Chosen topic?

John Watson talks to Sam Franks, the mastermind behind some of Hiscox's bespoke policies for professionals

“Standard policy wordings do not do justice to the needs of many professions or reflect the risks they face. There is room for a more focused approach,” says Sam Franks, a Regional Underwriting Manager for Hiscox.

Hiscox can provide specialism and expertise within its commercial business by truly understanding the risks certain professionals face in their line of work. These policies will help brokers highlight the cover for these particular risks and opportunities to clients seeking advice on a professional indemnity product.

One such profession is energy consultants. A combination of environmental concerns and rising costs is forcing the nation to re-examine the way it uses energy. That, in turn, is growing this new profession that has unique insurance requirements – something brokers and Hiscox can help with.

Sam says: “Look at the growth potential of this market. It has been spurred by legislation and new rules that have created the need for energy assessments. The increasing awareness of energy levels mean that businesses and consumers are now actively looking for help to reduce their use.”

The energy consulting sector is divided into two groups. Energy assessors evaluate buildings, providing a certificate of energy usage and recommendations on how the building might be made more efficient. Certification started with domestic properties in 2007, and has since spread to commercial properties and public buildings.

Sam says: “There is a second group of consultants who help you put recommendations into practice, such as specifying equipment, helping to modify the building or recommending different energy suppliers.”

From an insurance perspective, the risks are frequently misunderstood. “Many insurers put energy assessors and consultants in the same box as other property professionals such as estate agents and surveyors, but they face their own distinctive risks and deserve an all-encompassing cover,” says Sam.

An obvious hazard is a failure to conduct an assessment in line with legal requirements. While the liability for each failure may be modest, if the error is repeated the total cost of redoing hundreds of assessments could destroy a business. Sometimes an energy-efficiency project may qualify for public funding or grants, but an incorrect report or certification from a consultant could jeopardise the funding, again triggering a claim.

Sam says: “Another potential liability can occur if a client invests significant sums on structural alterations or on installing new equipment on the recommendation of a consultant, only for the promised energy savings to fail to materialise.”

Creating a bespoke policy allows a broker and an insurer to develop expertise in underwriting and handling the claims unique to a new industry. And that experience is vital – both in protecting the end customer and in setting them a fair price.

Hiscox already underwrites a dedicated policy aimed at energy assessors, which is distributed through both the open market and schemes involving the organisations that accredit assessors.

Proven track record
Sam sees much wider potential, with numerous businesses now working in the energy sector and a range of trade bodies serving different market niches. “We have an appetite to do a lot more, and there is great potential for brokers in the market,” he says.

“Hiscox has a proven track record for taking the time to understand a new sector like this and for being flexible in putting together policies that work for both brokers and the end clients.”

Sam joined Hiscox’s London office nine years ago as a trainee underwriter and then moved to Birmingham to specialise in PI. For the past three years he has been Regional Underwriting Manager, working with underwriters and brokers to create innovative insurance solutions.

The role of energy consultants and assessors will continue to evolve, and Sam says it is essential for brokers to get under the skin of these businesses. “Brokers must fully understand how they operate and what they do. It is a fast-moving sector and best practice today won’t necessarily be best practice three years down the line,” he says.

The insurance covers will continue to evolve alongside this new profession. Sam says: “Hiscox is very flexible. We can adapt and change policy wordings quickly to respond to new ideas from brokers. As underwriters, we are encouraged to think ‘Why should we write this risk?’, not ‘Why shouldn’t we?”