Compass are specialist providers of insurance to the holiday and residential park industry and have over 40 years’ experience in the sector.
We provide solutions for all of your insurance needs from tailored cover for your park buildings, infrastructure, facilities, machinery, vehicles, employees and liability to bespoke schemes for your private owners and customers as an introducer or appointed representative.
NOW IS THE IDEAL TIME TO CHECK YOUR business is adequately insured.
The winter months are traditionally that time of year when many parks take the opportunity to undertake some maintenance and make changes, with projects ranging from small tidy ups and cleaning to major renovations and new ventures. Unless your policy is due to renew in January or February, you probably don’t have insurance on your list of maintenance or improvement.
However, it’s a good idea to add it, as reviewing your policy and checking everything is in order, is an essential job ahead of the 2023 season. You don’t have to check every last detail however here are a few things to have on the list.
ACCURATE VALUES
With the cost of materials, parts and labour increasing at record levels, and the cost of replacement caravans and lodges still high, you should make sure that the amounts you have for your Buildings, Hire Fleet and Sales Stock are all adequate. The Building Cost Information Service (BCIS) shows that the cost of commercial buildings went up 9.5% in the 12 months to November 2022.
So that is an indication of just how important it is to regularly check them. If you have a Compass Insurance policy with us and want to find out about a professional valuation service, then speak to your Regional Account Manager or Compass contact, or alternatively check with your insurer who may offer their own valuation service.
The same applies to Contents in terms of inflationary increases, making sure you have everything adequately listed and covered is essential. If you’re planning to diversify in 2023, add new attractions and activities then it’s important to make sure your insurance policy reflects them.
THE COST OF REPLACEMENT caravans and lodges remain high so be sure your policy figures add up.
MAJOR WORKS
If you’re undertaking any major improvement or project works then it’s a good idea to let your insurance company know, and you definitely need to update your policy once the work is complete. One of the most important parts of your policy are the description of your business and the activities we have listed for you.
This needs to accurately reflect the type of business and park you are and the things you do. Don’t forget about your employees and wage roll, if they are likely to be higher in 2023, or if you’re taking on new people then that will need updating. Turnover is another crucial element of your sums insured, it relates to both the Public Liability and Business Interruption sections.
Is your park tired of doing the admin for insuring customers’ caravans and lodges? Why not take a step back from insurance and focus on your core business? Let Leisuredays do it all.
With over 70 skilled Advisers, we’ll look after your customer’s insurance needs 7 days a week. Plus our secure website allows customers to quote, buy, and renew their policies online.
We’ll maximise customer take up to deliver healthy insurance profits for you!
ABOVE: Storm damage was the top holiday caravan insurance claims last winter. Pic Compass Insurance
Bryony George reports on the most common holiday park insurance claims…
Specialists serving the industry have confirmed storm damage was the top holiday caravan insurance claim last winter, accounting for 20 per cent of all holiday caravan claims. Other common claims were escape of water and boiler damage, often caused by frozen pipe damage, highlighting the importance of draining down static caravans or lodges from November until mid-March, if they’re not in use. But one of the biggest risk facing most park operators remains liability claims, primarily from members of the public but also from employees. It is now no longer unusual to see claims north of £10m and there are numerous examples of claims no approaching £30m. “Park operators need to be mindful that their limits of indemnity for such incidents are set at the time of the incident but the eventual settlement, assuming the Park is found to be liable, is set based on the regime at the time of settlement,” advises David Moffat, Associate Director of specialist insurers, Wilby. “Given such claims take a long time to bring to a conclusion a Park could find itself without enough cover and they would be liable for any shortfall.”
LIFE CHANGING
David explains: “Insurers are rather focussed on this area following various changes to the Ogden Rate by the Government, which is a rate used by insurers and solicitors to calculate payments on serious, life changing, injuries, i.e. incidents involving paralysis. “As an example, a claim involving serious injuries say seven years ago but settled three years ago might have been settled for £3m - £4m so if the Park had £5m Public Liability cover at the time of the incident they would be fine. “If the same incident was settled today using the current Ogden Rates the settlement might be £12m to £15m and given the park only had £5m cover at the time of the incident they would now be facing a rather large bill which could threaten the very existence of the Park,” says Andrew. He adds: “It should be noted that the chance of a park operator causing the sorts of injuries needed to get to these levels remains as remote as it ever was but the chance of not having sufficient cover has increased considerably and as such operators need to review their cover now as they aren’t in a position to buy extra cover once the worst has happened.”
