AXA announces changes to Liability declarations for furloughed workers

Important news affecting Wages and Turnover Rated Employers, Public and Products Liability Policies with AXA Insurance

Over recent weeks AXA Commercial Lines have introduced several changes to help our Property and Motor Fleet clients whose businesses have been impacted by Covid-19. We have also been considering how best we can similarly assist offer our EL & PL clients who have been affected by actions that limit their normal trading.

One specific area we have been looking at is dealing with “Furlough” payments to employees. Though these are still “Wage” payments from the employer, they can be recovered from the Government provided strict conditions are complied with around work undertaken. AXA therefore feel it would be unfair on our customers and would undermine the principle of these payments if we were to charge our customers premiums based on these payments. 

We are therefore with immediate effect introducing the following changes to Wages and Turnover Rated EL, PL and Products Liability policies (and relevant sections of Combined Policies).

Furlough Payments – EL and PL Policies - Wages Estimates and Declarations  

For renewals of EL and PL policies / Combined policy sections that are based on an estimate of Wages, we will be asking our brokers and clients to supply us with estimated Wage-rolls that include a full breakdown of the expected or actual Furlough payments the customer is recovering from the Government.  AXA will then base the deposit premium, and in due course any declaration adjustment, based on the “Net Wages” after deducting any Furlough payments recovered.

This change will apply to all cases renewed whilst the Furlough scheme is still in operation and will also be retrospectively applied to Declaration Adjustments for existing policies currently in force to ensure our customers do not pay premiums based on Furlough payments that have been funded by the Government.

Declaration Adjustment Clauses & Maximum Declaration Adjustments

Most AXA Employers, Public and Products Liability policies that are based on Estimates of Wages or Turnover include a limit on the maximum return premium that can be allowed of 10%. Some older policies allow a maximum of up to 25% whilst a few policies (mainly Motor Trade plus some lower premium combined cases) are not adjustable at all. 

To ensure that all our customers can benefit from the above concessions

• With immediate effect all Wages and Turnover Based EL, PL and Products Policies will be issued on an adjustable basis allowing a refund of up to 25% on declaration (including Motor Trade)
• We will extend the same concession retrospectively to all current live Wages and Turnover Rated EL, PL and Products policies including treating as “Adjustable” any policies that are not currently subject to a Declaration Clause (including Motor Trade policies)

Please note – These changes apply at New Business, Renewal and for Declarations. We are sorry but we are unable to renegotiate estimates mid-term – if customers who pay by instalments are having difficulty with making current payments please see our advice on assistance with Payment Holidays.

If you have any questions, please contact your local AXA Branch – and more importantly please talk to your normal AXA Underwriters to make sure we can obtain the more detailed information that will be needed to allow your customers to benefit from this assistance.

Authored by AXA