Archive for October, 2009

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Shop insurance – seasonal stock increases

Monday, October 12th, 2009

As we are moving into the Christmas period (yes, it is not that far away), you need to check your shop insurance policy for how much the stock is covered for.

Many, if not all, shops make over 50% of their annual profits in the period October, November and December. Yes, we may be coming out of a recession and by all accounts, we may be going back into one next year, but this will not stop the UK public going out and buying. Admittedly, we will not get to the heady days of 2007 and 2008 when credit card debt spiralled and people where buying, at times it felt, for the sake of it.

Some different types of business insurance policy do include terms which automatically increase the sum insured for stock for certain times of the year, usually leading up to Bank Holidays. Unfortunately, as we move into the darker nights, not only does your business get busier, so do the criminals. They know that you are going to have more stock insured, so, there are more break ins in the latter and earlier parts of the year.

Make sure not only that you have the correct security in force, as defined in you policy, but also that you have the correct sums insured in the event of a loss.

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Duty of disclosure – in relation to insurance policies

Monday, October 12th, 2009

Insurance policies are physically nothing more than pieces of paper with text. However, a policy is a contract of insurance which is governed by UK law. There are certain duties on both parties to the contract, the policyholder or insured and the insurer or cover provider.

The duty of every person (including businesses) when seeking insurance (either at quote stage or at each annual renewal) is to provide every material fact.

The mere fact of answering questions (say in a proposal form) is not enough. If there is a fact which MAY be material then this should be declared, whether there is a specific question relating to this or not.

If an individual does not declare information, which is material, then a claim could be turned down. The individual will always have recourse to the insurance ombudsman if they feel the decision was unfair. ie they do not think the fact was material to whether the insurer would provide cover or not.

As far as businesses are concerned, stating material facts as part of their business insurance quote process is absolutely vital. To make it easier when providing a quote, certain assumptions are made by all brokers/insurers. However, the actual quote you receive should have a list of all of the assumptions that have been made.

If any of these are incorrect, you must let your broker/insurer know. In law, it will be assumed that you, the business owner, knew you had a legal right to disclose material information.

Pleading ignorance will not get a claim paid for. The only escape is if you can prove that the questioning and or proposal form was so confusing that you could not be sure what to declared.

The only option is, if in doubt declare it and if it is accepted, get your insurer/broker to confirm this in writing to you.

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Good, cheap office insurance quote

Monday, October 12th, 2009

A customer phoned in for a quote for a small office. They had been with their existing insurance broker for a number of years and although the price had remained relatively static, they had decided to test the market.

The problem we had is that they asked us for two things which do not always go hand in had. The statement from the customer was “I just need a good, cheap office insurance quote“. That is the important sentence. There is nothing wrong with wanting a bargain, but we had to explain to the customer that, as with most things in life, you get what you pay for.

Before they thought that this was a precursor to us selling them some very expensive product, we did explain that the margins between a very cheap policy that has basic cover to a cheap policy with suitable cover were quite tight.

It is almost like the George Osborne speech at the Conservative conference, honesty in advance is always the best policy. The good thing about saying this to the customer, which was the truth, is that they were in business as well and know that we were being truthful. There is a certain amount of respect in business, whether it is visible or not is another story. If one business is realistic in what they say, the potential purchaser is more likely to go for them.

As it happens we saved the customer just under 10% and gave them interest free instalments, so all in all, a good deal for them. Not a massive saving but not one to be sniffed at.

If you look at some of the sites that offer to compare business insurance quotes, you need to be very careful. If they are guaranteeing to offer you a saving, whatever your business and whatever you claims experience, does this not sound a bit off? You are much better off getting your commercial insurance direct from a broker that is a bit more honest. Remember the other adage, if it sounds too good to be true, then it is!

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Selecting the best business insurance quote

Friday, October 9th, 2009

Buying business insurance can be a daunting and bewildering process. You know you need the cover, you hope you will never have to use it but you still have to pay for it and the biggest problem is – which company to choose to protect your business?

The difficulty is knowing what an insurance company is. You may decide to open a business and set aside some time to get a commercial insurance quote. The question is, do you go to an insurer, an underwriter, a cover provider or capacity provider?

You would be right to be confused as the choice is so varied. The additional difficulty is that one insurer, Company A, may not only insure direct and through brokers, they may also provide underwriting capacity to managing general agents.

Traditionally, Company A would insure 100% of a risk. Nowadays though, company A may agree with a broker that they will delegate authority to the broker to insure (or bind) risks on their behalf. The broker has more control (and can do things quicker)and the insurer (in theory) has reduced administrative costs and better quality business. This is what is known as an MGA or managing general agent.

There are two good things to help. Firstly, the Financial Services Authority has quite a tight control over the quality of insurers and there are good complaints procedures in place.

Secondly, there are thousands of insurance brokers. Rather than sitting at your PC or thumbing your way through a directory, you can speak to a broker instead. They will then make the choices for you, deciding whether company A is better for your office insurance or company B is better for restaurant insurance.

The brokers job is to find you the best deal at the best price, but they are regulated by the FSA as well and can be in trouble if they sell you the wrong product.

Utilising a broker to get your business insurance quote is really a win-win situation for you. It saves you time and money and, if you take out a policy through them, you get full support for the twelve month period of the policy.

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Fortis UK – only a few years to go

Thursday, October 8th, 2009

As a direct fall out from the banking crisis, one of the UK’s smaller insurers is going to go through a re brand exercise.

This is nothing to do with problems associated with a name, just a sign that the insurer is totally separated from its previous parent company.

