Superyacht contractors, ship repairers, as well as sub-contractors in both sub-sectors, are losing earning opportunities as well as being forced to pay unnecessary costs due to some recruitment businesses appearing to be adopting a “one size fits all” approach to insurance.
IRCM are regularly approached by traders who have been offered Bona Fide Sub-Contractor placements to undertake superyacht and ship engineering work. In many cases they have been informed by the recruiting business that they need Employers Liability and professional Indemnity Insurances in addition to Public Liability cover. Unless they can present evidence of cover they are unable to take-up the placement.
This creates problems in a number of areas. First and foremost a sub-contractor without employees does not normally require Employers Liability Insurance. Obtaining cover would obviously be at a cost to the sub-contractor which is not likely to be cheap (given the type and location of work to be carried out).
Secondly, Professional Indemnity Insurance is a product that indemnifies professionals in respect of any advice or design work they provide in return for a separate fee, In every case that has come to IRCM’s attention, the sub-contractor concerned was simply carrying out work and was providing no advice or design work at all. Marine-based Professional Indemnity Insurance is often costly, even for relatively low fee income – this is another potentially unnecessary and expensive cost for a sub-contractor.
The third issue relates to insurance providers themselves who must be fully Authorised and Regulated by the Financial Conduct Authority (FCA). Central to FCA expectations of insurance providers’ conduct is Treating Customers Fairly (TCF). One of the principle TCF requirements is to give due regard to the interests of their customers and treat them fairly. This does mean that the selling of products that are not relevant to a customer’s need is not permitted. So, no matter how much an individual is being told that they need to have a certain cover in place just to get work, the insurance provider is unable to provide them with the cover if it doesn’t match their activities.
Finally, contractors themselves will potentially be losing out on having the best sub-contractors working for them: if the best sub-contractors can’t get insurance, they can’t get the work.
Ship Repairers, Superyacht Contractors and their respective Sub-Contractors who would like to discuss this issue further can email markelcocks@marineinsurance-ircm.co.uk or ‘phone Mark on 01902 796793