Tag Archives: Employment-Related Liabilities

Many companies in the UK are facing historic Employers Liability (EL) claims often driven by asbestos claims. Due to age of these claims and the diversified nature of many companies they are unable to trace their historic EL policies.

Can you locate your historic insurance coverage?

Due to the age of these documents, companies all too often find they are unable to trace the coverage they need. Company mergers and broker changes compound this inability. The net result is files are moved and forgotten, and personnel with crucial institutional knowledge retire or relocate.

Insurance archaeology and legacy research service Marsh Risk Consulting Insurance archaeology and legacy research service Marsh Risk Consulting InSolutions, Marsh’s dedicated insurance archaeology practice, can assist companies in locating lost policies. Working in close collaboration with clients, our experienced archaeologists can locate historical insurance assets through comprehensive research in areas such as:

  • Research and internal reviews of historic corporate records and archives
  • Interviews with current and former personnel such as risk managers, finance directors, and corporate counsel
  • Site visits to review clients archives
  • Research and contact with former brokers and insurers
  • Identification and contact with various outside sources such as government entities, local records offices and accounting firms.

Getting started

Prior to any research project our archaeologists will contact or meet with you to thoroughly discuss the scope of the project, determine coverage gaps, obtain additional information on the history of any pertinent companies (including predecessors) and determine what research may have already been undertaken. After completing these initial steps, our archaeology team will provide a comprehensive proposal detailing specific research steps to find lost policies.

Case study 1

Our client, a publishing house, had acquired another publishing company and then received a number of legacy employers’ liability claims for printing works that it was not aware of via this acquisition.

InSolutions reviewed the claims papers and was able to:

  • Redirect a number of the claims as the printing works in question had previously been sold to a third party
  • Locate the (EL) insurance for the balance of the claims for the majority of the period in question

Due to our assistance, the client has been able to redirect these claims to third party owners or to the relevant legacy insurance carrier thus potentially saving hundreds of thousands of pounds.

Case study 2

Our client purchased a regional tyre and exhaust chain. The profit margin was around 11% per annum, claims ratios were low, and there is an acceptable level of staff turnover.

After the purchase, they received a number of legacy claims and InSolutions was asked to trace the insurance history.

We found:

  • Eight sites which had previously been owned by a tyre company, which in turn bought four of these businesses from garage owners, one from a timber merchant, and two others from a supplier of coal and central heating oil
  • For the sites the vendors had assumed the past liabilities of 14 companies ranging from an assortment of businesses, with the majority of the 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, eight showed that underground oil storage tanks were still in situ, with three such tanks near a local river. The cost of removal of the tanks was estimated at £2 million.

Fortunately, through InSolutions the client now has EL coverage back to the 1960s and public liability cover for some of these companies.


In October, the Court of Appeal in London handed down a long-awaited judgment in the Employers’ Liability Policy Trigger litigation (also known as Durham v BAI). The decision of the Court of Appeal, which reversed the effect of part of the first instance High Court judgment, has given rise to significant uncertainty in this complex area of law. A number of aspects of the decision are likely to create coverage issues for policyholders in relation to claims under employers’ liability policies in relation to mesothelioma, and possibly also other diseases, and may lead to a review of the law in relation to public liability policies.
This seminar will cover both legal and practical issues that will need to be faced by corporate policyholders while the uncertainty created by the Court of Appeal’s decision remains.

Topics Covered:

Introduction: The significance of ƒƒDurham v BAI
Anne Ware, Partner, Covington & Burling LLP

An analysis of the Court of Appeal’s judgment and the legal implicationsƒƒ
Richard Mattattattick, Of Counsel, Covington & Burling LLP

Practical implications of the decision, including the importance of locating ƒƒpolicy wordings, claims reporting issues, market reaction, and practical examples
Bill Kirkhamam, Occupational Disease Claims Practice Leader, Marsh; and
Ian Pelhamam, Senior Vice President, InSolutions Ltd (a Marsh company)

For more information please contact Ian Pelham


London,

Marsh, the world’s leading insurance broker and risk adviser, is advising organisations to examine their potential exposures to asbestos-related claims ahead of a predicted peak in 2016.  Marsh’s advice follows its publication of new research on actual mesothelioma cases before the Queen’s Bench Division of the High Court of Justice in London which highlights the range of UK occupations and industries affected by diseases such as mesothelioma.

