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Archive for July, 2010

Commercial insurance – getting a quote

Wednesday, July 21st, 2010

Since the year 2000, there has been a real sea change in the UK as far as consumer rights are concerned. Gone are the days when you had to take whatever was offered, when you looked for a commercial insurance quote.

Nowadays though, you have so much choice that if you have the time, you can get an endless amount of quotes and indications from as many providers as you want. There is of course, a small difficulty with this. The problem you will face is not that you do not have enough choice but that there is too much.

Whilst we always bemoan the fact that there is not enough choice, no-one wants to have too much. If you eat out regularly in different restaurants, you will, at some point, have sat down with a menu and wished there was less on the list.

As more and more people get broadband and internet access on their smartphones there are an increasing number of websites that offer financial services. In the UK there are approximately 2,000 independent business insurance broking companies. We estimate that 80% of these have some form of web presence. Many of these firms have more than one office, so you have more than the 2,000 to choose from.

This makes things easier for you when searching for that elusive quote. When you have an independent broker, with access to a number of insurers who are desperate for your business, why would you search for your quote direct from an insurer? They can only offer you one product. A broker can offer you dozens of products. This saves you having to make the choices yourself, they will recommend what they feel is best for you. If, in the rare event, they get it wrong you have a huge amount of regulation in your favour to pursue a claim against them for mis-selling.

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Unoccupied commercial building insurance – how to get a quote

Tuesday, July 20th, 2010

Although the UK has a great history in financial services (including business insurance), it can seem at times that getting the right quote is akin to searching for the elusive needle in a haystack.

As we go through the tail end of the recession there are still a huge number of buildings and properties throughout the UK which remain empty. This is either because property owners cannot get the properties rented out or they are just biding their time until rental incomes increase.

In the meantime, as a property owner they need to make sure that they have adequate cover for their property. This covers two points, firstly there is the actual cover (ie fire, storm, flood etc) and secondly, there is the issue of making sure that the insurers have this covered on the correct policy wording.

As a business insurance broker, we have access to many different insurers and as you can imagine, each insurer has dozens and dozens of different types of policy wording. What this means is that you could have a property that is tenanted by a third party, owner occupied (including for business purposes) or it could be empty. Certain companies may cover this on one type of policy, whereas most will have a different wording for each type of tenancy (or otherwise).

The reason that insurers do this is because they have spent many years understanding the different types of risk associated with the different types of premises. This is why there are policies specifically for unoccupied building insurance. A standard policy will give much wider cover and a better price, for tenanted premises. As soon as it is empty or unoccupied, insurers will restrict the cover and charge a higher premium.

This may seem unfair, but the good news is that there are, amongst all the covers available, policies that do not charge the earth and do not have cover that is too restrictive. Don’t bother looking for the diamond in the rough yourself, come to us and let us do the hard work for you.

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Subsidence – make sure you have adequate cover.

Monday, July 19th, 2010

Since the terrible summer of 2007 and the floods across the country we have not had such dry weather. 2008 and 2009, whilst not so bad, were hardly the summers we remember from the past.

No-one will forget the Met Office announcing with great fanfare that 2009 was going to be a “barbecue summer”, only to state 5 months later that this was only a 60% prediction, which of course was wrong.

As a result of this, the business insurance companies, that insure buildings and properties, have seen a marked dip in claims for subsidence over the past four or five years.

We have had cracking weather in 2010 so far, a few blips of course, but the “phew what a scorcher” headlines have been justified. Whilst we have had a good summer, we have also had a very dry winter. A lot of snow of course, but this has not soaked through to the soil under our houses and businesses.

We are starting to see an increase in claims under business building insurance for cracks in the actual structure. The causes of subsidence are many, the main ones being a simple draining of soil, which results in shrinkage which cracks the structure and tree roots, in search of moisture, drying out surrounding soil.

With the advent of websites that “offer” to compare business insurance, as they are price driven, there is an increase in quotes being provided at a very basic level. What this means is that people are getting quotes without subsidence, because it can be 10 or 20% cheaper.

This will start to be a problem as people start to have claims and then realise that there is no cover in place. The first thing you should do is speak to a business insurance broker and get them to review all of your insurance requirements, one of them being the cover you have. Secondly, if you do not have subsidence, heave or landslip (the 3 main covers) either get this added to your policy or take out a new one with this, vital, cover.

Posted in block of flats insurance, business building insurance, business insurance, commercial building insurance, commercial insurance, commercial property insurance, commercial property insurance quote, commercial property owners insurance, compare business insurance | Comments Off

How much does business insurance cost?

