Smoking ban will not stub out insurance premiums
16-Jun-2006
By Ken Watson, Business Development Executive, Risk Trading Practice, Marsh
The UK Government’s announcement that it would introduce a total smoking ban in licensed premises in
There had been a widespread expectation that membership clubs would be excluded from the ban which will bring the
The major concerns for many will be how to accommodate the smokers amongst their clients whilst keeping on the right side of the new regulations. For many who have external spaces such as beer gardens or even car parks, the only home for their smoking clients will be outside.
In
In my meetings with our clients and officials from the various club and licensing associations the question I have been asked ever more often in the months following the announcement of the smoking ban has been “what will it do for our insurance costs”?
In effect the ban on smoking will do little to the costs of a club or licensed premises’ insurance cover. The fact that there are people smoking in your club or premises is not a rating issue for insurance underwriters. It may well be argued that as there will not be anyone smoking inside the building it should make the potential for a damaging fire less than it currently is. However, under the vast majority of pub and club policies there is a stated expectation that all ashtrays and bins which have been used to collect the residue of cigarettes and cigars have been properly emptied and disposed off at the end of each night.
The fact is that the policies are based on the property risks such as the size of the building and the level and value, of the contents.
There has been much made of the liability issue surrounding passive smoking. You should already be taking clear and positive steps to protect staff from the effects of inhaling other people’s smoke and to provide systems for extraction of smoke your premises. It also has to be considered that there has yet to be a successful claim in the British courts over the effects of passive smoking. That is not to say there has not been any out of court settlements but for a plaintiff to provide that their illness or disease was caused by working or attending a specific site is extremely hard to do.
The one potential issue may well be whether facilities for smokers will be available outside of the premises and if so whether patio heaters or an awning will be provided. If they are, there could be insurance implications which need to be discussed with your broker.
As the Bill makes its way through its various stages of ratification there may well be some compromise in terms of the detailed regulations, which may ease the potential problems for clubs whose members enjoy a cigarette. The bottom line however, is that the smoking ban will not spark a cut in insurance prices.
For further information please contact:
Jo Williams, tel: 01732 877659, email: jo.a.williams@marsh.com
Bart Nash, media relations manager, tel: 020 7357 5356, email: bart.nash@marsh.com
Notes to editors
Marsh, the world's leading risk and insurance services firm, has nearly 30,000 employees and annual revenues exceeding $5 billion. The firm provides advice and transactional capabilities to clients in over 100 countries. Marsh is a unit of Marsh & McLennan Companies (MMC), a global professional services firm with annual revenues exceeding $12 billion. MMC is also the parent company of Guy Carpenter, the world’s leading risk and reinsurance specialist; Kroll, the world’s leading risk consulting company; Mercer, a major global provider of human resource and specialty consulting services; and Putnam Investments, one of the largest investment management companies in the United States. Approximately 55,000 employees provide analysis, advice, and transactional capabilities to clients in over 100 countries. Its stock (ticker symbol: MMC) is listed on the