ABOVE: Flooding is one of the most common causes of insurance claims. Pic. Leisure Days
ABOVE: Insurance covers need to be proportionate to a park’s individual risks. Pic Leisure Days
PARK SPECIFIC
Another growing area of cover that operators need to consider is Cyber Insurance. The sorts of cyber policies now on offer covers much more than simple Data Protection issues. It will provide some cover for other things such as Business Interruption or Loss of Revenue if the Park Operators Computer System is hacked or affected by a virus or other Cyber incident. Traditional Business Interruption cover is based on a physical loss, such as fire, and would generally take no notice of the loss of revenue if the computer system was badly affected at the height of the summer. There are specific policies that will provide cover for data and system recovery, cyber extortion, privacy and network security liability, cyber-crime, telecommunication fraud amongst other areas of cover. Of course, no two holiday park businesses are the same, which means that every business’s insurance requirements are unique. Park owners should therefore seek out specialist cover specifically tailored to suit the needs of their individual business. Comparing what’s on offer from different providers will also be a useful exercise. Some covers, for example Employer’s Liability and Motor cover, are not only essential but are a legal requirement. Other covers need to be proportionate to a park’s individual risks and liabilities. Paula Hudson of Compass Insurance, who offer cover through its Binnacle scheme, advises: “So, a small park with no central facilities may find themselves well protected by a park-specific commercial combined policy. “Conversely a larger, multi-amenity park may need to increase some of the standard covers on offer by purchasing ‘excess layers’ such as property, public and employer’s liability cover. Common sense would suggest that the more facilities and services offered by a park, the higher the number of risks they may face, Paula points out. She continues: “Equally the nature of the service will dictate the size and seriousness of the risks that may apply. “For example, parks with a swimming pool will face more risks than a park without one; parks with a multi-depth pool featuring water slides and a wave machine will face more risks than parks with a small, single-depth pool that has no add on features.” Park owners and managers have a legal responsibility to manage risk, for example under Health & Safety Legislation, with some on-site facilities and operations requiring particularly careful supervision. Says Paula: “In the best-case scenario, a park owner will be able to provide comprehensive documentation to show that they had taken all reasonable steps to assess, manage and mitigate the associated risks. “Alongside other pertinent information, this documentation may need to be examined by a regulatory authority, such as the HSE, as well as the park’s and claimant’s insurers and solicitors.” Coastal parks, advise Leisure days, can be most at risk from flooding and stormy weather, as well as those near rivers and in exposed areas. Leisure days works with more than 1,000 parks who, in turn, introduce their customers to protect their business. “We handle thousands of customer claims, which range from simple accidental damage, to fires and floods that can wipe out multiple holiday caravans in one event,” says Gareth Walker, Head of Leisure days insurance. “Our most common customer claims are often weather related. Remember the Beast from the East, Storm Emma and Storm Doris in 2018 and then the severe flooding in 2015? “These weather events led to a huge spike in static caravan insurance claims for storm damage, flooding and damage caused by frozen pipes – highlighting the importance of park customers having the right level of specialist insurance cover. Holiday parks are continually checking their customers have adequate insurance in place and will write this into their park terms and conditions. Making sure customers have insurance gives parks re-assurance damaged units will be fixed, or removed and replaced, keeping the park looking its best. Choosing to work with an insurance partner can also boost income streams with parks earning insurance commission in return for introducing customers to the policy. Park operators need to look for specialist insurance cover for their customers, making sure all customers are adequately insured and that they’re dealing with a specialist and reputable insurance provider. There are some specific policy benefits worth looking out for. ‘New for old’ cover is essential for when disaster strikes and will make sure customers have the right sums insured to replace their damaged, written off unit with a brand new one. The main perils should also be covered, such as fire, flood, storm and theft. Look for benefits such as debris removal, so any badly damaged units can be removed quickly from your park, as well as pay-outs for re-siting and re-connection costs, and also use a provider who has experience of settling claims quickly, with prompt repairs and replacements.
ABOVE: Customers are encouraged to seek appropriate cover.
ABOVE: Every park is individual and its location will influence the risks that may apply.