The research reveals that only one-quarter (27.5%) of the claims analysed were found to involve organisations operating in the mechanical, electrical and process engineering industries. The rest of the cases examined emanated from claims in the chemicals industry (11%); construction (7.5%); metals and minerals (6.5%); and the electronic products, electronics and IT hardware sector (6.5%). The final settlement values in the cases reviewed ranged between £50,000 and £200,000.

Over a third (36%) of the cases examined were from 1956 to 1960, making it likely that initial exposure would have been 40 years prior to the effective start of a claim. This indicator, supported by data from the Health and Safety Executive which indicates UK mesothelioma claims are expected to peak in 2016, suggests that it is likely that affected employees will have been exposed to asbestos between the late 1960s and mid 1970s.

Marsh’s research also suggests that widespread publicity surrounding mesothelioma claims is impacting on the number being made by dependants which, at 47%, is almost as many as the number instigated by principals (53%).

Marsh’s new White Paper, Mesothelioma Claims, which was produced in conjunction with the University of East Anglia (UEA), examines 15% of the court cases commenced between September 2006 and October 2007 in the Queen’s Bench Division of the High Court of Justice in London and assigned to Senior Master Whitaker, the Senior Master of the Supreme Court of England and Wales, Queen’s Bench Division, Royal Courts of Justice, and the Queen’s Remembrancer.

Ian Pelham, who oversaw the research project with UEA and is a Managing Consultant at InSolutions, part of Marsh’s Risk Consulting Practice, commented: “Marsh’s research highlights that few, if any, industries are immune to the  possibility of mesothelioma claims arising from past employment practices.

“Mergers and acquisitions in the second half of the 20th Century, followed by a contraction back to ‘core business’, has resulted in many organisations now being unaware of their potential exposures to asbestos-related claims.

“With the fast track approach to claims, championed by Senior Master Whitaker, in place in the courts companies now have a very limited time window to locate their legacy employers’ liability coverage, once they received notice of a potential claim.

“If companies have not yet investigated their potential future liabilities, it would be prudent to do so now. They should ensure that they review and understand their corporate histories and that, where available, they catalogue copies of their old employers’ liability policies and store them safely. If a company becomes aware of a potential gap in its insurance record relating to a site that might give rise to a mesothelioma claim, it is advised to investigate whether the insurers from that period can be found.”

Terry Kendrick, MBA Programme Director, Norwich Business School at the University of East Anglia, said: “Supporting Marsh with data analysis on this project has provided real insight for our MBA students studying strategic risk management. The startling issues around the potential growth and value in mesothelioma claims have provided a real and vital case for them to study.”

Marsh’s White Paper, Mesothelioma Claims, includes commentary from Senior Master Whitaker, Richard Mattick, of Counsel with the London office of law firm Covington & Burling LLP, and a case study of Polestar Group, one of the UK’s largest printers of magazines and newspaper supplements. To obtain a copy, please contact vivian.x.wong@marsh.com or visit: www.marsh.co.uk.

About Marsh

Marsh, the world’s leading insurance broker and risk adviser, has over 23,000 employees and provides advice and transactional capabilities to clients in over 100 countries. Marsh is a unit of Marsh & McLennan Companies (MMC), a global professional services firm with approximately 53,000 employees and annual revenue exceeding $11 billion. MMC also is the parent company of Guy Carpenter, the risk and reinsurance specialist; Kroll, the risk consulting firm; Mercer, the provider of HR and related financial advice and services; and Oliver Wyman, the management consultancy. MMC’s stock (ticker symbol: MMC) is listed on the New York, Chicago and London stock exchanges. MMC’s Web Site is www.mmc.com. Marsh’s Web site is www.marsh.com.

About the University of East Anglia

The University of East Anglia was founded in 1963 and directly employs around 3,000 full-time staff, has over 14,000 students and an annual income of some £170m. It is estimated to be responsible for indirect employment of some 3,300 people outside the institution and generates direct and indirect economic impact of around £420m. In the latest Research Assessment Exercise, over 50 per cent of the university’s research activity was deemed to be world leading or internationally excellent with 87% in total being of international standing. Thanks to the university and its Norwich Research Park partners, the city has the fourth greatest concentrations of ‘most highly cited researchers’ in the UK, after London, Oxford and Cambridge.