(Down) Time is Money

How about a new and worthwhile added value product for package business that will generate income and build client loyalty?

Welcome to ARAG’s Business Emergency Solutions.

In a previous life, I ran an insurance broker which operated from a high street shop unit for 18 years. One of the things that kept me awake at night was worrying about things that could stop me from trading. For example, if the boiler broke down my staff might well have to go home and the business would start losing trade immediately. However it was not just that, my credibility with clients was on the line. I stress easily, so something like that would be a real problem.

This is where the Business Emergency product comes in. It will pay for an emergency contractor to come out urgently and fix the problem. The policy has a range of events that are covered such as loss of power and lost keys as well as heating failure.

There are also a couple of new covers; fallen trees and fly tipping.

The policy would suit small businesses like shops and surgeries or other package business.

It is often difficult getting a contractor during normal weekday hours but what if your client runs a business that operates out of normal contractor hours? I used to open on a Saturday. Can you imagine being able to get a contractor out and then the cost if you can? However, with this new policy, we will have someone out quickly to get businesses trading again.

So how much does it cost? Price depends (as always) on volume and how the product is sold. One effective way of selling is by offering it as an opt-out. Anyway, I think you will find the price cheaper than you thought.

In these competitive days, we are all looking to create a difference and build customer loyalty and this product, newly launched by ARAG, could do the job.

If you would like to find out more about ARAG’s Business Emergency Policy contact the sales team either by email or call on 0117 917 1685.

Article by John Gray, Business Development Executive

A boost for the campaign against the Jackson reforms?

The campaign against the civil litigation reforms proposed by LJ Jackson received a boost recently after the response by three cost judges to the Green Paper was revealed by the Access to Justice Action Group (AJAG).

According to the Law Society Gazette the judges, “have broken ranks to object to radical reform of civil litigation” and were “unable to agree with the majority view of the costs judges”.

Backed by the Ministry of Justice (MoJ), the reforms include proposals to end the recoverability of success fees and After-the-Event (ATE) premiums, cap success fees at 25% of compensation awarded and increase general damages by just 10%. ARAG, AJAG, the Consumer Justice Alliance (CJA) and many others believe that such changes will significantly reduce access to justice and it seems the cost judges agree.

Describing many of the proposals as “inappropriate”, the judges have said in their response, “claimants who have suffered serious medical injuries could lose thousands of pounds intended to pay for their care”. They go onto say that it is often the conduct of the defendant that increases costs, so shifting the payment of success fees and ATE premiums to the claimant will cause “injustice”.

For ARAG and other legal expenses insurers who believe that ATE insurance helps access to justice as well as reduce costs by rooting out unmeritorious claims, a further comment describing the reforms on ATE as having “gone much too far” is a welcome one.

As pointed out in a Legal Futures article “the fact that important voices in the judiciary have such serious doubts about the reforms will give campaigners heart.” The fight continues!

The importance of Before-the-Event Legal Expenses Insurance

The publication of the In Case of Emergency Report by Consumer Focus caused a few ripples in the ARAG office when it was released last month, due primarily to its negative and often inaccurate account of Before-the-Event Legal Expenses Insurance (BTE LEI). Now, a couple of weeks later, we have had time to read through it and digest the findings only to discover that our initial concerns were confirmed.

As you may know ARAG is fighting the proposed civil litigation reforms as we believe that removing the recoverability of After-the-Event (ATE) insurance premiums will significantly reduce access to justice. The Consumer Focus Report also mentions the reforms but points to BTE LEI as a contender to fill the gap left behind. Yet, the Report itself is likely to cause more damage to access to justice by focusing on the negative aspects of their findings into the BTE LEI market and describing it as an “unnecessarily complex and shadowy market”.

These are the kind of statements that create the headlines, not the fact that 64% of respondents were able to give an explanation of BTE LEI (showing relatively high product knowledge) and 48% and 16% respectively were either satisfied or very satisfied.

Below are just a few examples where we have spotted some inaccuracies in the Report:

• Accepting that knowledge of any product or service is likely to be low amongst those that do not purchase it, the fact that overall 64% of respondents were able to give an explanation of LEI is testimony that it is well understood.


