PART 3 - THE WILLIS INSOLVENCY OPEN COVER INSURANCE FACILITY
49.25Details of the Willis Insolvency Open Cover Insurance facility
(Amended August 2012)
The Insolvency Service uses the Insolvency Open Cover Insurance facility operated by Willis Limited. This scheme provides official receivers with automatic insurance cover when dealing with insolvents’ estates. The Willis Operating Manual For The Insurance Facility For Insolvency Practitioners (Willis Manual) can be found HERE. This provides full details of what is covered under the insurance facility, and includes some contact details for Willis personnel. Full details of the Willis service personnel are available HERE, and all these documents can be found in the Willis Contract section of the CAD/ORBS intranet page HERE.
Guidance on using the insurance facility via Willis Online is provided in the ORBS Willis Online & Insurance Guidance, available on the intranet HERE.
The scheme is designed to automatically cover most insurance risks anywhere within the United Kingdom, and a summary of the cover for automatic placements is available at Appendix 2 (from page 27 onwards) of the Willis Manual, available by clicking the link above. Reference should be made to the Willis client services manager or directors if there is any doubt as to whether the risk falls within the United Kingdom as defined by the Willis policy.
There are some classes of insurance risk which remain outside the scope of the automatic facility due to the nature of the risk or the infrequent need for cover (see paragraph 49.28 to 49.28B). Where insurance cover is required on risks not covered by the automatic facility, this must be placed separately by Willis in the open insurance market and all relevant underwriting information must be immediately supplied to Willis. See the Willis Manual HERE, specifically page 14 and Appendices 3 & 4.
“Off Scheme” insurance is also required for property held overseas, see point 10 of the ORBS Willis Online & Insurance Guidance HERE, also paragraph 49.28C and Case Help Manual Part “Official Receiver’s Insurance” paragraph 7.
49.25A Using an insurer other than Willis (Inserted August 2012)
The official receiver should only use another insurer where he/she is continuing cover with the insolvent's existing insurer (see Part 2) or where Willis are unable to provide the necessary cover. This is only likely in exceptional circumstances and before seeking cover from an alternative source, the official receiver should consider the cost of the premium in relation to the value of the asset he/she is trying to protect.
49.26 Notifying Willis within agreed timescales of the insurance requirement(Amended August 2012)
The official receiver must inform Willis if insurance is required as soon as possible after his/her appointment. Where automatic cover for a smaller non-trading case is required (falling within the criteria set out in Annex 3 to this chapter, see also paragraph 49.27), the scheme allows a period of 30 days in which a notification can be made. This period of 30 days is used for administrative convenience and the official receiver should not delay notifying Willis just because this administrative period is available. Initial action required is set out at pages 10 -11 of the Willis Manual available HERE, and also in points 1 to 4 of the ORBS Willis Online & Insurance Guidance HERE.
Where certain trades and activities are concerned, notification to insurers is required within 14 days. Detailed tables listing excluded risks/activities and those requiring early notification under the scheme are included at Appendix 3 to the Willis Manual (from page 55 onwards), click on link in previous paragraph.
If there are any doubts as to whether or not automatic cover is available the official receiver should contact Willis as soon as possible. Willis staff will be able to advise what cover may be required when they are told the trade of the business over which the official receiver has been appointed. Willis Client Service Director and management contact details are included at page 6 of the Willis Manual, available by clicking link above, or in the Willis insolvency personnel contact list HERE.
49.27 Small non-trading cases – accessing Willis Online (Amended August 2012)
The official receiver should use the Willis Online facility to obtain insurance cover through Willis for all cases where the cover required falls within the criteria listed in Annex 3 attached to this chapter (small non-trading cases). Willis online can be accessed at the following link: Willis Online.
To access the Willis system you will need to enter your username and password, as supplied to each official receiver and long term asset unit (LTAU – formerly RTLU). Office representative contact details are available HERE.
Full instructions on accessing Willis Online and applying for new insurance are included in the ORBS document entitled “Willis Online & Insurance Guidance”, which is available HERE.
Insurance should be effected as soon as the official receiver becomes aware of an asset requiring insurance cover. Cover will be provided from the date of the official receiver's appointment on the appropriate cases entered onto Willis Online, as long as notification is provided within 30 days of the official receiver’s appointment.
49.27A Assets identified 30 days or more after the official receiver’s appointment(Inserted August 2012)
Where assets requiring insurance come to light more than 30 days after the date of the official receiver's appointment, these can be insured by Willis but the cover will only be effective from the date Willis is notified of the assets.
49.27B Cancellation of automatic insurance cover (amended February 2014)
The official receiver's automatic insurance cover must be cancelled where:
The insurance should be cancelled within 5 working days of the insurance being deemed unnecessary. The cancellation should be entered on the Willis online system. The date of cancellation should be entered as the date that the insurance became unnecessary (the date of the annulment, for example) and not the date that the entry is made.
Insurance cover (and the liability to pay the premiums) continues until the official receiver instructs Willis that the cover is no longer required and should be cancelled. Willis never automatically cancels insurance, and only invoices for insurance premiums once the cover has been cancelled. It is important the correct date is entered to ensure that the estate is not charged for periods when the insurance was no longer required.
The need for continued insurance must be regularly reviewed, and the insurance cancelled within 5 working days once it has been decided it is no longer required.
For further cancellation guidance see paragraph 6 of ORBS Willis Online & Insurance Guidance HERE.
The cancellation of insurance (see paragraph 49.27B) should be noted in ISCIS, using the note group ‘General Administration’ and note type ‘Insurance to be effected’. Do not mark the notes “complete” until the insurance is cancelled.