The company in question is Fortis UK. You may or may not have heard of them, they tend to be better known in the commercial insurance schemes market. However, they are involved in personal/household insurance as well.

The re brand is expected to be part of a bigger push to grow both their domestic and business insurance book.

There has not been a decision about the new name and they effectively have a license until 2011 to use the name.

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Commercial building insurance

Thursday, October 8th, 2009

Business, commercial and property insurance policies are quite lengthy documents. If you have a claim or an issue with your policy, you will need to refer to the document.

This can be quite a daunting task. Your insurance broker will talk about certain technical elements of the policy. One of these is the perils that are covered. When we talk about perils, these are the events or risks that insurers will consider paying out on, if they cause damage or loss to your property.

Commercial buildings insurance covers the structure or fabric of a building, ie the floors, walls and roof.

The standard perils covered, by nearly all commercial policies are:-

1 – Fire (including arson by third parties)
2 – Explosion
3 – Aircraft (as in crashing into the building)
4 – Storm or Flood (storm would include weight of snow)
5 – Escape of water (including from burst pipes and water tanks)
6 – Impact (by own/third party vehicles and/or animals)
7 – Riot and Malicious Persons (riot as defined in legislation)
8 – Theft (including attempted theft)
9 – Breakage or collapse of aerials or TV masts (this doesn’t have to be caused by storm)
10 – Leakage of fuel (burst pipes cover requires a physical burst, leakage of fuel can be for any accidental reason)

In addition, you can buy cover for accidental damage and subsidence, heave and landslip. Later posts will cover this in more detail.

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Swine Flu – not gone and should not be forgotten

Wednesday, October 7th, 2009

You would be forgiven for thinking that Swine Flu has all but disappeared. This is not true. The virus is still out there and to those that catch it, it still has the potential to be fatal.

There is evidence, including from the governments own doctors, to suggest that only 10% of the alleged Swine Flu sufferers in the summer actually had the disease. The remaining 90% were a combination of people just looking for a few days off and those that were following all the advice and being very cautious.

The problem is that the virus is still around and the only certain thing is that there will be stronger outbreak in the UK. Many are predicting this will be during the traditional flu season in the middle of winter, but no-one can be sure.

The government were caught on the hop completely and dithered too much, then the advice came along with a Swine Flu call centre about 6 weeks too late.

Most of the staff (temporary) who were appointed to work on the helpline have lost/left their jobs.

As an employer, there are still some steps you must take. You have a legal obligation to protect your employees from harm. But, only harm that you are in control of. What we mean is that if you have employees that are subjected to persons with potential Swine Flu, say a doctors surgery or a pharmacy then you have a duty to protect your staff. You cant rely on your employers liability insurance, you can still face a health and safety executive prosecution if they feel you have behaved irresponsible.

Now is the time to sit back and review the advice and prepare for the winter outbreak, it will come.

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Business insurance quote – personal recommendation.

Wednesday, October 7th, 2009

If you own a business you will have, month after month, an amount of money which you pay out for your business costs.

Many of these costs are fixed, for example, your rates are something that you do not have control over as they are set by the local authority. Your rental payments are also unlikely to alter as they are fixed when you sign a new lease agreement.

There are other costs though which, if you spend some time looking, you can usually reduce.

Everyone over a certain age will be aware of how difficult it used to be to change your telephone, gas or electricity provider. It was almost set in stone that the company that covered your local area was the one that you were stuck with. Nowadays though things are much easier and, subject to whether you have agreed any previous deal, you can move your utilities and telecoms providers very easily.

It is, thankfully, the same with financial services, changing you business bank is also easier than it ever was. When it comes to your business insurance, this is something that has never been that difficult to change. The only difference in the current climate is that are some very competitive commercial insurance quote offers for businesses that have had a good claims experience.

But the question is how to find out the broker that will offer you the best deal? Don’t pick up the Yellow Pages as you will be faced with pages and pages of brokers. What you need to do is pop next door to your neighbouring business. Ask them who they use and what they think of their broker/insurer.

A few minutes spent chatting to your neighbours could save you some serious money, or alternatively, it could make you realise how good a deal you have (and your neighbour may move his insurance and thank you for this!).

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Restaurant insurance – damage to customers clothing?

Tuesday, October 6th, 2009

Every restaurant owner or employees at some point in their working life will have spilled food or drink on a customer. It may be the customers fault because they knocked in to you, but at the end of the day, the customer is always right.

95% of customers play the game and accept wholeheartedly an apology, particularly when you offer them a free drink or a discount on the bill. If they are a regular customer this will almost guarantee their repeat business as they will be impressed with the customer care.

But what do you do when you are faced with a customer who is not happy with an apology and/or a bit of discount? You still need to treat the customer with total care. However, if they want to make a larger claim against you then it is time for you to reach for your restaurant insurance policy to see how big your excess is.

Nearly all types of commercial insurance policy have an excess, this is the amount you pay towards a clam. The purpose of the excess is prevent insurers dealing with what they will consider petty or small claims.

Many policies will have an excess of £250 across the board for contents. You do need to check what the public liability excess is though, because it is normally less (around £100) and if you have damaged a customers clothing then it is under the public liability section you need to claim.

The customer should be satisfied that insurance is in force but you would normally ask for them to provide you with:-

a) Confirmation that the item of clothing cannot be cleaned or repaired.

b) Proof of purchase or an estimate for replacement

c) If possible, a couple of digital photos of the damaged clothing.

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Commercial insurance – looking for the best instalment offer

Monday, October 5th, 2009

Commercial insurance

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