Householders with blocked drains are being warned to think twice before employing claims management companies (CMCs) to process a claim.
The insurance company Direct Line says that more than half the claims being made by such firms are “invalid, inflated or fraudulent”.
Many people have cover for blocked drains as part of their home insurance.
However, sometimes a CMC will offer to handle the claim for them, charging a significant sum.
Direct Line says some people end up paying thousands of pounds to such companies when they could contact their insurance company for free.
The firm says there has been a sharp rise in the number of claims being made for blocked drains.
In the first quarter of 2017, it estimates the number increased by 22% compared to 2016, with no apparent or logical explanation.
It’s thought that in some cases, unscrupulous drainage firms are selling details of their clients to CMCs.
Those CMCs then approach the householder and ask them to sign a bit of paper, typically promising to give the management company 10% of the eventual insurance payout.
Direct Line says that in some cases, people can also be confused about whether they are dealing with a drain repair company or a CMC.
“It is important that vulnerable customers who have an issue with their property are not taken advantage of by companies that are looking to profit from their misfortune,” said Katie Lomas, director of Direct Line Home Insurance.
“Fraudulent and inflated claims drive up the cost of policies for all consumers. Anyone that thinks they may need to make a claim on their insurance policy should contact their provider directly.”
As part of its research, Direct Line examined more than 2,000 drainage claims made in the last year. It found that 54% of them had been inflated or were invalid, costing UK insurance companies £2m.
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The General Data Protection Regulation (GDPR) aims to reform, modernise and harmonise European data protection law and will replace the Data Protection Act 1998. Any data that can be used to identify an individual (Data Subject) is considered Personal Data and will now also include genetic, mental, cultural, economic or social information. Very little personal data will not fall under the GDPR making it difficult for firms to avoid having to comply with its requirements.
When will it come into effect?
25th May 2018
How could this affect you?
The Information Commissioner Office (ICO) will have enhanced scope to penalise firms for none compliance and the consequences of data leakage in the event of a breach, these could be as severe as up fines or penalties of up to €20m or 4% of Global Turnover.
Cyber events such as breach, extortion and issues raised by loss of data are rarely out of the news. A major breach and potential loss of data can result in serious reputational damage, raising customer concerns as to the adequacy of a firm’s processes and data security provisions
All firms will be required to demonstrate that they comply with the new regulatory environment making effective Record-keeping absolutely essential.
Where collecting personal data, a firm must be able to evidence clear and valid consent to the processing of that personal data. It will be more important than ever for firms to explain exactly what personal data they are collecting and how it will be processed and used, and to evidence how this has been achieved.
Data minimisation requires firms not to hold data for any longer than necessary, and not to change the use of the data from the purpose for which it was originally collected. This means firms must obtain fresh consent before they can alter the way they are using data previously collected and have processes to ensure the deletion of data in response to requests from the data subject.
Firms will be required to report any data breach within 72 hours of discovery meaning they must have the processes in place to detect, respond to and report (as appropriate) any data breach. In some cases, it may be necessary to notify all those persons impacted, or potentially impacted, by the breach.
The above provides only a sample of the requirements under the legislation. Full details can be obtained at https://ico.org.uk/for-organisations/data-protection-reform/overview-of-the-gdpr/
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We are sure you have heard about the change being made to the Ogden rate. The following notes offer some guidance.
What is the Ogden rate or Discount rate?
When assessing lump sum awards for personal injury claimants, the courts consider the net rate of return (discount rate) the claimant might expect to receive from a reasonably prudent investment of lump sum compensation.
Since 2001, the rate has been 2.5%.
What is changing?
It was announced on the 7th December 2016, by the Lord Chancellor, that a review of the Discount Rate would be undertaken in response to years of pressure by the Affiliation of Personal Injury Lawyers (APIL). The resultant decision was to reduce the discount rate by 3.25 points to -0.75% and this will come into effect on the 20th March 2017.
More importantly the rate change applies retrospectively to all current claims, where current reserves may be reviewed and amended, as well as new claims.
What effect will this have?
The Lord Chancellor previously conceded that the change will have ‘profound financial consequences’ and insurers will incur significant additional costs with classes such as Motor and Casualty particularly affected; in fact, any class of insurance where there is an exposure to personal injury.
