Partner Article

Coventry-based insurance specialist enter into niche market

The need for local manufacturers in the automotive supply chain to be protected from the financial fallout of product recalls has driven a Coventry-based insurance specialist into a niche market.

Inspire Insurance Services has joined a minority of commercial insurance brokers in the UK providing complex cover to compensate for monetary losses resulting from the recall of the insured’s product. Being headquartered in the regional heartland of the automotive industry, the independent broker recognised a particular need for smaller firms to be protected from risks associated with supplying component parts for mass car production.

Leigh Mackey, managing director of Inspire Insurance Services, said recent announcements of significant investments by car giants in the region were a timely reminder for those in the supply chain to be properly covered. He said: “The buoyancy evident in the region’s automotive industry will hopefully have a positive impact on its supply chain, with parts and services being sourced locally as well as from within the wider domestic market.

“Whilst this is potentially great news for suppliers, it highlights a worrying lack of awareness particularly among smaller manufacturers of the exposure that they can face. “Ultimately if a component part, no matter how small, is found to be at fault and results in a product recall then the supplier could be held liable for huge financial costs.

“Depending on the level of compensation, organisations can be put out of business because the awarded damages are so large so it is vital to minimise that risk.”

The protection is relevant to other sectors involved in the manufacture or sale of products against liabilities for losses from malfunctions or defects. The move into this new market is a natural progression for Inspire Insurance Services, whose core business was built upon the manufacturing sector.

In addition to extending into product recall this year, the company based at Westwood Business Park will be expanding into credit insurance to protect businesses from bad debts brought on by late payments and insolvency. Leigh said: “Product recall and credit insurance are among the most complex areas of insurance and as a result, only a very small percentage of commercial insurance brokers in the UK offer both.

“We are in the minority of brokers that understand the complexities and have access to policies that can provide bespoke cover.

“These are for firms who really need top end complex insurance arrangements and we are in the top 50 brokers in the country who can provide that level of protection. Based upon our expertise and experience, we can offer a competitive edge in a minority market.”

This was posted in Bdaily's Members' News section by Matt Joyce .