49.28 Classes of risk outside of the automatic insurance cover (Amended August 2012)
The Willis Insolvency Open Cover scheme is designed to automatically cover most insurance risks. However, there are other classes of insurance risk which remain outside the scope of the automatic facility due to the nature of the risk or the infrequent need for cover. These risks, when insurance cover is required, must be placed separately by Willis in the open insurance market, and all relevant underwriting information must be immediately supplied so that Willis may approach underwriters. Details of trades and activities which are excluded or where the official receiver should refer to Willis Client Service Directors are included at Appendix 3 to the Willis Manual, available HERE on the ORBS intranet page. Contact details for Willis personnel are available HERE.
49.28A Cases where insurance cover required exceeds small non-trading case criteria (Inserted August 2012)For larger cases where the sums insured are exceeded and the criteria for small non-trading cases as outlined in Annex 3 attached to this chapter are not met, the official receiver will need to contact Willis by telephone to obtain suitable insurance cover. The cover needed may require Willis to place the insurance separately in the open insurance market and all relevant information should be supplied to Willis by the official receiver. Some examples provided by Willis of businesses where insurance will need to be obtained separately on the open market include art dealers, jewellers’ shops, racehorses and fish farms. The amount of the insurance premium should be agreed between Willis and the official receiver.
Once agreement has been reached with Willis the official receiver should complete the appropriate “Scheme Abbreviated Questionnaire” and return it to Willis. The relevant form will be emailed by Willis following discussion with the official receiver as to the unusual insurance required. Willis staff can give assistance in the completion of the questionnaire and may also arrange a site visit to confirm the insurance is adequate or give advice on security. Contact details for Willis personnel are available HERE.
49.28B Insurance for solely owned tenanted properties (Inserted August 2012)
Where insurance is either not in place on a tenanted property or that insurance is inadequate (e.g. landlord’s insurance including public liability and building insurance), this needs to be dealt with immediately. Providing the property is in use for residential purposes and is within the designated limits, most cases can be covered using Willis Online, as detailed at paragraph 49.27. Where a case does not fall into these criteria it will be necessary to contact Willis to agree individual insurance cover (see paragraphs 49.28 to 49.28A), generally this will be where a property is rented out to a business for commercial purposes.
The Willis Insolvency Open Cover facility insurance scheme no longer covers overseas properties, although Willis can provide insurance for properties overseas “off scheme”. As explained at paragraphs 49.28 and 49.28A, for excluded items or businesses Willis is able to place official receivers’ requests for insurance on an ‘open market’ basis with the scheme insurers, and this applies when dealing with cases where the asset is property outside of the UK (overseas). Open market business is handled by the Corporate Division of Willis based at Leeds. Contact details for the administrators of this work can be found on the Willis contact list, available HERE.
The fundamental differences between open market placements and the standard Willis scheme arrangements are:
a) Cover is not automatic.
b) Premiums are payable upon invoice.
With regard to (b) this can be particularly important where there is an overseas business, as taxes may be payable in the overseas territory for which an insurer is liable with immediate effect from the date of cover commencing. Failure to make the immediate payment of the premium when invoiced may result in cancellation of the cover by the relevant insurer.
The Case Help Manual Part Official Receiver’s Insurance (ISCIS) Paragraph 7 and ORBS Willis Online & Insurance Guidance HERE both contain instructions on requesting insurance from Willis for overseas property.
49.29 Payment of premiums (Amended August 2012)Willis invoices for insurance premiums only when the relevant insurance cover has been cancelled (this should be within 5 working days of its no longer being required). Willis will invoice the originating official receiver who should forward all authorised invoices to EAIPS for payment. For further guidance refer to ORBS Willis Online & Insurance Guidance available HERE. Payment of insurance premiums is regarded as an expense in preserving the assets of the estate and a debit balance on the estate account may be incurred or increased to pay any necessary insurance premium without specific authority but such balances should be managed carefully where there is unlikely to be a commensurate benefit to the estate (see also Chapter 36 paragraph 36.32 and paragraph 49.4).
49.30 Claims (Amended August 2012)
It is a condition of insurance policies that claims or potential claims are notified as soon as practicable. Therefore the official receiver should telephone Willis with preliminary details as soon as possible after the loss has occurred and immediately if circumstances warrant, e.g. loss of life or major property damage. In an emergency, outside office hours Willis personnel can be contacted at home (see page 6 of the Willis Manual available HERE and the Willis personnel contact list, available HERE).
49.30A Notification to other third parties and minimising further losses(Inserted August 2012)
Where the claim relates to theft, malicious damage, riot or other criminal activity the official receiver should also inform the police. In all cases steps should be taken to minimise any potential further losses and an estimate for replacement or repair obtained.
49.30B Appointment of a loss adjuster and attendance on site(Inserted August 2012)
When Willis are notified of a claim they will appoint a loss adjuster, if required, who may visit the site of the claim to ensure the official receiver's best interests are protected. In straightforward claims Willis aims to settle the claim within 20 working days.
49.30C Public liability and motor vehicle claims (Inserted August 2012)
In respect of public liability claims and those relating to motor vehicles the official receiver should make no admission of liability and all third party correspondence in relation to the claim must be forwarded to Willis unanswered, who will undertake to ensure that the relevant insurer takes control of the conduct of the claim and will deal directly with third parties or their representatives. Any writ or summons in connection with the claim should be forwarded to Willis immediately. Statutory certificates confirming the Willis Open Cover insurance for official receivers are issued annually, the current Employers’ Liability and Motor Insurance Certificates are available on the ORBS intranet site HERE.
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