned before, my job is to protect your business as best I can.
This means having a ‘warts and all’ approach to looking at your own risk, and for you to search for and supply information on what you know, or ought to know, about your business and the people working in it.
Working together, this ensures the best possible outcome in the event of a claim, a fair premium for the risk, and helps you comply with your obligation to provide a Fair Presentation of Risk, so that your policy can operate correctly, should the worse happen.
If you are a camera or sound person, and would like some independent advice and an alternative quotation for your Freelance business, please give me a call on the number below, or drop me a line, and I’ll be more than happy to have a look for you.