Business Insurance Blog

Fish and chip shop insurance – splitting your sums insured for contents

March 11th, 2010

To help make things easier for you when you look for a fish and chip shop insurance quote, you would be well advised to spend some time preparing the information you will declare to insurers.

Business insurance, as with other insurance, is a contract of utmost good faith or uberrima fides. This means that insurers trust that you will give them the correct information and they will in turn use that to provide you with a quote.

As part of your preparation work you need to calculate how much it would cost to put your business back in it’s current condition in the event of a catastrophic, total loss, fire for example.

Many people buy fish & chip shops or takeaways as a going concern with fixtures and fittings included. There is a danger in using these amounts when getting an insurance quote.

The sum insured for your contents needs to reflect the replacement cost as of the present day. You should split the contents into four areas. Stock, tenants improvements (improvements you have made to the building ie fixed flooring), any fixed frying range and then all other contents.

Frying ranges, in particular, to replace as new can be three or four times the figure declared when buying a business. Amounts up to £40,000 are commonplace for a full frying range with ducting. If this figure is not corrctly declared, any subsequent claim you make, whilst valid, could be reduced by a significant percentage due to under-insurance.

As always, speak to your broker for advice about how to calculate the correct figures.

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Business building insurance – mutliple properties

March 10th, 2010

Every single business in existence today has one thing in common, it would be able to trace it’s origins, however far back, to small and humble beginnings. The biggest brand names operating on the planet today started off somewhere, usually as an idea or from a single outlet.

The same applies to property owners, there are not many people out there who wake up one day and go and purchase a dozen or so buildings. What normally happens is that a single building is purchased and the yield from that property is used to secure additional funding for property number 2 and so on and so on. This is how empires grow. The best business empires have grown organically. Yes, there are successful businesses that have grown through a combination of organic and purchase, but the more stable, viable, long term businesses have grown slowly and carefully.

Commercial property owners insurance policies need to be able to adapt to the growing property empire. If you are seeking buy to let or landlord insurance you need to ensure that your policy can cover more than one property if you are looking to grow and add to your portfolio. Potentially, you may be happy to work with individual policies, but this can become cumbersome and difficult to manage, depending on the size of your estate.

If you now have a number of properties and are looking for cover, the best thing to do is to speak to a specialist business insurance broker. Your properties are your business, you receive income from them and therefore, you need a broker that understands your needs, wants and requirements.

One thing to make certain is that your broker and the insurer that they offer you cover through are both UK based and authorised and regulated by the Financial Services Authority.

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Salon insurance – sunbed cover

March 9th, 2010

A few years ago, you tended to get just two types of hairdressing salon. Either a ladies salon or a barbers. Then we started to progress and along came unisex salons, for both men and women. Nowadays though, you tend to still get a traditional style barber shop and then a variety of salons catering for everyone.

Many salons have also moved on to provide beauty treatments. You still get traditional beauty salons with no hairdressing but most are a combination of the two.

Depending on what beauty treatments you provide can have quite important salon insurance implications. For example, many insurers are now restricting the cover they will provide if you operate sunbeds.

Every business insurance company that provides this cover will have stipulations within the policy cover that apply to anyone using a sunbed. They will also say that sunbeds should be serviced regularly by approved persons and that a disclaimer is displayed on the wall. In reality, the disclaimer does not mean much if you the salon owner can be proven negligent, then a valid claim could be made against you.

If you do have sunbeds, you need to make sure that this is specified in your policy wording (that you can operate them and have liability cover). Speak to your broker and ask them to confirm in writing to you:-

a) That you have the cover in place and

b) What cover stipulations there are

Do not take their word for it, ask them for the sake of clarity, to confirm this in writing to you. They will not charge you for this and if they try to, ask for confirmation of their terms of business which states they can do this, because in reality this is part and parcel of the service from a broker.

In addition to the liability insurance, you also need to check that the physical sunbed is insured, particularly if this is leased, as it will be a condition of your lease agreement that you insure the bed. They can cost up to £10,000 each to replace, so make sure you are adequately protected.

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Restaurant insurance – help for you in reducing costs

March 8th, 2010

Running a business, whether your own or on behalf of someone else, is extremely hard work. If this business is a restaurant, then not only is it extremely hard work, there are pretty thin profit margins and the hours are long.

Finding cheap restaurant insurance may be something that is fairly high up your list of priorities, but finding the time to do this can be hard. As with any financial service or product, you do need to provide certain information in order to obtain a quote.

You have a couple of choices when looking for alternative quotes. On the one hand, you can visit a website that “offers” to compare business insurance and on the other, you can speak to a broker who is legally obliged to scour the market on your behalf and offer you the best price for the widest cover.

The problem we find with the comparison sites, is that they try to be all things to all men, you can spend ages putting in the required information and then, at the very end, they say you will need to discuss it with one of their representatives. This tends to happen more for licensed and food trade businesses.

If you choose to speak to a broker, then you will be conversing and discussing your insurance with a human being. Their job is to guide you through the information providing process to ensure that you give the correct information, the fuller the information the more likelihood there is of you getting a competitive quote.

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Employers liability insurance – should I bother?

March 7th, 2010

If you employ anyone, whether they are full time, part time, salaried or not, you will need to have employers liability insurance.

Many people get confused as to whether they need insurance or not. It is more than likely that you do need the cover. The worst thing that can happen is that you find out that you need the cover only because you have received a claim for a solicitor.

There are two reasons why you need the cover. If an employee gets to the stage of visiting a solicitor to allege that you have been negligent and to make a claim, then we can guarantee that is is going to cost money. Even if it a minor claim for an injured finger, the bill can be many thousands when you add up the solicitors bill, the settlement amount and the time you have spent dealing with it.