By way of an example
John, a 21-year-old male who has been injured and is looking at a future of nursing care and loss of earnings totalling £9,072,028 based on the Ogden rate of 2.5%. With the new rate of -0.75% the nursing care and loss of earnings rockets to £20,023,103.
As you can see from John’s example, the change in the Ogden discount rate from its current +2.5% to -0.75% reflects a significant increasein the total settlement of a claim.
This will have a material impact on insurers’ balance sheets and unfortunately means they will be looking to recover this increase in claims and reservations for claims through increasing premiums.
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Leading Underwriting Agent, Choice Insurance Agency has announced today a new partnership with SAGIC (Salvation Army General Insurance Company Ltd) to provide brokers with a unique Home Insurance product.
The partnership enables Choice Insurance to provide SAGIC Home Insurance policies to their broker network via their advanced broker software platform which in turn helps support The Salvation Army. SAGIC are the only insurer that returns 100% of its profit to charity, namely The Salvation Army, it’s parent organisation.
Mark Williams from Choice Insurance said ‘Our partnership with SAGIC enables us to provide comprehensive and competitive SAGIC Home Insurance policies, via our market leading broker platform. Crucially, it also provides ethical insurance that allows us all to help people in need at the same time. It makes a real difference.’
Choice Insurance Agency was established in 2003. It is a family run business with a focus on customer service and support. They specialise in Residential Let (Including Unoccupied), Home (Including Non-Standard), Commercial Property, Liability and Professional Indemnity Insurance for both direct clients and Brokers.
SAGIC have more than £5 billion underwritten, a range of underwriting that includes home and commercial insurance, and are over a century old. And the organisation is different to other underwriters in one unique way – all of its profits go to helping others.
The Salvation Army’s co-founder, William Booth, was on the original board – and since then SAGIC has given tens of millions of pounds to help fund the church and charity’s work worldwide. During the last three years SAGIC has provided more than £2 million to The Salvation Army’s work as it helps transform the lives of the most vulnerable and marginalized people in the UK and Republic of Ireland.
SAGIC’s managing director, Gordon Dewar, said: “SAGIC was founded with two very important principles; to provide the highest quality insurance services and to financially support the vital work of The Salvation Army. We are delighted that our partnership with Choice will further enable us to do that.”
SAGIC was founded in 1909 and offers a wide range of insurance services including; home, commercial, mobility scooter, carers and church insurance.
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Business Interruption cover is arranged to protect your loss of earnings and additional expenses incurred following a Material Damage loss. To ensure that you receive the full benefit of the insurance cover in the event of a claim it is critical to ensure that the sum insured and the indemnity period are correct.
The ‘Gross Profit’ sum insured is calculated for insurance purposes as follows:
‘The amount by which the sum of the annual turnover plus closing stock and work in progress exceeds the sum of the opening stock, work in progress, purchases, bad debts, carriage, packing and freight’.
Once you have calculated this figure you need to adjust this to allow for the indemnity period selected and also for anticipated growth of the business during the period of insurance itself. You should bear in mind that the ‘worst case scenario’ loss may not occur until the last day of the period of insurance.
If there are other costs that you feel will vary in the event of an interruption these can also be noted in the ‘Gross Profit’ definition. As with the Material Damage section, the Business Interruption sum insured will be subject to the condition of Average so that under-insurance will be penalised in the event of a claim.
The ‘maximum indemnity period’ is the longest period of time that insurers will cover the Business Interruption loss from the date of the Material Damage claim.
The indemnity period selected should represent the maximum time that can reasonably be anticipated for your business to be financially affected by an insured loss. Factors that can impact the length of the indemnity period include but may not be limited to:
- Demolition of existing buildings and site clearance
- Redesign, planning permission and tendering for new premises
- Reconstruction itself
- Replacement of equipment and specialist machinery
- Replacement of stock
- Restoration of supplier and customer base
It is important for a ‘worst case scenario’ to be envisaged when deciding upon an adequate indemnity period to ensure that the policy will provide cover until the business reaches the operational level that it would have achieved had it not been for the loss.
