All businesses need to sell their products or services, this is the very basis of the UK economy. But, how do businesses meet others to trade with?

Exhibitions, trade shows, conferences and the like are ideal places for businesses to display their products and meet up with people who will eventully become customers.

Exhibitions range from those at the famous conference venues in London, Birmingham, Glasgow etc all the way to a local business selling it’s wares at a small village farmers market.

Businesses will have to apply to sell and usually have to pay a considerable sum for their “pitch”. One of the questions you will usually find on the application and fee form is whether you have suitable commercial liability insurance for your business.

The first thing that you must think of is that even if you do not have this cover, you are much more likely to get it cheaper than buying the exhibition organisers “recommended” scheme insurer.

If you have business or commercial insurance in place, you are almost certain to have public liability cover in place for exhibitions, at least in mainland UK.

Your employers liability insurance is, by legislation, not able to be restrictive so you will be covered. You just need to make sure that your PL covers you for business activities away from the risk or insured address.

Speak to you insurance broker to see if you have this cover. A good broker should be able to provide you with a single page “proof of cover” letter which you can show to the organisers to prove you have cover in place and do not want to buy their cover, which can cost in excess of £500 for a few days.

Most UK retailers fall into one of two categories. Those that trade purely online and do not have a high street presence and those that trade from a traditional street front address and may or may not also trade online.

Most insurers will quite happily cover high street retailers on a standard shop insurance policy. But what about the high street shops that some insurers do not want to underwrite?

Most can understand the increased risks presented by, say, a takeaway insurance policies, but what if you are running a newsagents or grocers and are looking for post office insurance?

Some insurers do not like to insure these types of risks mainly because of the threat of theft, either through break in or hold-up. The Post Office will cover the cash, stamps etc for which they are responsible, but it is still the retailers staff that can be threatened or seriously injured during a robbery. This would then fall to the retail insurance policy for cover under employers liability. Even if a member of staff is not physically injured, there can be understandable significant follow on psychological effects. These would , or could, result in a valid claim under employers liability.

For this reason, it is wise to be cautious and ensure you are covered by an insurance policy that specifically notes the type of trade or activity you are undertaking. Because the Post Office accept responsibility for contents and cash etc that belong to them, you still need to declare to your insurers what you do.

Usually, if a newsagents/grocers etc, you will run a sub-post office. Most full post offices are covered by the Post Office themselves.

As with all business insurance, speaking to a broker is the way to go, do not rely on a business insurance comparison website to cover you in the event of a claim. Be assured you have the correct cover by speaking to an insurance broker.

If you arrange house or car insurance, the process is relatively easy. Insurers have such a wealth of statistics, that the level of information required to provide a quote is very little.

When arranging commercial insurance, whilst the process is not vastly different, you do need to declare certain information. To enable you to get the most competitive quote, you would ordinarily speak to a business insurance broker and ask them to arrange quotes for you.

Your broker will collate information from you, the business owner, and approach a number of insurers to get full written premium indications. If you are looking for commercial liability insurance as part of that quote, you will need to declare your estimated turnover and wage roll for the next twelve months.

The purpose of declaring this information, is that your insurer will rate your premium based on these figures. The higher the wage roll, the higher the employers liability risk and the higher the turnover, the higher the public and products liability risk.

The difficulty is, that one of the few things that you can be certain of when declaring your estimated turnover and wage roll is that it will be wrong! There are not many businesses, that can estimate their business activity correctly. As long as you are realistic in your estimations, this is all the insurers can ask.

If you estimate your turnover to be £500,000 and your receive and accept a quote based on this, you would need to advise your broker if it becomes apparent during the year that this is likely to be exceeded by at least 10%. This way, you are doing everything correctly as far as the insurance is concerned and are giving the insurers no reason for saying that you have not declared a material fact ie that your business is trading far in excess of what you declared at inception.

Owners of commercial or industrial buildings will either own their building outright or they will have some sort of finance, funding or mortgage for the purchase of the property.

Where commercial funding is being provided this can be repaid over a number of years, very similar to a residential property mortgage.

As a condition of this funding, the party providing the finance will usually insist that a commercial building insurance policy is taken out for the building. What they are effectively doing is requesting that the asset is protected, as far as it reasonably can be, from the usual insurance perils.

The individual or business is therefore protecting themselves through the purchase of a property owners insurance policy. The last thing that want to be doing is paying a 20 year mortgage on a building which no longer exists because it has been destroyed by fire. With a suitable commercial property insurance policy in force the funding provider will usually ask for their financial interest to be noted.

