Joro High Level Insurance Review & Recommendations

Prepared by: JORO
For: Project Blu Ltd
Date: March 18, 2025

1. OVERVIEW

Project Blu Ltd is an import, wholesale and e-commerce business specializing in pet products manufactured from recycled materials (e.g., cat/dog beds, leads, and toys). Based on the insurance documents provided, Project Blu has several insurance policies in place to protect against various business risks.

Current Insurance Coverage

Cyber Insurance

Insurer: CFC Underwriting Limited (underwritten by certain underwriters at Lloyd's and other insurers)
Annual Premium: £6,774.00 (including £699.00 Insurance Premium Tax and £250.00 administration fee)
Policy Period: January 22, 2022 - January 22, 2023

This policy covers cyber incidents, including data breaches, system damage, business interruption, and cyber crime. The coverage includes incident response, legal and regulatory costs, IT security, crisis communication, privacy breach management, and various cyber crime scenarios such as funds transfer fraud and extortion. The policy provides multiple coverage sections with limits up to £1,000,000 for most sections and lower limits (£250,000) for specific cyber crime scenarios.

Commercial Combined Insurance

Insurer: Arch Insurance (UK) Limited
Annual Premium: £8,183.68 (including £876.82 Insurance Premium Tax)
Policy Period: January 20, 2021 - January 19, 2022

This policy includes several key coverages:

• Property Damage: Coverage for machinery, plant, fixtures, fittings (£5,035) and electronic business machines (£2,014).
• Business Interruption: £3,500,000 with a 12-month indemnity period, covering gross revenue loss.
• Employers' Liability: £10,000,000 limit.
• Public Liability: £5,000,000 limit with a £500 third-party property damage excess.
• Products Liability: £5,000,000 limit.
• Legal Expenses: Coverage through DAS Legal Expenses Insurance Company Limited.

Marine Cargo Insurance

Insurer: Aviva Insurance Limited
Annual Premium: £525.00
Policy Period: January 20, 2022 - January 19, 2023

This policy covers pet products during transit with limits of £60,000 per vessel/aircraft/road/rail conveyance and £120,000 per location/loss. The estimated annual sendings are:

• Western Europe (Italy) to United Kingdom: £500,000
• Western Europe (Italy) to Western Europe: £2,000,000
• Western Europe (Italy) to North America (USA): £1,000,000

Management Liability Policy

Insurer: AXA Insurance UK plc
Annual Premium: £4,404.40 (including £471.90 Insurance Premium Tax)
Policy Period: January 20, 2022 - January 19, 2023

This policy provides:

• Directors' and Officers' Liability: £2,000,000 limit
• Employment Practices Liability: £250,000 limit with a £10,000 excess (reducible to £1,000 under certain conditions)
• Company Legal Liability: £2,000,000 limit with a £5,000 excess

Purpose of Coverage

• Public and Products Liability: Protects against claims from third parties for bodily injury or property damage arising from your business activities or products.
• Employers' Liability: Legally required coverage that protects against employee claims for injury or illness resulting from their employment.
• Property Damage: Covers damage to your business assets due to perils like fire, storm, theft, etc.
• Business Interruption: Compensates for lost income and extra expenses if your business operations are interrupted due to a covered event.
• Cyber Insurance: Protects against financial losses from cyber events like data breaches, ransomware, and system failures.
• Marine Cargo: Covers your products during transportation.
• Management Liability: Protects directors, officers, and the company from claims related to management decisions, employment practices, and regulatory issues.

2. COVERAGE TABLE

3. RECOMMENDED TESTS & CERTIFICATES BY PRODUCT CATEGORY

Based on the product categories visible in the Project Blu brochure (including product lines like Goa, Adriatic, Zambezi, Danube, Bengal, and Elbe):

Upload to your profile

Pet Beds and Soft Goods

Leashes, Collars, and Hardware Items

Supply Chain Documentation

Additional Documentation

4. BENEFITS FOR PROJECT BLU TAKING ADDITIONAL STEPS

Financial Benefits

1. Premium Reductions
   • Implementing recommended tests and certifications could reduce annual insurance costs by 5–15% (£700–£2,100 based on current premiums).
   • Maintaining comprehensive records as required for products liability can prevent premium increases of 25–50% that typically follow disputed claims.
   • Excess reduction on Employment Practices Liability from £10,000 to £1,000 by utilizing rradar advice services represents a potential savings of £9,000 per claim.
2. Claims Efficiency
   • Proper documentation can reduce claim settlement time by 40–60%, improving cash flow and reducing interruption to business operations.
   • Fast track claims processes (available for cyber claims and marine cargo claims under £5,000) can result in settlement within days rather than months.
   • Well-documented quality control processes can reduce the likelihood of claims being denied, avoiding uninsured losses that could exceed £50,000 per incident.
3. Coverage Optimization
   • Regular review of sums insured ensures adequate coverage without overpaying premiums.
   • Aligning policy renewal dates can simplify administration and potentially unlock multi-policy discounts.
   • Identifying overlaps between policies (like between cyber and management liability coverage) can eliminate redundant coverage and reduce costs.

Operational Benefits

1. Risk Reduction
   • Implementing recommended testing reduces the actual risk of product failures and associated business disruption.
   • Maintaining proper records enables faster and more targeted product recalls if necessary, limiting scope and cost.
   • Cybersecurity measures reduce both the likelihood and impact of cyber events, protecting business continuity.
2. Enhanced Claim Outcomes
   • Documented quality procedures strengthen your position in liability claims, leading to more favorable settlements.
   • Proper record keeping as required by the Products Liability policy improves the chance of successful subrogation against suppliers for defective components.
   • Clear business continuity plans maximize recovery under Business Interruption coverage by demonstrating mitigation efforts.
3. Reputation Protection
   • Faster claim resolution minimizes negative publicity and customer dissatisfaction.
   • Proactive risk management demonstrates corporate responsibility, enhancing brand value.
   • Proper insurance coverage ensures financial stability to maintain operations even after significant incidents.

Long-Term Relationship Benefits

1. Insurer Confidence
   • Demonstrated risk management leads to more favorable policy terms over time.
   • Proven quality control can justify higher limits of indemnity at lower premium rates.
   • Established history of proactive risk management can lead to broader coverage with fewer exclusions.
2. Business Resilience
   • Comprehensive insurance portfolio aligned with actual business risks creates financial stability.
   • Documented procedures build institutional knowledge that survives personnel changes.
   • Regular review of coverage ensures adaptation to evolving business models and emerging risks.
3. Competitive Advantage
   • Superior risk management can be highlighted in marketing materials and tenders.
   • Appropriate certifications may open access to more demanding retail channels and markets.
   • Financial stability from proper insurance coverage provides confidence to pursue growth opportunities.

By implementing these recommendations, Project Blu can achieve substantial cost savings while simultaneously strengthening protection against business risks. The investment in proper testing, certification, and documentation yields returns through both reduced insurance costs and improved claim outcomes, creating a more resilient business model in the competitive pet products market.