As well as this, as it is legal requirement, if it can proven that you have not arranging cover, in the full knowledge that you need it, you can be fined up to £2,500. This is not a total fine, this is per day! In reality this does not happen very often but what an incentive paying £2,500 per day can be to go out and get yourself commercial liability insurance.

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Small business insurance – protect your assets

March 6th, 2010

You have two simple choices when looking for a small business insurance quote. Do you go for just liability cover only, or do you extend this to include cover for your business assets?

When we are describing business assets, we mean tools, computers, stock and other equipment which the business has legal title to. You do not have to be a limited company, this will apply equally to sole traders and partnerships.

A basic policy can provide you with your business liability insurance covers for a few hundred pounds. However, if you sit down and list all of the current business assets and their current replacement cost. Then, add up your current stock holding and you may be surprised at how much it would cost to replace the physical assets that belong to the business.

It depends on the type of policy you have whether you can additionally include portable items such as laptops, mobile phones and P.D.A’s away from business. These items are more likely to be damaged or stolen. If you do have the occasional business trip to Europe or elsewhere, make sure that you policy covers you for this.

As with all quotes and covers, speak to a professional broker and get some free advice and a few different premiums so you can decide what cover you will take out.

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Takeaway insurance – public liability for deliveries

March 5th, 2010

All businesses, whether large or small, will have some potential liabilities. Whilst the risk may be there, the likelihood, in percentage terms, is usually very, very low.

As and independent business insurance broker, our role is to discuss with customers what their potential risks are, and to arrange insurance cover wherever possible.

Some risks are uninsurable (ie shop lifting & damage caused by wear and tear or poor maintenance) whereas for most, if you are prepared to pay, risks are insurable.

The key is to ensure that your policy does take account of all of your business activities. When we are considering takeaway insurance, we need to think about the additional risks beyond those at the risk, or shop, address.

One of these is the public liability risk when undertaking deliveries. We are not talking about the motor insurance, but the risk of your delivery driver causing damage. You may not think there is a high risk but there have been a fair few claims for curry stains to carpets when a bag has split.

Some policies will only cover this risk if you get it specified on your policy, others will include it as standard. The two things to be aware of are first, that your policy notes that you do undertake deliveries and second, that your third party property damage excess is not too high. A reasonable excess is £100, some insurers increase these to £500 which in reality, makes the cover not worthwhile.

Speak to an independent insurance broker and get some good, free, professional advice.

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Business insurance brokers and the FSA

March 4th, 2010

In the UK, since 15th January 2005, any insurance broker has needed to be authorised and regulated by the Financial Services Authority. The five year anniversary of this requirement has recently passed with very little mention.

Pre FSA, there was another body called the General Insurance Standards Council or G.I.S.C. This was optional to join and there was no real onus on a broker being a member. Most brokers where, but the GISC had no “teeth”.

Without a doubt, the FSA has been good and bad. It has increased the professionalism and financial stability (through regular checks and reporting). However, most business insurance brokers will criticise it for the vast number of rules and regulations which really do not help anyone.

If you are looking for a business insurance quote, you need to know whether your broker is directly authorised (ie they are more likely to be independent) or an appointed representative (ie indirectly authorised and more than likely no independent).

You want a broker that is free to choose, who and where they go to for a quote. Take public liability insurance as an example. For a plumber, using blow torches, as a sole trader looking for a £2,000,000 limit of indemnity. The premiums, depending on your insurer, can range from £250 to £750. Now that is a big difference. You want a broker to not only give you the best cover, but also the most competitive premium.

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Shop insurance – tenants improvements

March 3rd, 2010

If you retail from a high street location, you will normally spend some money investing in the property. If you lease the premises you will normally pay the landlord a proportion of the annual commercial building insurance.

As part of the improvements you may make, this could include developments to the structure, which if you moved out, you wouldn’t necessarily take, or be able to take, with you.

For example, fitted laminate flooring, fixed cupboards, improved lighting and wiring and partitions. These are all things which many retailers will spend money on. What you need to think about is, if there was, for example a burst pipe, and your nice laminate floor was ruined, whose insurance will pay for it?

Your commercial lease will, in the vast majority (95%+) of cases specifically exclude cover for improvements you as the tenant have made to the building. You need to ensure that your shop insurance policy covers these items. It is surprising when you sit down and add up the cost, how much it would cost to put all of your tenants improvements back.

A good size (1,000 sq ft) laminate floor, professionally installed, could cost up to £5,000. There is also the potential interruption to your business.

There are two things to do. First, ask your landlord who is responsible for tenants improvements. And secondly, if it is you, speak to your business insurance broker to ensure that you have adequate cover on your policy.

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Distribution insurance – stock only?

March 2nd, 2010

Business is all about supplying a product or service that someone is prepared to pay a fee, or mark up, for. If you buy a product at £5.00 you would be looking to make a profit by selling it for more than it cost you to obtain.

Importers, wholesalers and distribution agents all undertake similar tasks and therefore face similar commercial insurance risks. The main one relating to the stock, or goods they are importing, is who is responsible for arranging the cover?

Most of the major couriers offer a form of cover, this is usually restricted to £x per kilo. Which is fine if you are importing gravel, but more expensive goods could leave you out of pocket in the event of a loss.

Whilst there is not a standard distribution insurance product you will be able to arrange cover for stock anywhere in the world.

Firstly, you need to ascertain, through the contract you have with the supplier whether they are responsible for the stock until you receive it, or whether it is your responsibility once it leaves their factory.

Secondly, if you are responsible you need to speak to an independent business insurance broker. You will need to explain to them what your cover requirements are and they will then approach the insurance market on your behalf to obtain suitable quotes.

There are numerous different cover options available and it is up to the broker to deal with obtaining a range of quotes, because that is what they do.

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