Whilst we are able to provide guidance on how to assess the sum insured and indemnity period, we cannot advise you on what may be a suitable period for your business as this can vary widely from one business to another and even between businesses in the same sector. Therefore, we do not accept any responsibility for the adequacy of your indemnity period or sum insured. You may wish to consider obtaining suitable professional advice in this respect.
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How to protect your organisation from burst water pipes
Burst water pipes can cost thousands to businesses as well as leading to potential disruption. This article explains how you can protect your organisation should the worst happen.
If a water pipe bursts it can have a devastating effect on your organisation. No matter where it happens, escaping water can cause huge delays in day-to-day dealings, particularly when there are time-sensitive projects underway or expensive electronic equipment in use. The damage that burst pipes can cause often means an organisation is left without somewhere permanent for employees to work for days or even weeks on end.
This is something many organisations worry about as it often comes out of the blue. There are, however, a number of things you can do in order to limit the damage a burst pipe can do.
Ensure pipes are well-insulated
It is well worth checking to see if pipes and water tanks are insulated or not. Sometimes pipes are left open to the elements, but insulating them will help protect them from fluctuating temperatures and minimise the risk of bursting. It is also relatively cheap and most plumbers will be able to carry out the task.
Keep the building temperature stable
If possible, try to keep the heating on for 24 hours a day, this will keep the average temperature of the water pipes at a constant level and make it less likely that they will burst. If the building is to be left empty for an extended period of time, check the insurance policy to see if it needs to be kept above a certain temperature in order for a claim to be valid should the worst happen.
Regularly service the boiler
Ensuring the boiler is serviced regularly by a professional will help you identify any potential problems before they cause serious damage. If a boiler breaks down, particularly in the cold winter months, then pipes could be exposed to adverse weather; it is therefore always best to check the boiler is in good working order as often as possible.
Know where the water stop tap is
If a water pipe does burst, it is important to know where the water stop tap is and that it is working properly, so that leaking water can be stopped as soon as possible. It is recommended that you familiarise yourself with where the water stop tap is and how it works.
Drain the water pipes and central heating system
It may be worth considering completely draining the water pipes and central heating system of a building if it is going to be left empty and unused for a long period of time. This will completely remove the risk of pipes bursting.
Allow warm air to enter the loft
Finally, leaving a loft hatch open or ensuring there is a gap for warm air to enter and circulate around the loft will help keep pipes from freezing.
What to do if a pipe does burst
Even by following all of the above points, sometimes a burst water pipe is inevitable. If this does happen then it is best to act quickly.
Take immediate action
Once a pipe does burst, it is a race against time. Turn off the water stop tap ASAP to stop any more water from leaking and don’t forget to turn off the central heating. So long as it is safe, try to soak up as much of the leaked water as possible with whatever you have to hand and move furniture away from the flooded area. Steer clear of anything electronic that may have been damaged by the water.
Tell your insurance providers
Do not leave this task for a later time – tell your insurer about the problem at the most convenient time, as they will have specialist knowledge and be able to advise you about the best course of action. Check your insurance details to find out what is covered by your policy (emergency plumber call-outs, for example), and remember to keep invoices to pass onto them if repairs do need to be made. Do not, however, start repair proceedings before talking to your providers and discussing the next steps with them; it may be that your insurance providers prefer to use specialist firms and will potentially organise the repairs for you.
Inform clients of the disruption
Communicate with your clients and let them know about the situation. This is especially important if it impacts on delivery times for a product or service promised, or if it affects the company’s finances in any way. Clients generally appreciate being kept in the loop in regard to any problems within a business.
Insuring against burst pipes
Sometimes, the best preparation in the world is not enough; so it’s essential to have adequate insurance in place should your business be affected by a burst water pipe. Building and contents insurance will cover your premises in the event of damage; while business interruption cover can make up for lost income caused by being away from the site while repairs take place.
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Protecting your business premises against snow and ice
The colder months can bring extreme weather conditions that have the ability to cause real damage to business premises, costing owners a small fortune in repairs as well as lost trade.
Organisations have a certain level of responsibility to keep their pavements, car parks and private land clear of hazardous ice; meaning that if a member of staff or the public were to slip, they could find themselves being sued or prosecuted under the Health and Safety at Work etc. Act 1974.
