Marrs Insurance Brokers

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Marrs Insurance Brokers is a trading name of The Not Too Boring Company Ltd. Registered in England & Wales, Registered No. 09026225.

Marrs Insurance Brokers is an appointed representative of TEn Insurance Services Ltd which is authorised and regulated by the Financial Conduct Authority.

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SPRING/SUMMER 2020 - Coronavirus Special - Update

As we enter our 3rd month of lockdown, we’ve become accustomed to shouting to neighbours across roads unsullied by vehicles, sharing the odd glass of wine at a suitable distance and putting the world to rights at 2 arms’ lengths (Note, putting the world to rights never stops, even during a pandemic).

It’s a remarkable truth that we humans adapt to and endure just about anything the Gods throw at us, though it is without doubt also true that knowing good wine and good friends are still within reach or virtual reach makes a huge difference, as does having a family that can tolerate each other during these weeks of enforced confinement. I read that divorce in China skyrocketed since the pandemic and it’s not hard to see why. I’m blessed that my family are easygoing, tolerant of my faults and never shout. Or so they often tell me.

The insurance industry is taking a beating – mainly from Action Groups representing the Entertainment and Leisure industry which supposed they were insured against everything including Covid-19 and I’m reading the fors and againsts of all the arguments.

My comment on all of this is that firstly, no insurance company would consciously offer cover for Business Interruption due to a Pandemic. The basis of insurance is that the many policyholders pay so that the few claimaints receive. This tenet hasn’t changed since merchants established themselves in London coffee houses to ‘underwrite’ ships and cargoes over 320 years ago.

Secondly, and this is possibly more contentious as it can never be tested, how many businesspeople would have bought Pandemic Insurance had it been available?

Suppose you were a restaurateur, struggling to compete with growing wage bills, competition, the odd bad review, only to have your Broker offer a swathe of extensions at last September’s renewal. “What?” you say, “You want me to take out Pandemic cover for an extra £2,000 + tax?!! You must be joking, what are the chances of that happening? No thanks pal!”

Now, an interesting argument which I have used often with clients is that if they’ve never had a claim for their motorcycle being hit by a hippopotamus whilst riding it underwater, then from an underwriting perspective, it means this is probably due to happen any minute.      

Obviously I could no more sell them submersible motorcycle river-horse cover than I could sell them Business Interruption cover for a pandemic so the point is pure conjecture but I do wonder had Business Interruption cover following a pandemic been available last year, how many would have bought it? I have no idea how much it would cost either. In 1992, following the Baltic Exchange bombing, insurance companies excluded Terrorism from their list of perils and it took the Government to work with the industry to establish the Joint Venture Pool Re which enabled this peril to be insured once more.

Since then the same situation has arisen with Flood risks in certain areas of the country. As the changes in our weather system bring repeated flooding to many areas, another joint venture between HM Government and the insurance industry has provided peace of mind for people all over the UK including Yorkshire, Cumbria, Cornwall and the South Coast.

Worldwide, the Coronavirus pandemic has cost an estimated $7.8 trillion (for the unsure, we adopted the American version of billions and trillions back in 1974 when Dennis Healey was Chancellor, so that’s a mere $7,800,000,000,000 and counting), so no group of insurers alone could pay this bill and then where would you be? No chance of getting your crushed and waterlogged motorcycle paid for then!

We’ll keep you posted of developments as we hear.

In the meantime, keep well and stay safe.

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