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May 2007
49.25 Background (amended November 2009)
Since 2 January 2003 The Insolvency Service has used the Willis Insolvency Open Cover Facility to obtain automatic insurance cover. This insurance scheme is operated by Willis Limited, The Anchorage, 34 Bridge Street, Reading, RG1 2LU. The client services manager for Willis is Rachel Norris who can be contacted on telephone number 0118 949 8082 or via email on norrisra@willis.com.
The scheme is designed to automatically cover most insurance risks. However, there are other classes of insurance risk which remain outside the scope of the automatic facility due to the nature of the risk or the infrequent need for cover (see paragraph 49.28).
The official receiver should only use another insurer where he/she is continuing cover with the insolvent's existing insurer (see Part 2) or where Willis are unable to provide the necessary cover. This is only likely in exceptional circumstances and before seeking cover from an alternative source the official receiver should consider the cost of the premium in relation to the value of the asset he/she is trying to protect.
Each official receiver's office has been provided with a copy of the Willis Insolvency Manual which outlines the scope of the insurance cover available and how claims can be made. Copies of the Willis Insolvency Manual may also be obtained by e-mail from norrisra@willis.com.
49.26 Notifying Willis of the risks to be covered
The official receiver is required to inform Willis if insurance is required as soon as possible after his/her appointment. Where automatic cover for a smaller non trading case falling within the criteria set in Annex 3 is required (see paragraph 49.27) the scheme allows a period of 30 days in which a notification can be made. This period of 30 days is used for administrative convenience and the official receiver should not delay notifying Willis just because this period is available.
Where certain activities are concerned, notification to insurers is required within 14 days (these risks/activities are detailed in part 2.4 and Appendix 1 of the Willis Insolvency Manual). If there are any doubts as to whether or not automatic cover is available the official receiver should contact Willis as soon as possible. Willis staff will be able to advise what cover may be required when they are told the trade of the business over which the official receiver has been appointed.
The official receiver should use the Premium Bordereau form for Smaller Non Trading Cases (Annex 2 to the Willis Insolvency manual). This is a form which should be completed by each official receiver's office once a month which lists all the cases in which insurance was required for the previous month. Where the cover required falls within the criteria listed in Annex 3 the official receiver is required to add the case to the bordereau form. The completed bordereau, including nil returns where no insurance is required, must be submitted electronically to Willis to reach them by the 15th of each month. This provides cover on the listed cases from the date of the official receiver's appointment where notification is given within 30 days of that appointment . In order for an asset to be covered by Willis it must be put on the office bordereau as soon as the official receiver becomes aware of its existence.
Where assets requiring insurance come to light more than 30 days after the date of the official receiver's appointment they can be insured by Willis but the cover will only be effective from the date Willis are notified of the assets.
Where assets are disposed of or an insolvency practitioner is appointed the official receiver's automatic insurance cover must be cancelled. These cancellations or any other alteration to the cover required should be noted on the Premium Bordereau for Smaller Non-Trading Cases - Adjustments/Cancellations sheet (Annex 3 to the Willis Insolvency manual) which is submitted to Willis each month with the bordereau form. Insurance cover (and the liability to pay the premiums) will continue until Willis are notified that the cover is no longer required.
49.28 Cases not covered by the automatic insurance scheme
The Insolvency Scheme is designed to automatically cover most insurance risks. However, there are other classes of insurance risk which remain outside the scope of the automatic facility due to the nature of the risk or the infrequent need for cover. These risks, when insurance cover is required, must therefore be placed separately by Willis in the open insurance market, and all relevant underwriting information must be immediately supplied so that Willis may approach Underwriters.
For larger cases where the sums insured are exceeded and the criteria for small non-trading cases as outlined in Annex 3 are not met the official receiver will need to contact Willis by telephone to obtain suitable insurance cover. The cover required may require Willis to place the insurance separately in the open insurance market and all relevant information should be supplied to Willis by the official receiver. Examples provided by Willis of businesses where insurance will need to be obtained separately on the open market include art dealers, jewellers shops, racehorses and fish farms. The amount of the insurance premium should be agreed between Willis and the official receiver.
Once the official receiver has reached an agreement with Willis the official receiver should complete the Scheme Abbreviated Questionnaire (Annex 4 to the Willis Insolvency manual) and send it to Willis. Willis staff can give assistance in the completion of the questionnaire and may also arrange a site visit to confirm the insurance is adequate or give advice on security. Where the risk is of an unusual nature, which may result in a high premium, the matter should be discussed with Technical Section in advance (see also paragraph 49.4).
49.29 Payment of premiums
Willis will issue a 3 - monthly invoice giving a premium breakdown as to the costs on each individual case. The official receiver must forward all authorised invoices for payment of premiums to OR Banking for payment by cheque within 14 days. Payment of insurance premiums is regarded as an expense in preserving the assets of the estate and a debit balance on the estate account may be incurred or increased to pay any necessary insurance premium without specific authority but such balances should be managed carefully where there is unlikely to be a commensurate benefit to the estate (see also paragraph 49.4).
49.30 Claims
It is a condition of insurance policies that claims or potential claims are notified as soon as practicable. Therefore the official receiver should telephone Willis with preliminary details as soon as possible after the loss has occurred and immediately if circumstances warrant, e.g. Loss of Life or Major Property Damage. Outside office hours Willis personnel can be contacted at home (see page 1.2 of the Willis Insolvency Manual for details).
Where the claim relates to theft, malicious damage, riot or other criminal activity the official receiver should also inform the police.
In all cases steps should be taken to minimise any potential further losses and an estimate for replacement or repair obtained.
When Willis are notified of a claim they will appoint a loss adjuster, if required, who may visit the site of the claim to ensure the official receiver's best interests are protected. In straightforward claims Willis aim to settle the claim within 20 working days.
In respect of public liability claims and those relating to motor vehicles the official receiver should make no admission of liability and all third party correspondence in relation to the claim must be forwarded to Willis unanswered who will undertake to ensure that the relevant insurer takes control of the conduct of the claim and will deal directly with third parties or their representatives. Any writ or summons in connection with the claim should be forwarded to Willis immediately.
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