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If you are considering cancelling one of the insurance policies you have with Qdos, or considering not renewing, please see below some important information.
This page is meant for illustrative purposes only and should be read in conjunction with the policy wordings to appreciate the full extent of policy coverage. If you have any queries or questions on any of the information or would like to discuss your insurance requirements further, please do not hesitate to contact a member of the team.
Professional Indemnity Insurance operates on a ‘claims made’ basis. This means that the policy needs to be in force at the time a claim is made, for example when negligence proceedings are brought against the insured. If the policy is cancelled or allowed to expire and a claim is then brought, the policy will not react, irrespective of if the claim relates to services provided when the insured was on cover. The policyholder should consider keeping the policy in force continually until they are no longer exposed to claims.
There are time limitations that apply for claimants looking to issue negligence proceedings, for the majority of negligence claims the time limit is 6 years following the date of the negligent act. There are certain circumstances in which the time limits would differ if the negligence only becomes apparent at a later date. It is possible to bring a claim outside the six-year limitation period if the damage complained of was not discovered until after the expiry of this period. This is known as 'latent damage', and in these circumstances the claimant has three years from either the date of knowledge of loss or the date when it ought to have reasonably known about the loss. What constitutes what 'ought reasonably to have been known' depends on the circumstances of the case, and specific advice should always be sought. There is a final time limit of 15 years from the date of the defending party's negligent act or omission.
It is difficult for a negligence claim to be brought against a company that has ceased trading and has been closed, however, there are certain circumstances in which a court can order the company to be restored to the register and for a claim to be pursued against it. This will depend on specific circumstances (for example: if you had knowledge of a claim, or potential claim, at the time the company was closed, amongst other factors) and specific advice should be sought (i.e.from a solicitor).
Tax Liability Cover and Tax Enquiry Insurance both operate on a ‘claims made’ basis. This means that the policy needs to be in force at the time a claim is made, for example when the letter of enquiry is received from HMRC. Should an enquiry be launched whilst the policyholder is on cover i.e. a letter received during the period of insurance, there is a notification window of 30 days following expiry in which the policy will still react, however outside of this there would be no coverage if the policy is cancelled or allowed to lapse. The policyholder should consider keeping the policy in force continually until they are no longer exposed to claims.
Enquiries will be launched in accordance with HMRCs enquiry window, which varies for different enquires and for those insured by the TEI/TLC35 will range from 12 months to 6 years. The insured is therefore exposed to an enquiry for this period after each tax year.
HMRC will monitor strike-off notices in the London Gazette and will also be notified by Companies House of any requests to wind up. If HMRC feel there is a need to do so, they will put in a petition to object to the winding up process in order for the business to remain open for them to open an enquiry. It is therefore likely that, if HMRC are to launch an enquiry, they will do so prior to the company being formally closed. It is important to note however that HMRC do have the powers to reinstate a company once it is closed and potentially transfer the liabilities of the business to the director. However it should be borne in mind that, whilst it is possible, it is a costly and time consuming exercise for HMRC so they are likely to do so only where the potential tax to be recovered justifies the exercise. It is also possible that they would look to reinstate due to the actions of the insured i.e. fraudulent or dishonest practices, which is unlikely to be covered by Qdos tax policies.
If you require further information as to the window for a particular enquiry, or the circumstances in which enquiry windows are extended, please contact a member of the team.
Employers Liability operates on a ‘claims ‘caused’ basis. This means that the policy will react to proceedings brought against the insured by employees for illnesses or injuries that are caused during the period of insurance, regardless of if the proceedings are brought against the insured a number of years after the policy expires.
Public Liability insurance operates on a ‘claims occurring’ basis. This means that the policy needs to be in force when the occurrence or event that causes the loss happens - it doesn’t matter when the work was carried out, nor does it matter when the claim is made or any legal action against you is commenced, which could be a long time after the activity was undertaken. This means that, if you cancel your policy once you have completed a project or contract, you will no longer have cover for something that arises from work you have done.
Public/Products Liability insurance operates on a ‘claims occurring’ basis. This means that the policy needs to be in force when the occurrence or event that causes the loss happens - it doesn’t matter when the work was carried out, or when the product was supplied, nor does it matter when the claim is made or any legal action against you is commenced, which could be a long time after the activity was carried out (or the product was supplied). This means that, if you cancel your policy once you have completed a project or contract, or whilst products that you have supplied are still in use, you will no longer have cover for something that arises from the contract work undertaken or any product supplied.
Contractors All Risk operates on a ‘claims occurring’ basis. This means that the policy will react to physical loss or physical damage to insured property which occurs during the period of insurance. Please note that the insured property is that which is being used or is intended for use in connection with the works on any contract site.
Jury Service and Legal Protection operates on a ‘claims made’ basis. This means that the policy needs to be in force at the time of a claim i.e. when legal proceedings commence or at the time the policyholder is summoned for jury service. If the policy is cancelled or allowed to expire and a claim is then made, the policy will not react, irrespective of if the claim relates to an insured event that occurs when the insured was on cover. The policyholder should consider keeping the policy in force continually until they are no longer exposed to claims.
Jury Service and Legal Protection is made up of a number of sections of cover, these sections of cover relate to different types of legal risks a contractor may face. If you have any queries or questions regarding any time limitations on any of the proceedings please contact a member of the team on 0116 269 0999.
Contractor Sickness Cover provides a monthly benefit whilst the insured is unable to work due to illness or injury, as such the policy does need to be in force at the time the monthly benefits are paid. The monthly benefit will only be paid whilst the policy is in force and the monthly premiums continue to be paid as they fall due. Should the policy be cancelled or allowed to lapse and an insurable event occur, there would be no coverage under the policy. The policyholder should consider keeping the policy in force continually until they are no longer exposed to claims.
Personal Accident operates on a ‘claims made’ basis. This means that the policy needs to be in force at the time it is called upon. Please also note that the Accident which gives rise to bodily injury needs to also occur within the policy period. If the policy is cancelled or allowed to expire and a claim is then brought, the policy will not react. Notice must be given to the Qdos as soon as reasonably practicable of any Accident which causes or may cause a claim within the meaning of this insurance contract, and the Insured Person must as early as possible seek the attention of a duly qualified medical practitioner.
Qdos Travel Insurance insures the policyholder for a number of risks associated with their business or leisure travel, the policy does need to be in force for the duration of the trip i.e. before departure and for the full period of travel. Should the policy be cancelled or allowed to lapse and an insurable event occur, there would be no coverage under the policy. The policyholder should consider keeping the policy in force continually until they are no longer exposed to claims.
Understanding different insurance policy types, how long you should keep a policy in place, and what the risks are of becoming uninsured
Should you cancel your business insurance policies if you are currently out of contract?
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