The client purchased 17 main road sites around the north east of England and southern Scotland. It offered roadside replacement of tyres and exhausts. On paper the £ 17 million purchase looked good, profit margins averaged 11% per annum, claims ratios were low, and there was an acceptable level of staff turnover.
InSolutions was asked to trace the insurance history and found of the 17 sites:
4 sites were purpose built with vendors only having purchased the land
8 were purchased from a major British tyre manufacturer
5 were purchased direct from the owners of garages
Of the 8 sites which had previously been owned by the tyre company, it had in turn bought 4 of these businesses from garage owners, 1 from a timber merchant, and 2 others from a supplier of coal and central heating oil.
Out of the 17 sites, the vendors had assumed the past liabilities of 14 companies running an assortment of businesses, with the majority of these businesses being potential producers of asbestos-related claims.
Aside from having to trace 14 separate insurance histories for the client we suggested that they arrange underground surveys of all sites. Of the 17 sites they owned, 8 showed that underground oil storage tanks were still in situ, with three such tanks being within 800 yards of a local river. The cost of removal of the tanks, where possible, was estimated at £2 million, although it would be impossible to move one of the tanks without demolishing the present day buildings.
Fortunately, through InSolutions the client now has Employers’ Liability (EL) coverage back to the 1960s for 7 of their companies, and back to the 1970s for another 5. Turning to Public Liability (PL) InSolutions located cover for 4 of these companies, but only with limited degrees of success.
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