SELF HELP
Caravan Guard clients are always issued advice on how to take precautions to protect their pride and joy during these colder, winter months, as well as how parks can help owners drain down and advise on lagging any exposed pipes or adjusting boilers appropriately. It’s also worth checking that owners have taken any outdoor furniture and other outside equipment inside to avoid any external damage when windy weather strikes. Customer or parks have to report the claim first. If it’s a big event then the park would tell their Business Development Manager and we would arrange for specialist loss adjustors to attend the park and assess the damage. We’re well versed in handling multiple losses on parks after severe weather events such as flooding or storm damage. Our dedicated Claims Liaison Team make sure customer claims are handled quickly and fairly, keeping everyone informed along the way. The team also won Claims Team of the Year at the UK Broker Awards 2019. To make sure all park customers have extensive insurance cover in place so they are fully protected should the worst happen and to encourage customers to keep their unit in a good state of repair. Look closely at an insurance policy’s features and benefits, as well as the support you receive from your insurance provider, throughout the year, and in the event of a claim.
ABOVE: Don't slip up on your insurance cover.
ABOVE: Leisuredays works with more than 1,000 parks.
LIABILITY CLAIM
There are some claims that tend to affect parks more often than others. For example, the Compass claims team won’t be surprised to see claims for frost and water damage on holiday caravans over the next few months. Similarly, we may expect to see some theft-related claims, which tend to spike during periods of no occupancy. Equally, there are some claims that can be no more predicted than they are likely to occur on the same park again anytime soon, for example the ‘tornado’ wreaked havoc on one of our customer’s parks a few years ago. This varies greatly. The best-case scenario for a park owner or a caravan owner is that if they need to make a claim, the claim is approved quickly and paid-out in full. However, as aforementioned, this will always depend on whether or not the park has purchased adequate cover in the first place. If the insurer will need evidence to defend a claim such as evidence of risk management in the event of a liability claim being made against the park then the outcome of the claim will also depend on whether or not relevant risk management, operating procedures and systems, training etc are in place and have been adequately documented. Park owners are encouraged to see beyond price. For example, a broker’s approach to claims in times of crisis is especially important. The Compass Major Incident Hotline sets the benchmark for crisis response. Compass Insurance’s 24/7/365 disaster line is available to all of its park business customers and those that operate Compass’ Appointed Representative (AR) and Introducer Appointed Representative (IAR) schemes. Parks with private owners may also wish to consider working with an insurance provider to introduce or sell holiday caravan cover to their customers via an IAR or AR Scheme, advise Compass. Finally, it is important for park owners and managers to note that a condition of their park’s commercial insurance policy is likely to be that they must keep buildings and facilities in a ‘good state of repair’. If a claim is made and the loss adjuster believes that the affected building/facility and so on, has not been maintained adequately, this may lead to non-payment. It could even lead to an investigation by the Health and Safety Executive. To avoid any slip-ups, operators are advised, in every instance, to consult with a specialist insurance supplier.
ABOVE: A growing area of cover that operators need to consider is Cyber Insurance
ABOVE: Specialist holiday park insurance is vital to ensure adequate cover.
Luckily, 80-year-old park home resident Alan Smith was not injured in a devastating fire that wrote off his Essex Park Home and destroyed all possessions and contents inside. Even more luckily, Mr Smith had the extensive cover and benefits of residential park home insurance policy with leading specialists, Leisuredays, one of the leading holiday caravan and park home insurance specialists in the UK The Leisure days team was able to quickly pick up the pieces for their customer by co-ordinating the removal of the badly damaged property and then helping with the ordering of a brand new park home, replacing his contents and having a brand new unit sited, connected to services and creating suitable access. “Our team is best at making customer insurance easy,” says Gareth Walker, of Leisuredays whose in-house claims liaison team worked closely with the loss adjusters and a specialist team at our underwriters, RSA, to handle this high value claim. “The expert claims team always works hard with all parties to make sure claims are handled efficiently, guiding customers and park owners through the process so claims are settled as quickly as possible,” Gareth continues. “In this case, the park home owner was also quickly given some money to pay for replacement clothes and toiletries as most of his possessions were damaged in the fire.”
As customers await their replacement park homes, a robust insurance policy can also pay for emergency short term accommodation for family and pets that usually live with them. Other costs involved in this claim include demolition and site clearance, local authority charges for delivery of the new park home and the cost of a new park home. Customer insurance rates vary from park to park. When calculating a premium, insurers take into account the type of unit being insured, its value and the value of its contents.