What this means is that if there is a loss and there is still finance provided, then if the insurance policy is cancelled, for example through non-payment, the finance providers are notified of this. They can then choose to either pay the insurance premium themselves or add this to their own insurance policy.

Don’t listen to anyone that says you need to pay for an interest to be noted. It only takes a couple of minutes to arrange and a good insurance broker should do this for you, and notify your solicitors, free of charge.

Buy to let insurance is a phrase that has only cropped up in the last few years. As a result of the UK’s army of landlords there is a need for specific insurance for properties that are let out.

The mortgage (debt) boom of the last 10 years has resulted in a considerable number of landlords owning two or less properties. Most are deliberate landlords who have chosen, rightly or wrongly, to take on a commercial loan for a property in the hope that the rental yield will exceed the mortgage costs. However, given the calamitous events in the past couple of years we have seen that the banks did not have a clue what they were doing. This has resulted in accidental landlords, people who have let their existing property, because they cannot sell it, and moved elsewhere.

Whatever type of landlord, there needs to be a valid buy to let or commercial building insurance policy in force on the let property. A standard household or domestic insurance policy is not suitable, however cheap it may be.

Most insurers will provide a policy for this, it is a straight lift or copy of a standard residential policy, but it includes loss of rental income and notes that there are tenants.

Insurers prices are based on a few different factors, one of these is the type of tenant, including whether it is unoccupied.

In simple terms, insurers prices are based on their experience. Think about fish and chip shop insurance as opposed to hairdressers insurance. The fish and chip shop has more likelihood of a fire (which will be substantial), they are open later so have the potential of malicious damage and they also represent an increased risk of slipping and tripping for customers and staff. Now, we are not saying that hairdressers or beauty salons do not have claims, but they have less claims. Insurers therefore offer better prices for the risks they want.

So, a buy to let property that is vacant will need to go on an unoccupied building insurance policy and will be rated higher than one that is let to professional tenants. You will also need to declare if tenants are receiving support from the DSS or whether the property is let to the local authority or to students. Insurers are not being sanctimonious, they are just pricing the risks dependent on how likely it is that they will suffer a loss.

Having said that, some insurers prefer student/DSS lets and charge quite reasonable prices. The place to get these prices is from a business insurance

The majority of commercial insurance policies have restrictions relating to theft cover.

For their to be a valid claim for theft the insurance policy will have a forcible and violent entry/exit clause. In simple terms, this means that someone has to actually break in using force and violence. Or, to a lesser extent they need to hide in the premises during opening hours and then break out later on.

These clauses will apply to insurances for warehouses, manufacturers, engineers all the way to a standard shop insurance package.

The reason for this is fairly understandable as insurers will not be able to pick up claims for shoplifting and/or unexplained stock disappearance.

There are two types of policies where you can have cover without this restriction, office insurance and hotel insurance.

Many larger commercial insurance companies will automatically include this cover. Others however request that this cover is “bought back”.

You should check with your insurance broker whether you have this extension. If you purchase a policy from a site that offers business insurance comparisons, you should be extra cautious as this is more likely not to include this cover. The problem is that you may not be able to buy back this extension, whereas dealing through a broker will take this hassle away from you.

Many years ago, well at least 20 you were very restricted on where and how you could buy your business insurance. Restricted to only one option really, through a broker face to face.

You would look in your local yellow pages or Thomson’s and find a broker, give them a call, they would visit you and at some pre-determined date in the future you would receive a quote. This still goes on and there is absolutely nothing wrong with this process whatsoever.

However….some people want things a little bit quicker, like now and don’t have the time for any more than a 10 minute phone call. So, they go onto the Internet and search for a broker or a company that they think is going to offer them what they need. The problem is that, instead of too little to choose from there is far too much.

Buying commercial insurance direct is a bit confusing because, what does it actually mean? Simply put, you are buying direct from the insurer or supplier. Now this may seem like a bargain but you will get the same prices direct as you would from a broker. A direct commercial insurer will sell you different policies but, they only have one type of commercial building insurance and one type of office insurance etc etc. You have no choice, like Henry Ford’s “any colour as long as it is black” you may not be getting the best deal. Henry got away with it because his company was the only one selling the product so cheap. However with business insurance things are different.

Don’t get stuck buying direct, you do not make any saving whatsoever.

