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Minimising risk keeps the cost down

fire damaged vehicle dismantling facility
We all hate paying for insurance but the costs can be controlled by the way you operate your business - and if the unthinkable does happen, you want to be sure you're actually covered!
When it comes to insurance, people dealing with end-of-life vehicles rarely get a great deal. You will no doubt have found that there isn’t an easy way of getting a cheap quote; in fact, there is no easy way of getting a quote at all from many insurers!

Why is this? After all, we are among the most highly regulated in the motor trade; generally, owning a business that buys and sells cars isn’t subject to the legislative scrutiny of a legitimate motor salvage or vehicle dismantling business. For us, risk assessment and control is of paramount importance.

Long time specialist to our industry, Anita Jones (who recently joined Bollington Insurance Brokers) knows all too well that the key to getting value for our industry lies in recognising and dealing with health and safety and risk management generally. Anita explained, “a combination of the Health and Safety at Work, the Motor Salvage Operators Regulations, the End of Life Vehicles Regulations and The Environmental Permitting Regulations has led to reputable traders becoming far more knowledgeable, cautious and highly prescriptive about everything they do.”

The problem, as you’ve guessed, is often one of perception. This subject was recently touched upon again in the MVDA’s quarterly magazine. Many insurers still view this industry with suspicion, dwelling on images of cars piled high in the sky and customers climbing up towers of vehicles to look around for wing mirrors, wheels or whatever takes their fancy. They don’t always understand the risk that they’re insuring.

Anita Jones
Anita Jones has been organising effective cover for businesses in our sector for over 10 years. She understands how we operate and is professionally trained to assess and help you both minimise and manage your risks. By doing so, she can arrange insurance cover that not only reflects your operation but will provide adequate cover when something does go wrong. You can call Anita at Bollington on 07977 432048 or email her.
We all know that processes are in place these days, such as racks for vehicles, depollution processes, and detailed dismantling procedures, not to mention that health and safety of workers and members of the general public are strongly adhered to by end of life vehicle operators. It is in our own best interests to protect our people, premises and assets, so the last thing we would do would be to jeopardise our livelihoods by seeing an employee or member of the public seriously injured, or literally watching it all go up in smoke!
There’s another issue too!
Insurers are scared of the risk of watching a whole load of stock catch fire, and the aftermath of such damage. The environmental damage caused by plastics melting and seeping into the ground, explosions caused by undetonated airbags and petrol, for example, are issues which concern insurers greatly. Rightly or wrongly, they will look at the evidence of something like last month’s fires in the Midlands to show how catastrophic an event such as arson can be to such a business and, importantly, how much it might cost an insurer to put right.

However, insurers need to think more widely about what constitutes a risk for them. What is the alternative to a vehicle being correctly disposed of by an ATF? It could be that a vehicle is sold back into the trade – unscrupulous or unaware dealers may pick up damaged vehicles at auctions, re-sell them to members of the general public, who are then, perhaps inadvertently, driving around in potential death traps. It has recently been reported through atfProfessional that as many as 800,000 end-of-life vehicles go unaccounted for each year, which in itself is a scary statistic. Why should insurers penalise an industry that reliably and methodically takes this risk away from them?
So to get insurance that covers you for everything you need, what should you do?
The good news is that as a reputable ATF, you will most likely already have procedures in place for everything that you do – be it anything from the disposal of electrical equipment, the sorting of recyclable items, handling sharps within cars etc. Therefore, all you really need to do is to provide evidence that you are looking after your stock, your workers and members of the public who have access to your facilities. Demonstrable evidence of this will show that the risk the insurer is taking on is not only legitimate, but on a lesser scale than a business that does not have everything in place.

It all sounds simple, but in order to reach this point it could be worth talking to an expert like Anita who provides risk management advice as part of the service. You need to think of any area of your business that is exposed to risk and decide what measures can be put in place to eliminate issues or reduce the risk of something happening that might require a claim, particularly when it comes to your employers’ liability or public liability insurance. As Anita put it, “a good insurance broker is able to help a business that wants to help itself, and will go the extra mile to ensure that your case is presented to the insurer individually so that your risk is properly assessed and quoted for accordingly. Not only that, you will be making sure that your business is covered for everything that you need and won’t leave yourself open to covering any losses that occur due to a lack of insurance, or under-insurance.”

Vehicle dismantlers and salvage operators are often misunderstood, but if we can present our businesses in a favourable light, there is no reason why it should present any more of a risk to an insurer than any other business. Don’t forget, it is how your business is presented to the insurer that makes all the difference. If you have any questions, Anita is always happy to talk you through it. She can be contacted at Bollington Insurance Brokers on 07977 432048 .

Over the next few months, Anita has kindly offered to do some yard tours with us so we can see in practical terms, what we should be doing to help ourselves.

July 2013

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