Red Zone Cover Being Withdrawn in the UK

As another UK mainstream insurer withdraws Employer’s Liability cover for businesses operating in distressed regions, what can you do? And how can you be certain you are properly protected?

Peter Bellwood, Managing Director of Bellwood Prestbury, explains that mainstream insurers often change their scope of cover, and clients need to be especially vigilant when dealing with overseas operations.

Withdrawal from Red Zone areas

Peter explains: “We have had a number of approaches recently because a mainstream UK provider has withdrawn cover for Employer’s Liability in ‘Red Zone’ areas.

"This typically means that they will not provide cover for any business entities or operations you may have in areas where the UK Foreign and Commonwealth Development Office (FCDO) advises against all travel. That could be a whole country, like Afghanistan. But it might just apply to a specific area. For example, in Mali, you will still be covered for operations in the capital, Bumako, but if your business is operating in the north and east, or close to the border with Cote d’Ivoire, you won’t be covered.

"This could leave your organisation open to possible problems if an incident occurs. It could also mean that you are inadvertently failing to meet local employment law obligations, which could lead to more significant damage to contracts and reputation."

What can you do?

Peter explains that this is bread and butter for a specialist like Bellwood Prestbury. “With long-established close working relationships, we are able to go direct to Lloyd’s underwriters who understand the risks and are prepared to offer cover. We can ensure you meet your statutory requirements and get the right level of cover to meet your duty of care, protect your liability and meet any contractual obligations you may have.”