• Some favourable findings concerning BTE LEI policy information were excluded from the Report. The Report states that just 4% of respondents claim they received nothing when purchasing LEI. This along with an impressive response of 70% finding their policy information reasonably clear or very clear illustrates that considerable effort is made to treating customers fairly.


• It confirms that just 15% of respondents would not know what to do to make a claim. We would contest that this compares favourably to any other form of insurance product. Furthermore, excluded from the Research are details of those groups who have a greater than average 64% response on knowing what to do to claim.


• The Research comments that most people find the process of claiming straightforward, yet the Report fails to mention this preferring to highlight the fact that it is concerning that less than half of those surveyed (who had a successful claim) were satisfied with the process for making a claim.

ARAG is not afraid to accept criticism where it is due but the findings in this report seem to have been unnecessarily skewed in order to paint an unbalanced picture.

In principle we are not against such a Report and in fact commend the objectives set out. Some of the findings as they stand are very useful and will inform some of our decision making in the future, for instance improving product information and understanding. However, the Report as it stands does more damage than good.

Our worst fears confirmed?

As mentioned in previous posts here, ARAG have not hidden their opposition to Jackson’s proposed civil litigation reforms. In fact we have actively campaigned against them due mainly to our belief that they will reduce access to justice for the most vulnerable in our society.

It was then with some trepidation that ARAG’s managers sat to watch Justice Secretary, Kenneth Clarke announce to the House of Commons on the 29th March that he planned to implement the proposals in full.

I say with trepidation as it was only six weeks previously that ARAG along with 800 other interested parties submitted responses to the consultation paper Proposals for reform of civil litigation funding and costs in England and Wales. The first question for me would be how the Ministry of Justice could read and properly digest over 800 responses in 6 weeks, and ignore the overwhelming negative reponses to the Jackson Report.

• 71% disagreed that a success fees should no longer be recoverable
• 69% disagreed that ATE insurance premiums should no longer be recoverable from the losing party across all categories of civil litigation
• 64% disagreed that Qualified One-way Cost Shifting (QOCS) should be introduced

The reforms that Clarke wants to introduce include:

• removal of recoverability for lawyer’s success fees and after the event insurance premiums
• increasing general damages by 10%
• capping success fees at 25%
• one-way cost shifting

So is this our worst fears confirmed? Putting aside the impact on the Legal Expenses market, claimants will need to contemplate funding their disbursements which for the vast majority of society is virtually impossible, still face the prospects of paying costs if they fall to beat a Part 36 Offer and should they be successful in their action, damages will be reduced following the possible reduction of a success fee and ATE premium.

All in all it was a bad day for claimants. It is clear the government merely paid ‘lip service’ to the consultation process, not only ignoring the overall majority who responded, but concluded by being intent on wanting to implement a report that will damage the very cornerstone of access to justice.

ARAG will continue to campaign against the reforms both independently and via the Consumer Justice Alliance (CJA), Legal Expenses Insurance Group (LEIG) and Access to Justice Group (AJAG). We urge all those who really care about access to justice to contact their MP to voice their concerns and to also join the CJA and/or AJAG.

Are you always open for business?

Building on the success of the Home Emergency Solutions product that provides immediate assistance in the event of a domestic emergency, ARAG have launched a new product specifically designed to serve the needs of small businesses.

Filling a gap in the market, Business Emergency Solutions provides cover that protects business premises against situations such as vermin infestation, loss of keys, breakdown of the main heating system and many others emergencies that can halt a small business in its tracks. Health and safety regulations are such that emergencies can shut a business down until the problem has been resolved, often at a significant cost, causing stress and loss of earnings. This product aims to tackle these problems by ensuring that the insured receives prompt assistance from trained professionals. It’s distinctiveness in the marketplace is demonstrated by the comprehensive coverage of potential emergency situations (listed below) and its packaging within one convenient product.

• Breakdown of the main heating system


• Plumbing and drainage problems


• Damage to or failure of the premise’s locks and windows


• Breakage or failure of the customer toilet facility


• Loss of the power supply


• Lost keys


• Vermin infestation within the premises


• Removal of a fallen tree or large branch that blocks access to the premises


• Removal of fly-tipping waste

Find out more about Business Legal Solutions, including information about limitations and exclusions, on the ARAG website.