One of the best ways to reduce the cost of your insurance is to demonstrate that your business has a responsible health and safety practice in place.
Risky Business
There’s no doubt about it, insurance is complicated. The amount of jargon associated with the subject can be off-putting for many, and can make finding the right insurance product a difficult and complex process.
However, choosing the right insurance partner can be the difference between success and failure in the event of a catastrophe.
Holiday parks offer a unique blend of risk to the insurance market. By their very nature, parks are exposed to the elements, presenting an accumulation of challenges to the insurer.
According to Compass Insurance, storm damage is the highest claimed peril on holiday and caravan parks, followed by accidental damage and escape of water or burst pipes. These perils make up 50 per cent of the company’s received claim volumes. The remaining 50 per cent is made up of theft, liability, fire, impact, and subsidence claims.
“We have discovered that although the needs of individual park owners vary, there are three distinct elements of essential park insurance to consider – material damage, liability cover and financial protection,” explains Dave Sheath, managing director at Compass.
“Essential holiday park insurance should cover buildings and structures, hire fleet and sales stock, underground services, contents, loss of rent or alternative accommodation, Business Interruption, Public Liability and Employer’s Liability.”
Holiday parks offer a unique blend of risk to the insurance market. By their very nature, parks are exposed to the elements, presenting an accumulation of challenges to the insurer.
In addition to ensuring the essential areas of cover are in place, careful consideration should always be given to the sums insured declared. By under estimating sums insured, to potentially save on premium costs, park businesses could be exposed to risks by being underinsured.
Appointed by The British Holiday & Home Parks Association (BH&HPA) to serve the interests of its members, Compass offers two bespoke policies; a Compass General policy and a Compass Park Owned policy. As well as providing essential cover, the bespoke policies also of a range of products that can be tailored to meet the needs of the park, including Contractors All Risks, Fidelity Guarantee and Employment Practices Liability, Environmental Liability and Cyber Liability.
“Operating in a changing environment will mean your business is faced with new and emerging risks,” says Dave. “With this in mind, you may want to consider new policies. It is worth considering all options available as the cost of extending cover or purchasing new risks may not be as expensive as you think.”
Talk to Peter Heffer of Lorica Insurance today about their fresh approach to insurance claims.
Don't Slip Up On That Inevitable Accident
Accidents happen. Making the best of them can lead to a happy customer who will come back to your park time and time again.
We asked Peter Heffer of Lorica Insurance Brokers for his insight into how, despite common belief, insurance claims can improve the customer experience.
“All the best efforts in the world won’t stop accidents, it is a fact of life that they can and will happen,” advises Peter. “We can do our best to avoid them but at some point they will occur. Insurance companies accept this fact and make provision within their cash reserves.”
Peter advises: “There is a way to approach claims for injury to third parties (and employees) where the insurer takes a much more proactive stance shortly after the accident has occurred.
“The concept is based around customer care, where the insurer contacts the injured party as soon as reasonably practicable to ask how they are, is there anything they need, would they like someone to arrange various forms of care for them such as physiotherapy and the like.
“Ultimately this early intervention makes the customer feel that they are being treated fairly and they may not bring a formal claim against you, or should they do so then the legal fees are far lower as most of the investigative and medical attention has already been addressed,” adds Peter.
“Some claims won’t even involve a lawyer as the customer has built up a rapport with the insurance company and is happy to work with them.”
Contact Peter today to learn more about Lorica’s fresh approach to insurance matters and how it can benefit your business.
The World of Park & Leisure Homes Show will return once again to the beautiful grounds of Stoneleigh Park in Warwickshire in 2014.
Following the tremendous success of this year’s show, the 2014 dates for the diary are: Friday 6th June & Saturday 7th June, 10am till 5pm and Sunday 8th June 10am till 4pm.
There will also be a new trade preview day on Thursday 5th June, from 10am till 5pm. Over 40 show homes will be available to view, plus the opportunity to meet many of the UK’s leading manufacturers and find out more on hundreds of parks across the UK. Leading providers of garages, decking, chassis, coatings, hot tubs, insurance and finance to name but a few, will also be exhibiting at the show.
As always, entrance and parking at the show is free.
INSURANCE SPECIALISTS
SMART INSURANCE
The World of Park & Leisure Homes Show will return once again to the beautiful grounds of Stoneleigh Park in Warwickshire in 2014.