Could Your Clients be Facing Hidden Brexit Risks?

As things stand, the UK is scheduled to leave the EU on the 12 April 2019 – though even that date is far from set in stone. So, it’s fair to say that, with little time left and so much continuing debate, there is a great deal of uncertainty for British industry and professional services. This could have an impact on business insurance, with clients needing advice and guidance to ensure adequate cover remains in place.

For instance:

  • The value of sterling: Sharp exchange rate variations could increase the cost of reinstating any plant that is sourced from Europe. If the exchange rate drops by 15%, the actual cost of reinstating an item of plant from say, Germany or Italy will increase accordingly.
  • Lengthened lead times: Equipment or orders of replacement stock from Europe may take longer to arrive due to the impact of transportation and customs delays together with unexpected effects on manufacturing supplies from European producers.

Both these scenarios mean it is vital to review relevant insurance arrangements, like business interruption (BI) cover. For instance, maximum indemnity periods need to be reviewed to account for supply chains becoming more complex as the introduction of customs inspections and regulatory requirements increases the time it takes to get goods from one country to another.

With this in mind, it may be necessary to increase the BI maximum indemnity period to protect against the unknown, but anticipated impact on supply chains and lead times – clearly, being underinsured could reduce the chance a client’s business will survive a significant event.

Other risk areas potentially affecting clients include:

  • General business regulations, such as intellectual property rights, merger and anti-competition rules, accounting standards, and audit.
  • Import and export rules, including the export of controlled goods, genetically modified food, and animal feed products.
  • Product safety, ranging from food labelling to the regulation of chemicals.
  • Consumer privacy and data protection, including contractual obligations related to data collection and transfer.
  • Environmental protection such as emissions standards and climate change-related requirements.
     

Marsh ProBroker members can call on expert help, to support their clients as they seek to navigate these risks ‒ for instance, working with Hamilton Bond to provide a Business Interruption Insurance Cover Review service.

Similarly, members can rely on Marsh Networks compliance support to ensure they ask clients the right questions and uncover hidden Brexit risks.

Not a member? Drop us a line to find out more or request a call back.

Marsh ProBroker’s parent company

Marsh