Cash flow is critical to your business – insurance can help


In these challenging times insurance buyers are looking for proactive ways in which to support their businesses’ cash flow pressures.

We are consequently working with clients to look at a range of areas which can contribute. Each client and industry will of course have different nuances to consider, and therefore any action plan will need to be reviewed and agreed individually based on the specific circumstances and risk profile of the business.

Some core example areas where savings could be assessed include:

  • Considering registering unused vehicles in a client’s Motor fleet as off road via SORN (Statutory Off Road Notification) declarations. We have secured premium savings of up to 75% reduction in vehicle rate and even higher if accidental damage is removed and perils are restricted to fire and theft cover only.
  • Reviewing the impact of furloughing staff in Employers’ Liability coverage and considering adjustment mechanisms in the policies. It is preferable to agree now with insurers how policies should reflect furloughing staff to risk exposures and premiums. We would recommend that agreement is sought to exclude furlough payments from end of year declarations. Even if policies are currently non-adjustable it is worth a discussion with insurers to seek agreement to amend the basis of cover. For example, at least one insurer has now agreed to make all policies adjustable at year end and to exclude furlough payments from end of year declarable wageroll.
  • Considering whether to re-categorise staff during the period that they are not performing manual tasks. If manual employees are currently unable to perform functions and are effectively undertaking clerical functions then it is worth agreeing to recategorise them as clerical employees during the period they are not performing their usual function.
  • Discussing with your broker the impact on policy limits, sums insured and value estimates under current policy arrangements, e.g. marine sendings, turnover estimates. Whilst many policies are written on a flat basis it is worth discussing with your broker and insurers to see if the basis of premium can be reconsidered. In extreme circumstances it may be preferable to invoke cancellation clauses and rewriting policies on updated estimates or on an adjustable basis.
  • Consideration as to whether to adjust or temporarily remove unnecessary covers where appropriate / possible, e.g. Travel insurance.
  • Clients which have a Captive insurance arrangement can explore a range of potential supports such as premium holidays, suspending non-essential policies and utilising surplus funds in the Captive to offer a loan back to the parent company.

We would however caution against making radical or sweeping changes to business interruption covers, without fully reviewing recovery plans and projections in the future, as businesses operational models evolve rapidly.

Other areas to consider whilst not having an immediate impact on premiums include:

  • Unoccupancy clauses in property programmes – ensuring agreement has been sought to extend any unoccupancy warranty provision to ensure full cover remains in place.
  • The impact on engineering inspections – ensuring that your business remains in compliance with statutory obligations (it is likely that a back log in inspections may result in delays in getting inspections carried out even after restrictions are lifted).
  • Cyber exposures – how working from home impacts on Cyber exposures and controls around corporate accounting.
  • Directors’ and Officers’ Liability (D&O) – this was a tough market even before the Pandemic. Senior Management will be under increasing scrutiny during and after COVID-19 so it is important to maintain a robust D&O policy wherever possible.

Further details can be found by visiting our COVID-19 Pandemic Information Hub at:

Navigating a way forward

The Gallagher Major Risks Practice (MRP) is uniquely positioned to assist in all areas as regards insurance. Under one roof, our broking and client team, together with a Mergers & Acquisitions unit and Litigation unit, are able to deliver for you in these challenging times. We are ready to support you and your organisation to reassess and redefine a way forward.

Our objectives will be to:

  • Identify critical areas of the insurance programme where adjustments can be made to contribute positively to cash flow in these challenging times.
  • Set these out within an Executive Summary report which can be shared with your management teams.
  • Deliver confidence that these changes are balanced against the core valuable areas of your insurance programme being maintained and enhanced.
  • Ensure that all of the above reflects your risks, risk appetite and risk tolerance.

We would welcome the opportunity to engage with your management to highlight areas where we can add value to you based on your priorities for the business going forward.

If you would like to discuss further, please get in touch with Mike Ellis, Executive Director at Major Risks Practice:


Arthur J. Gallagher Insurance Brokers Limited is authorised and regulated by the Financial Conduct Authority. Registered Office: Spectrum Building, 7th Floor, 55, Blythswood Street, Glasgow, G2 7AT. Registered in Scotland. Company Number: SC108909