Commercial Insurance
Case Study 2:
A consolidator of small construction companies (£7-10m each) purchased a rapidly growing builder. Inadequate Due Diligence by one of the big four insurance brokers failed to notice end of year adjustments had not been carried out for the last 3 years. Warranties did not cater for the subsequent £500,000 additional premium generated by these adjustments. We identified these adjustments and renegotiated the package.
Case Study 3:
Legionella is classed as a long term pollutant and thus is normally excluded from Public Liability policies - especially important in Property Management/Education/ public facing businesses. Therefore a fatality or closure impacting on profitability would be excluded from any claim payment. We would offer the client cover.
Case Study 4:
A major book retailer with heavy bank borrowings (and subsequent warranties) failed to notice a 50% co-insurance clause on assets and profits cover, i.e. insurers would only pay 50p in the £1.00 in respect of the amount claimed. Insurers imposed restrictions when the client declined to install a sprinkler. Given values at risk, we questioned if the business could have survived a major loss and advised that the Finance Director may have been personally responsible due to corporate negligence. We identified this as one of a number of deficiencies and changed insurers.
Case Study 5:
A company with a turnover of £75m and a closed Final Salary Pension Scheme. The company wanted to sell, but understood that before it could realise its value, it must first put in place arrangements to contain and give balance sheet certainty over the costs of the Pension Scheme. Valuations/estimates of the deficit varied between £660,000 per annum or £4.2m upfront. We quantified this and worked with the client to agree a plan to provide certainty to the cost and implementation of strategy.
Case Study 6:
Two owner directors are looking to retire and the Company is in the process of undergoing an MBO. The company has a Final Salary scheme with a deficit and the assets of the business only marginally exceed that deficit. The retiring directors do not wish to remain responsible for the scheme. The MBO team is highly geared and cannot see how take on board the scheme or obtain approval to do so. We worked with the trustees to review the covenant of both parties, being careful to manage any conflicts of trustees being existing business directors or part of the MBO team. With this information we negotiated with the Pensions Regulator on behalf of the trustees and secured an agreement whereby the MBO team could accept the responsibility of the scheme despite having no assets. This clearance from the Pension Regulator then protected the existing directors from being subject to a Financial Support Directive should anything go wrong in the future. Without this clearance, the existing directors would never have shrugged the responsibility of the scheme until all benefits had been settled.
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