Sunday, July 18th, 2010

As we have now exited the UK’s worst recession for many, many years, there are some people that have decided to make the most of this new era. They have decided, for one reason or another, that now is the time to start their own business. This may be you and you may have harboured thoughts of starting out on this road for years.

You will, of course, know exactly what type of venture you will start, this is step one. Step number two on this path is to sit down and cost out exactly how much, or how little, you will make in your first few years.

Business planning software is available, free, from most UK banks. This is where you put all of your figures and projections, at the end you press the button and see what your first years profit is likely to be.

But, most of the information you put into this is guess work, it cannot be anything else. You do need to be as precise as possible though. One of the items on your long list will be business insurance.

It is difficult to estimate exactly what your business insurance cost will be in the first year. You can, though, get a very good idea from speaking to an independent business insurance broker. Of course, you need to give them certain information, some of it will be thrown up by the rest of your business plan, such as turnover, wage roll and gross profit.

The brokers job is to take all of this information and to provide you with a written quote. If your business does not yet exist, then any quote is only likely to be an indication. You will though be able to stick the monthly costs into your plan with some confidence that they are going to be within 10 or 15% of the actual, final cost when you start. Good luck!

Posted in business insurance, business insurance broker, business insurance cost | No Comments »

Office insurance cover – tenants improvements.

Saturday, July 17th, 2010

Most office insurance policies are designed to be all-encompassing and to provide office based businesses, with the range of covers they will need.

You will normally have certain sections of cover which are included as standard. Removing them does not alter the cover, usually these are money, business interruption, public and employers liability.

In addition to these, there are other sections which you can choose to add if required. The two main types are for buildings and equipment cover away from the premises (such as laptops and smart phones).

The buildings cover is self explanatory. If you own, or have full insuring and repairing lease, then you will need to have a separate section covering the office premises.

But, if you lease the premises, you may choose to make adaptions, adjustments and improvements to the building itself. This may cover, putting in new toilets, partition walls, false ceilings or high tech wiring. If you chose to move away, you would not normally take this with you as they are all improvements to the building.

If there was a fire though, then the cost of replacing these items does not fall under the landlords insurance, it is your responsibility as you have the financial interest or financial ownership.

This is why you have a secondary type of buildings cover, for tenants improvements. It is much cheaper to insurer than your standard office contents, because it is less likely to suffer a loss.

Just sit back and consider if you need to insure any tenants improvements. A good starting point is you lease, it should specify in there what you are responsible for. If you have spent money in these areas, you need to check that your business insurance policy has cover for this. Typically, for £10,000 of tenants improvements, it will only cost you around £30 a year to add to your policy.

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Takeaway insurance – are delivery drivers covered?

Friday, July 16th, 2010

Takeaway insurance is one of those types of policies that can, depending on the provider, be really expensive or too cheap.

The reason for this is that you can be faced with a commercial insurance company that wants to be a player and needs to have a policy for every type of customer. But, what they really want is the good, profitable business and takeaways can, at times, be very unprofitable.

So, you have some companies that simply price themselves out of the market. On the other hand, you will have others that either a charge a makrket, ball park, rate or they just come in with an exceptionally cheap quote.

Although we are still feeling the pinch of the worst recession in living memory, you should not scrimp and saving on your insurance. What happens if, as most takeaways do, you have delivery drivers?

They will have their own car insurance, unless you provide a fleet of vehicles. But, what about the damage they may cause at someones home during the delivery? Yes, it is unlikely, but if it does get to the stage of a claim, then this is because there has been serious damage. A spilled curry on a carpet is going to set you back hundreds, if not thousands of pounds.

The cheapest policies may either not provide you with this cover or they may have such a high excess, it is not worth having anyway. This is when you need to make a decision, do you need to save £50 or a £100 when the cover may not be quite up to scratch?

The answer is of course no. Try and get your policy on interest free monthly instalments and spread the cost, this way it may not seem quite so bad.

Posted in business insurance, takeaway insurance | No Comments »

Professional indemnity insurance – what limit of indemnity should you choose?

Thursday, July 15th, 2010

When you look to get a quote for your business insurance, your cover will be in amounts or limits of indemnity.

For example, you buildings, contents, stock and computers will be in amounts that it would cost to replace. Whereas your employers, products and public liability will be in limits of indemnity, the maximum payout the insurers will make, either any one claim or in total in a twelve month period.

