You’ve probably noticed a few articles recently in the trade press asking if the limit of £40 per item insurance liability is sufficiently high enough. Clearly there are arguments for and against, however as many removers offer a choice of insurance packages for their customers, it seems to us that there is no reason why the client should accept this amount anyway.
Customers who choose not to purchase separate insurance are presumably focused on saving money, and providing the limited liability has been made clear and they have been offered a choice, many might say the argument is irrelevant. This reverts to the old argument of comparing like for like when being asked to quote for a move and somehow getting the point across to a potential client that cheap/less is not always better!
In an ever more litigious world, it’s possible that the £40 per item limit may become a problem. One idea that AIM has put forward is to make removal insurance mandatory on all jobs. However they go on to say ‘one reasonable argument against this idea is that there are customers that are willing to forego full insurance in order to keep the costs down, and someone needs to provide a service to those customers. If several small movers are competing for the same customer, then a cheaper option might help to secure the job. The problem of competing on price has always plagued the industry and there are many opinions on the subject, but we should consider the implications’.
The BAR took advice some months ago from their panel brokers (Reason Global and Basil Fry) and are still closely monitoring the situation. The advice they issued at the time was:
‘The Consumer Rights Act 2015 sets out a framework that consolidates in one place key consumer rights covering contracts for goods, services, digital content and the law relating to unfair terms in consumer contracts. This framework has recently raised some questions regarding whether the limit on quantum of liability would remain valid within the existing BAR terms and conditions. Both panel brokers have sought legal opinion on this matter and that opinion has confirmed the panel brokers view that the limit on quantum remains both legal and valid and that their approach on claims brought by consumers will remain as it has been, unaffected by the changes to the Act.
For the most part this has been confirmed in the consideration of claims since the Act became law. However, the Act has been invoked in claim challenges presented which are currently under consideration. As these challenges proceed to conclusion legal rulings may change the current view. An issue with the Act at this stage is the absence of any case law with the result that legal opinions vary. This is something that can only be treated on a case by case basis and should the approach of the panel brokers change, due to such a ruling, BAR and its membership will be informed promptly’.
That said we believe this topic deserves some open debate and to that end we are looking at scheduling a session at the upcoming Movers & Storers Show in Manchester to do just that. To date Basil Fry have agreed to take part and we would look to place this on Thursday 22 November at 12:00, so come along and have your say.