The information below is direct from the Financial Services Compensation Scheme (FSCS) website with regards to the European Risk Insurance Company going into default. If you have any concerns or queries please contact us on 0161 968 2030.
The Business Octopus are currently investigating solutions for clients who have insurance with ERIC. We will make contact with you when we have a further update.
Statement from FSCS:
The vast majority of UK customers of European Risk Insurance Company hf (ERIC), which is now in default, are expected to be covered, says the Financial Services Compensation Scheme (FSCS).
This means that FSCS may be able to pay claims against the firm. FSCS is working with the resolution board of the firm to assess the position of UK policyholders who may qualify for FSCS protection and on the handling of claims.
FSCS protects policies taken out in the UK in respect of EEA risks and policies taken out in the EEA (including Iceland) in respect of UK risks.
More than 24,000 people in the UK may have insurance with ERIC.
FSCS will protect many of the policies ERIC sold in the UK to individuals, small businesses and any policyholder who purchased compulsory employers’ liability cover.ERIC sold a variety of policies which qualify for FSCS protection. They include:
- Home owner insurance
- General liability insurance
- Combined commercial insurance
- Professional indemnity insurance
- Employers’ liability insurance
The Scheme protects compulsory insurance, such as employers liability insurance, in full. FSCS protects other general insurance policies for 90% of the value of the claim with no upper limit.
FSCS Chief Executive, Mark Neale, says: “We’re working closely with ERIC’s resolution board in Iceland on paying claims. FSCS will pay any protected claims as quickly and efficiently as possible. For the time being we understand existing policies remain in force.”
If ERIC policyholders have questions about their policy they will contact either their insurance broker or the European Risk Insurance Company on email: claims@erichf.com.
FSCS will publish updates on its website as necessary.
Further information can be found on ERIC Q&As
FAQ’s below:
- ERIC was based in Iceland so does the FSCS cover policyholders with the firm?
The vast majority of the UK customers of ERIC are expected to be covered by FSCS. FSCS will protect many of the policies ERIC sold in the UK to individuals, small businesses and any policyholder who purchased compulsory employers’ liability cover.
FSCS protects policies taken out in the UK in respect of EEA risks and policies taken out in the EEA (and Iceland) in respect of UK risks.
- Which ERIC policies may qualify for FSCS protection?
ERIC sold a variety of policies which may qualify for FSCS protection. They include:
- Home owner insurance
- General liability insurance
- Combined commercial insurance
- Professional indemnity insurance
- Employers’ liability insurance
- Are solicitors covered by FSCS?
FSCS protects individuals and small businesses. If the firm is a small business with an annual turnover of less than £1m at the time that you purchased one of these policies we should be able to help you. Where we can help protection will be at 90% of the agreed value of the claim (Protection is unlimited but if the policy contains a financial limit we have to apply that limit).
- Why does FSCS pay compensation at 90% of the value of the claim?
The limit is laid down in the rules set for FSCS by the Prudential Regulation Authority (“PRA”). There is no upper limit to our level of protection for insurance claims, although there may be financial limits and other terms expressed within the policy of insurance that will still apply.
- Who qualifies for FSCS protection?
FSCS protects individuals and small businesses against UK risks. The FSCS covers business conducted by firms authorised by the PRA and the FCA. European firms (authorised by their home state regulator) that operate and are regulated in the UK may also be covered.
- Does the FSCS cover all ERIC policies?
FSCS does not cover all policies or policyholders. For example:
- We do not protect any ships (including yacht) insurance policies.
- We do not protect large businesses unless they bought compulsory insurance, such as employers’ liability cover.
- We do not protect small businesses where they purchased credit insurance or goods in transit insurance.
- We do not protect reinsurance.
- FSCS protection is unlimited but if the policy contains a financial limit we have to apply that limit or other terms.
- What happens if I have a claim?
In the first instance you will need to contact either your insurance broker or the European Risk Insurance Company on email:claims@erichf.com
- I had a claim being processed by ERIC. Will I have to start again and apply to FSCS?
In the first instance you will need to contact either your insurance broker or the European Risk Insurance Company on email:claims@erichf.com. FSCS are not currently actively involved with ERIC claims.
- Should I cancel my policy now or make other arrangements?
We suggest you take advice before cancelling your policy. You should also take advice on making other arrangements to ensure you have insurance cover.
- I run a business and have a policy with ERIC. Is my business covered?
FSCS protects individuals and small businesses. If your business had an annual turnover of less than £1m at the time that you purchased one of these policies we should be able to help you. Where we can help protection will be at 90% of the value of the claim under the policy (Protection is unlimited but if the policy contains a financial limit we have to apply that limit).
If you are a business that purchased compulsory Employers’ Liability cover, you will be protected for claims under that cover whatever your annual turnover.
- I had a claim lodged with ERIC and need the money urgently. Can the FSCS do anything to help me?
Not at present. In the first instance you will need to contact either your insurance broker or European Risk Insurance Company on email: claims@erichf.com.
- Does FSCS have the money to pay claims?
Yes. Since 2001, FSCS has paid out more than £26bn to more than 4.5m people. The financial services industry funds us through a compulsory levy. We can levy the industry for the costs of claims.
- Can I claim for a return of the premiums I paid to ERIC?
In certain circumstances we are also able to assist with the loss of any premium you may have paid, but we recommend you check the position with your broker and that you take advice before making any decision to cancel your policy.
- How long will it take to process my claim?
Each claim is assessed on its own merits. Although ERIC has now been declared in default, we cannot say how long it will take to process your claim. However, FSCS will work with ERIC’s Resolution Board to ensure that outstanding claims are processed as quickly as possible.
- Who should I contact if I have a question about my policy?
In the first instance you will need to contact either your Insurance Broker or the European Risk Insurance Company on email:claims@erichf.com.
- I submitted a claim to ERIC and urgently need to settle it. Can you tell me what the status of my claim is?
Any queries relating to claims should be directed in the first instance to your Insurance Broker.
- Do I have to pay to claim compensation from FSCS?
We do not charge consumers for using our service.
- Do I need to use a third party to claim for compensation?
Consumers should be aware claiming compensation from FSCS is free and each application is judged on its individual merits. Some people may prefer to pay a third party to submit their claim for them.
Claims management companies can take a sizeable part of the possible compensation and are no more likely to make a successful claim than consumers can on their own.