Professional indemnity insurance is a liability insurance cover, you do not get a physical asset insured, but a maximum limit of indemnity. The question you will need to ask, is what is the correct limit. You can still get a limit of indemnity of £100,000 if you look carefully enough. The big multi-national corporations and banks will have limits in the tens of millions and after the last few years, boy do they need it.

You on the other hand, may only need to have the cover in place as a protection for your business. The advice or services you provide, could potentially cause a business to have a financial loss. Think worst case scenario, if one of your contracts went horribly wrong and everything you recommended went wrong, what is the most that you could have to pay out? The £100,000 limit may seem high, but in all likelihood you will need to think about limits nearer to £250 or £500k and upwards. The premium differential is not huge, so it may be worth considering a higher limit.

On the other hand, if you are working for a company that insists on you having this cover, then you will need to have in place a limit at the amount they choose. There is really not that much choice here, if they say a £1,000,000, then to get the contract you need to have the cover in place.

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Products liability insurance – watch your export cover.

Wednesday, July 14th, 2010

If you are in business, for example as a wholesaler, importer or exporter, you will more than likely have a bespoke wholesalers insurance policy in place.

This will give you the cover that you would normally need, the most important one being for your stock. Without this (your stock) your business would not survive.

There are other covers though that you will need to have in place because, in the event of a loss, the business could suffer financially. One of these products liability insurance, if you supply a product, even if you have not made it yourself, then you need to have this cover. Not legally though, the law does not insist on this, but a sensible, prudent business will have a suitable policy.

If you export, then your insurers need to be aware of where you export to. In the EU is fine but if you export to the United States and/or Canada, then insurers will start to ask a lot of questions. The reason being that claims settlements in North America and Canada are typically 10 to 15 times higher than the UK. A good proportion of this goes to the solicitors or lawyers but as insurers face potentially significant costs, they need to know all about this.

Whether or not you can get the cover depends on the type of products, where they are sourced from and the percentage of your turnover that relates to these exports.

You may hear horror stories of minimum premiums of £10,000 plus from certain business insurance companies. But, this is where good old Lloyds of London comes into it’s own. Find a broker that can access Lloyds on your behalf and you will likely find a much cheaper quote.

Posted in business insurance, wholesalers insurance | No Comments »

Employers liability insurance – cover for work placements.

Tuesday, July 13th, 2010

Anyone in business will know, that if you employ people, you need to have adequate employers liability insurance in force. When we say adequate, it has to be for a minimum limit of indemnity of £5,000,000 any one loss and the cover has to be provided by an insurer approved to trade in the UK.

This cover has been formed over many years, and can trace it’s roots back to the Employers Liability Act (1968). The legislation states that anyone, and we repeat anyone, who works for a business must be covered under the EL section of the business insurance policy.

It is immaterial whether they are paid, volunteers, directors on dividends or even family and friends helping out. If they are injured, and you or the business have been negligent, you may face a claim.

But what happens when you have a school age child on a work placement? The old YTS scheme has been replaced by a myriad of different arrangements and most school children around the age of 15, will be offered some sort of one or two week placement with a local firm.

Within your policy wording, it will state exactly what an employee is. There will be a paragraph that contains all of the different types of employee. If you are taking on a placement, the local authority or maybe the school, will ask that you prove cover.

You have a couple of choices here, either speak to your broker to get them to send a proof of cover letter, or you can copy the relevant parts of your policy wording and/or schedule, which shows that these children are covered.

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Public liability insurance – cover in isolation

Monday, July 12th, 2010

Depending on what you do, you may only require public liability insurance on it’s own. Many business insurance liability policies offer the three main types, public, employers and products.

These types of policies are typically called combined liability insurance. If you are a sole trader, for example a plumber, electrician or carpenter, you may not need the additional two liability covers. You do not have any employees, hence there is no need for employers liability insurance and you do not supply products (separately) so there is no need for this cover.

What you need to look for is a tradesman’s insurance quote, this will give you the option of picking one of two liability covers. Every tradesman’s policy must have public liability and you can, if you need it, add on the employees cover.

This is what is known as cover in isolation, it is on it’s own as a single policy. But what about the products liability? Although you are not selling products, in a retail or wholesale sense, customers do end up with products that you have supplied.

The good thing is, that tradesman’s or contractors insurance policies do automatically include products liability, as long as the product is supplied as part of the contract. So, the plumber that puts in a bathroom suite, has products liability for any injury, illness, disease or damage caused by the products on their own.

Posted in business insurance, combined liability insurance, public liability insurance | No Comments »