Guy Fitzmaurice examines how firms get the best deal on travel insurance for staff
Given that staff are one of a law firm's most valuable assets, arranging proper insurance cover for when they go abroad is an important exercise.
Firms normally get their general insurance broker to arrange cover, or they may talk directly to an insurance company. This will usually be block cover negotiated on an annual basis, covering medical expenses, baggage, airport delays etc, and covering all members of the firm for the first 90 days or six months of their trip. Some firms prefer to arrange individual cover for their partners. A contract to stay with a particular insurance company for two or three years will help to keep premiums down. Many firms will have additional foreign medical expenses cover through their BUPA or PPP schemes, which, according to one partner, is “a phenomenally cheap” way of providing cover. If a country is particularly dangerous, one City firm says it can legitimately charge its client for the protection premium it pays, but this is not common practice.
Several law firms polled by The Lawyer have retained the same insurance broker for the past 30 or 40 years, even if they put the relationship up for competitive tender every few years, but others prefer to use different brokers for different types of insurance. Says one partner: “There tend to be lead insurers for particular types of insurance. The rates are pretty much the same, regardless of the broker you use. It is a matter of being happy with the service your broker is providing. However, we always ask our broker to get a written quote from at least one other market maker.
Insurance companies like to know where their clients have travelled to, but firms have found that keeping precise records of who has gone where is an administrative nightmare. Says Martin Pexton, personnel director at Allen & Overy: “We used to submit patterns of travel, but it's a dreadful job to collate the figures and no two periods will be the same, so we stopped doing it.” Firms do not believe this failure to supply information affects their premiums.
Most City firms report a slight upward drift in premiums, caused by the market claims record as much as individual firms' claims records. All insurance premiums have had to take account of the 2.5% insurance premium tax recently introduced by the Government for all policies arranged after 1 October last year.
Guy Fitzmaurice is a freelance journalist.