Most UK restaurants and takeaways, apart from the major chains, will operate a delivery service of some sort.

Traditionally deliveries were undertaken by moped or scooter riders in the bigger cities. Whilst this still continues, many have now taken to employing drivers delivering in cars over the busy periods.

But what happens if the delivery driver causes some sort of damage at the premises which they are delivering to? This should be covered under a restaurant insurance or takeaway insurance policy that the owners of the establishment have taken out.

However, if you read into the small print of the policy wording it will actually restrict the public liability insurance to activities undertaken at the business address. Therefore, the delivery driver is not automatically covered under the PL of the restaurant or takeaway.

This should not present a problem as you would normally just need to declare this to your insurer or broker. They should be able to extend the business description to something along the lines of “Restaurant including deliveries”. The danger is to assume that the commercial insurance policy you have bought covers you automatically, this is not always the case, particularly if you have bought what appears to be a cheap policy online.

The delivery driver will still need to purchase their own motor insurance, but the public liability will cover them for damage that they cause.

Businesses in the UK have three choices as far as commercial insurance is concerned.

Firstly, and not recommended, is to trade without insurance. There are obviously huge risks to the business, let alone the possibility of being fined if you do not have legally required cover such as employers liability.

Secondly, a business can choose to insure both their business assets, such as buildings, fixtures and fittings, contents and stock and their liabilities. This is a more expensive option but protects the business from a much wider range of events and risks.

Thirdly, some businesses may not have business assets to insure and are just looking for a commercial liability insurance policy. These policies have three main categories of cover. Employers liability, which is required under legislation if you have anyone working for you. Public liability, which covers the business for damage they may cause to other persons or property. Think of a plumber setting fire to a house, this is public liability. Lastly, there is products liability in the event of damage caused by any of the products manufactured or supplied by the business.

Most UK business insurers will have policies that cover these three liabilities. Limits of indemnity, or levels of cover, can be chosen from £1,000,000 upwards. For employers liability you must have a limit of indemnity of £5,000,000 as a minimum. Most insurers will provide a limit of £10,000,000 any one claim.

The problem with liability only policies is some insurers price themselves out of the running for the higher risk trades. Whereas others are quite keen to underwrite this cover.

If you are looking for a basic liability only policy the best process to go through is to speak to or discuss your insurance requirements with a business insurance broker. You don’t have to have face to face visit, speaking to one over the phone can be just as productive. Particularly as brokers that deal over the Internet usually do not have to pay expensive office rents and salesperson’s wages. They can then offer you a better saving.

As with all products and services, you need to get a range of quotes, at least two or three, to compare them. An insurance broker will do all of this work for you to save you having to speak to the insurance companies direct.

All commercial building insurance policies will be based on three main factors. There are others but the location of the property, the type of occupancy and the sum insured are the three main variables.

Commercial insurance companies will provide a premium or terms based on these three factors.

The sum insured is very important as it needs to represent the rebuilding or reinstatement cost of the building to be insured. Insurers cannot give you any help on this figure. Every type of property from commercial buildings to industrial units to office buildings are different. So, the sums insured for a 1,000 square foot office in Cornwall is different to one in Cheshire.

If you are sensible you will get an insurance broker to compare insurance quotes for you to find the best price/best cover combination. Whilst the insurance broker cannot provide you with a correct sum insured, they should be able to spot if the figure is a bit light.

As a very rough rule of thumb only, for commercial buildings (excluding offices) you need to use a figure of £50 per square foot or £540 per square metre. If the building is in London, Manchester, Birmingham, Liverpool, Glasgow or Edinburgh, you should add another 30 to 50%.

This is per square foot on each floor as opposed to the square footage on the ground floor only.

There are building’s where this basic rule of thumb should not be used, these include:-

Any building constructed prior to 1900
Any listed building in Scotland, Wales or England
Any building constructed of non-traditional materials

One other place where you can go to get an idea of the correct cost, is to your bank if they are providing funding. As with a normal house purchase, if your bank lends you money they should have an idea of the rebuilding cost. If you are not borrowing the full amount, please do not confuse the “minimum amount to insure” with rebuilding cost. The earlier of the two is the banks minimum amount to protect their loan or investment and is not sufficient for a sum insured.

Speaking to an insurance broker is, as ever, the best way to deal with your search for cheap commercial property insurance. Don’t trust a website from a company you have never heard of, speak to a human being for the best deal.