In order to prepare themselves for the threat of ice and snow, organisations need to make sure that they are properly insured and up-to-date with the latest guidelines. With this in mind, here is some advice on how to minimise cold-weather damage before it occurs, as well as what to do if the worst does happen.
Improve your building’s energy efficiency
Search your premises thoroughly for ways that you can help to reduce heat loss, such as sealing gaps around doors and windows; covering water heaters with the recommended blankets; getting insulation for exterior walls and loft spaces; and fitting draft excluders underneath external doors.
This is ideally something that needs to be done before the winter months arrive, so that it’s not a case of ‘too little, too late.’ Prevention is the best form of protection when it comes to limiting damage caused by low temperatures, so think of it as a year-round philosophy as opposed to something you only think about when winter comes around.
Service your boiler
Your heating system will have to work harder than ever in sub-zero temperatures, which could bring out any underlying issues already present. To reduce the chances of it breaking down when you need it most, get a qualified boiler engineer to service and possibly repair your boiler earlier in the year, perhaps just after the summer. Don’t leave it until the middle of winter, when you may have to pay over the odds for an emergency call-out.
Pipes are often the first thing to be affected by cold weather, and if they freeze or break it can affect a building’s entire utility system. Protect them by insulating external pipes and those in unheated internal areas, such as basements or attics with foam or rubber tubes. These tubes should then be checked regularly, as they can erode over time.
If pipes do freeze up, locate the stop tap and switch off the water supply. Check to see if the pipe has burst, then open the affected tap so that the water can flow through as it melts. You can try warming pipes with a hairdryer or towels soaked in hot water, but do not ever use a naked flame or blowtorch to do this.
Building roofs can be damaged by the weight of heavy snow, as well as ice dams which form when a large amount of moisture freezes on the roof, and is topped with more snow. These can be a particular concern for building owners, as when build-ups of ice melt the water can leak through to the entire property
Try to get your roof inspected a couple of times a year from ground level, as fallen debris such as slates or tiles can be signs of a potential problem. You should also pay attention to leaning chimneys, which can indicate that the roof is unstable and in need of repair. Remember: a heavy bout of snow is enough to collapse a worn-out roof.
If you are worried that there is a substantial build-up of snow on your roof, get a professional who has the right safety equipment to remove it for you.
Sometimes, the best preparation in the world is not enough; so it’s essential to have adequate insurance in place should your business be affected by heavy snowfall or ice. Building and contents insurance will cover your premises in the event of damage; while business interruption cover can make up for lost income caused by being away from the site while repairs take place.
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Safeguard your organisation from the effects of flooding
An unpredictable event, such as a flood, can cause thousands of pounds worth of damage to your property and possessions. This article explains how you can protect your organisation against flooding.
Over the past few years, flooding has been one of the most devastating and commonly-occurring natural disasters in Britain, with the country suffering from at least one major flood each year.
It’s essential that organisations prepare themselves, their staff and their premises for the possibility of a flood. This can help to limit the potentially devastating effects on valuable stock and equipment; and what’s more, advance planning will save on lost time and stress should flood damage occur.
When it comes to protecting your organisation from a flood, here are some of the key questions that you need to ask yourself:
Are you at risk?
The Environmental Agency is an essential source for finding out if your premises is in an area that’s at risk of flood; simply contact them to find out, or enter your postcode into their website. You can also use their site to look at sea and river levels, meaning that you can be ware of water levels as well as the weather at all times.
Can you be contacted about a flood warning?
If you are told that your business is at risk, the next step is signing up to receive flood wrnings via the Environmental Agency’s free telephone service. This automated service operates 24 hours a day, so you should provide them with a number that you can always be reached on, such as your mobile. You can provide your details on their website or by calling them on 0345 988 1188.
Do you have a flood plan?
Having a documented flood plan at your premises is just as important as having health and safety documents available, particularly if you are a small organisation. A detailed and easy-to-read plan will make it easier to understand and communicate what to do if the worst does happen.
