Insurance renewal / refusal

Question

Was it here that I saw a previous question / answers about the impact of a CCJ on PC insurance renewal?

The question on the Statement of facts form asks:

Can you confirm that the proposer(s), or any partner, or any director, or any officer have:

a) never been declared bankrupt

b) no outstanding CCJ

c) never been been officers of a company declared insolvent

d) never been convicted / charged with a criminal offence

e) never had any insurance proposal declined

Obviously the form uses terminology which is tailored to a commercial sector rather than a public sector but I seek to clarify (if possible) do the questions apply to ALL Cllrs as well as council officers?

I'm starting to think the discussion may have been via FB when someone posted a link about a PC having their PL insurance revoked or refused because a Cllr had an undisclosed CCJ...

Any thoughts?

Answer 1

Unable to help with whether it was here but it seems that such information is irrelevant to granting insurance. Councillors are not officers nor employees and meeting the legal requirements for election make such an enquiry superfluous and overkill. Of course without knowing what the insurance is required needs to be known.

Comments

Well, it seems you are right…

“Verbally” the insurers have said they aren’t interested (in a manner of speaking)

I’m naturally dubious that the tune may change if/when a claim is submitted but at least I’ll be in a position to be sure I’ve done my best before the event…

Answer 2

Clevedon Town Council in 2023 very publicly encountered issues related to Insurance. It seems the provider was not comfortable providing coverage owing to fact a elected member had outstanding CCJs related to a business he/she was involved with. It seems NALC & others made representations on behalf of the body and insurance (minus public fidelity guarantee) was re-instated.
https://www.bbc.co.uk/news/uk-england-somerset-66520019

Comments

That's the one I was thinking of!
I just found it on FB and itv:

 https://www.itv.com/news/westcountry/2023-08-17/council-speaks-out-after-closing-public-outdoor-spaces?fbclid=IwAR185AS1sYfpDF1ejHGzw9tiN2UWgQwPCGwDeVeYm_0PeHAcbmBz3F4Q1yc

The questions on the renewal document from a major insurance provided to PCs states:

Declaration
Renewal will be negotiated on the basis that any of your officials, trustees or committee members have not:

1.  Been convicted or charged (but not yet tried) with a criminal offence other than a motoring offence

2. Received an Official Police Caution in respect of any criminal offence other than a motoring offence

3. Been the subject of any county court judgement (CCJ), winding up order, insolvent liquidation or administration or have made any composition or arrangement with creditors or protected trust of deed or deed of trust in Scotland

4. Been a director or partner of a company which has gone into insolvency, liquidation, receivership or administration or protected trust of deed or deed of trust in Scotland

5. Been declared bankrupt or been disqualified from being a company director

6. Been prosecuted for failure to comply with any Health and Safety or Welfare or Environmental Protection legislation

7. Had an Insurance proposal declined, renewal refused, insurance cancelled or special terms applied If any of the above statements are inaccurate please provide details below

The problem facing the PC seeking renewal is that it currently has a Cllr subject to a police investigation for an serious offence (that could go either way but the very fact that the investigation is taking place should (IMHO) form a part of the decision making process of the PC prior to committing public funds AND should probably be a 'fair disclosure' to the insurance company.  On top of that (as if that wasn't already enough) the PC has 5 ½ years of a 6 year CCJ term still to run.
Personally, I believe both elements should be 'fair disclosure' to the insurance company if only to guard against the potential for a possible future claim being rejected or the policy invalidated (probably when it needed most!)

Answer 3

The question is fairly standard for larger councils and usually in connection with fidelity guarantee cover.  I have no personal experience of having insurance refused but I did hear that special terms were imposed when the response indicated that a councillor did have "history" of this type.  It shouldn't impact on any other insurance covers.

Comments

Yes, it is what I would expect...  Insurance underwriters operate on a risk metric (just like driver insurance - area, usage, overnight storage, driver history etc) All factors have to be subject to fair disclosure otherwise there is a risk of refusal when a claim is levied.

In the circumstance I am interested in, there is a CCJ extant against the PC and a current police investigation believed to be in response to an allegation of criminal damage and assault on PC property.

If I were the underwriter and those facts were not disclosed. I think I'd be considering refusing a payout or increasing the premium to cover the potential risk...

From the PC perspective, I would say it would be negligent NOT to disclose prior to renewal since there is a responsibility to act appropriately when spending public money.