UK Underwriters Consider Implications of Smoking Ban

The U.K. will soon join a number of other EU countries in imposing a draconian ban on smoking in public places. As of July 1, lighting up in “all enclosed spaces,” including pubs, clubs and workspaces, will be prohibited.

As a result the UK’s underwriters are in the process of considering what the insurance implications of the full smoking ban might mean. An article on the Lloyd’s web site (www.lloyd’s.com) points out that “businesses across the country are preparing for the ban by making outdoor provisions for smokers.”

The article cites Ken Watson, business development executive of Marsh risk trading practice, who indicated that the ban would have limited consequences for businesses. “In effect,” he told Lloyd’s, “I expect that 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 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 are properly emptied and disposed of at the end of each night.”

Another underwriter, Hiscox’ John Heaney, however, thinks there may be some effect on policies, due to the reduction of fire related risks. He noted that “for years it has been good practice to allow smoking in designated areas. Now the change could have a significant impact on pubs and clubs which see a lot of fire claims.”

Heaney also warned that employers who fail to comply with the regulations could face passive smoking liability claims from employees. However he added: “Whether or not those claims succeed is something that we will have to wait and see. This could be seen as an emerging risk.”