As well as featuring preventative action, useful contacts, a map detailing the location of service shut-off points and protective items (eg. sandbags), your plan should also include a checklist of procedures that staff can tick off, such as:
• Switch off gas and electricity supplies
• Move valuable equipment from the ground to somewhere higher
• Contact a nearby disaster recovery firm, using the directory provided in the plan
It can also be a good idea to carry out actions such as: covering ventilation bricks; raising damp proof courses; fitting water-resistant skirting boards and non-return valves on drains and water pipes; decorating rooms with flooring tiles as opposed to fitted carpets; ensuring electrical sockets, controls, wiring and fuse-boxes are at least 1.5 metres above floor level; and fitting bathrooms and kitchens with watertight materials, not absorbent ones.
Would your staff know what to do?
Every single employee on your team should know the correct flood safety procedure for your premises. With the right training and a clear flood plan on site, both in the employee handbook and saved on your internal network, staff will be equipped to act quickly and efficiently if a flood occurs. This will give you the best chance of protecting your organisation.
Are you insured?
Finally, it’s essential to have the right insurance in place if your business is in a flood risk area. There are two cover options available to you:
Buildings and contents insurance – this will cover your premises against accidental damage caused by natural disasters such as fires, storms and of course floods. This includes the building itself, as well as internal contents and computer equipment; you can even choose to cover things such as laptops if you do some of your work at home. However, homeworkers will not be able to take out buildings insurance.
Business interruption insurance – while often overlooked, this type of cover is extremely useful if your business operations have to go on hold after a flood and can help limit the financial damage caused. It will cover loss of income, as well as money spent having to work in a different location if your premises is being repaired, this can often take months, meaning that costs soon add up.
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Contract works insurance can usually be bought as either an annual policy, or to cover a specific contract or project.
An annual Contract works covers all the contractor’s unspecified sites in any one year limited to the maximum any one contract value stated on the policy. Cover is for materials and contract works in course of erection generally against loss or damage for all unspecified contracts undertaken in a year. Cover can be extended to include own plant, site huts, tools, show houses and hired in plant. Risk of loss or damage by fire, theft, storm and malicious acts are usual types of cover included.
Specific Contract Policy
A specific Contract works policy restricts cover to one contract. The employers name, nature and contract address is specified on the policy. Cover is for contractor’s materials and contract works in course of erection generally against loss or damage at the unspecified contract location. Cover can be extended to include own plant, site huts, tools, show houses and hired in plant. Risk of loss or damage by fire, theft, storm and malicious acts are usual types of cover included.
Summary of Covers that Can be Included
A) Contract works
i) The site: The permanent and temporary works executed in performance of the contract and materials for use in connection therewith. Whilst on the contract site or adjacent thereto until the issue of a certificate of completion or until taken over by the principal and /or thereafter where the Insured is required to insure under the terms of the contract.
ii) Transit:whilst in transit (other than by sea or air) in the United Kingdom to or from the contract site
iii) Maintenance: During the period of maintenance or defects liability not exceeding twelve months
1) arising from a cause occurring prior to the commencement of such period or
2) occasioned by the contractor in the course of any operations carried out by him for the purpose of complying with his obligations under the maintenance or defects liability clause in the contract.
B) Employees personal tools and effects
Personal tools and effects the property of the Insured’s employees other than motor vehicles, precious metals, precious stones or articles made therefrom or money.
C) Owned plant
Contractors’ plant the property of the Insured or on hire purchase or leased to the Insured comprising all types of contractors’ plant including scaffolding, temporary buildings, site office contents, site welfare facilities or as more specifically described in the schedule.
D) Hired-in plant
Contractors’ plant hired-in by the Insured but not on hire purchase or free loan to the Insured comprising all types of contractors’ plant including scaffolding, temporary buildings, site office contents, site welfare facilities or as more specifically described in the schedule. Including continuing hire charges in consequence of loss or damage covered under this section.
E) Free-issue materials
Free-issue materials supplied by the principal or his agents and for which the Insured is responsible under the terms of the contract. Provided that the total value of all such free-issue materials is included in any declaration made.
F) Offsite storage
Loss or damage provided to the property insured whilst in store other than the contract site. Provided that the Insured is responsible for such loss or damage under the terms of the contract.
