We are just over a week on from the historic vote of the United Kingdom to leave the EU, but from the perspective of many of our clients, the effect of the vote has directly impacted their business way ahead of our physical departure from Brussels.
The volatility in markets, in particular currency markets, may have a direct impact on business insurance, much of which MOFS covered in recent publications “Don’t Get Caught Out” for commercial insurance customers by clicking here and for property owners insurance by clicking here.
The clients who rely on EU imports of raw materials will be seeing significant cost increases resulting from the weak pound and in the wider sense where materials are being imported from the rest of the world, a general reduction in the pound will in turn result in cost increases.
Clients holding Euro or Dollar denominated assets will now be underinsured, which in turn, due to the increased costs referred to earlier, mean that sums insured on machinery, stock and buildings may all need to be reviewed and in particular, business interruption sums insured due to the change in cost base.
The credit risk of customers and suppliers in relation to the volatility of the market should also be considered as part of an overall review of a clients position so reliance, suppliers and customers could warrant specific extension to business interruption cover.
There is no immediate change to the consideration of travel within Europe in that the EHIC medical costs reciprocal agreement will stay in force until the UK formally leaves the EU, but in the longer term if this scheme is set aside, there may be an effect on travel insurance.
If you have any immediate questions or concerns over your own business insurance then MOFS will be able to help and we can be contacted by using email@example.com or by dialling 0151 255 2600.