G) Speculative building
Property being built or erected by the Insured other than under contract. In respect of such property cover shall cease to apply from:
a) the date such property is sold or let or
b) a period set out in the policy (e.g. 180 Days) after the date of completion of the work of building or erecting the last property on the contract site whichever is the earlier. Completion shall mean completion apart from a prospective purchaser’s or tenant’s choice of decorations and/or final fitments
H) Principals indemnity
Any principal in a like manner to the Insured where required by the conditions of the contract in respect of contracts undertaken in the United Kingdom only
I) JCT contract conditions
The following where the Insured undertakes a contract under JCT Standard Form of Building Contract 1998 (or the equivalent thereof). In respect of loss of or damage to the property insured by any of the specified perils defined in the above mentioned Standard Form of Building Contract it is agreed that so far as is required by the sub-contract the Company will not pursue any rights of subrogation against sub-contractors directly engaged by the Insured
J) Expediting expenses
The costs necessarily and reasonably incurred by the Insured in making temporary repairs and expediting permanent repair including overtime working and the use of rapid transport in consequence of loss of or damage to the contract works.
K) Debris removal
The costs and expenses necessarily incurred by the Insured with the consent of the Company in:
a) removing debris
b) dismantling and/or demolishing
c) shoring up propping and fencing off
d) repairing or cleaning drains sewers service mains and the like and/or dewatering
e) temporary boarding up of windows following breakage of glass following loss of or damage to the contract works for which the Insured is indemnified.
L) Professional fees
The cost of architects, surveyors, consulting engineers and other professional fees necessarily and reasonably incurred in the reinstatement of the property insured following loss of or damage to the contract works for which the Insured is indemnified not being fees for preparing any claim. Provided that the amount payable shall not exceed those authorised by the appropriate professional body
The cost of rewriting or redrawing documents, drawings and business books but only for the value of the materials as stationery and the cost of clerical labour in writing up and not for the value of the information contained therein.
N) Public authorities clause
The additional cost of reinstatement following damage to property insured for which the Insured is indemnified of this policy solely to comply with any regulations arising out of an Act of Parliament or with bye-laws of any Municipal or Local Authority or European Union directive.
a) reinstatement (which may be carried out upon another site subject to the liability not being increased thereby) is carried out without delay
b) the amount recoverable under this clause shall not include:
1) the costs incurred in complying with regulations or bye-laws intimated to the Insured prior to the happening of the damage
2) the costs incurred in respect of undamaged property.
3) the amount of any rate tax duty development or other charge which may become payable following compliance with such regulations or bye-laws.
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From today, people living in flood risk areas will have better access to affordable flood insurance
Flood Re, which will enable insurers to offer competitive premiums and lower excesses to high flood risk homes across the UK, has launched today.
The world-first scheme is now live and ready to accept policies from insurers. The launch follows months of preparation, from appointing a Board, testing IT systems and on-boarding insurers to securing £2.1 billion in reinsurance cover.
Today’s launch follows a number of recent milestones, notably receiving approval from the Prudential Regulatory Authority (PRA) and Financial Conduct Authority (FCA).
Although Flood Re will not deal directly with consumers, it is important for households in high flood risk areas to understand how the scheme could help them. We have recently released an animated video to explain how the scheme works. This is on the Flood Re website at www.floodre.co.uk and has also been offered to insurers and other third party sites where consumers can go to find out how the scheme can benefit them. A list of insurers that are offering Flood Re compatible policies was also recently made available on the Flood Re website so that consumers know where they can go for quotes and further information.
Flood Re is set to help an estimated 350,000 households in the UK at risk of flooding.
Brendan McCafferty, Chief Executive of Flood Re, commented:
“I am delighted to announce that Flood Re is now live and ready to accept policies. We have been working tirelessly to ensure we’re ready so that consumers can start benefitting from greater choice and more competition in the insurance market. This should make flood cover more affordable and accessible to those in high flood risk areas over time.
“Consumers should check the Flood Re website to see which insurers are signed up, speak to their current insurer and be prepared to shop around. When buying a policy they should make sure it is the best one for them, not just the cheapest.”
Choice Insurance Agency Ltd is authorised and regulated by the Financial Conduct Authority and is entered on the Financial Services Register (http://www.fca.org.uk/register) under reference 300183.
We are an Underwriting Agency working in partnership with key brokers around the UK to place quality business with our panel of leading insurers.
Registered in England number 4420555. Registered office: Suite 3, 4a Southchurch Road, Southend-on-Sea, Essex, SS1 2NE.