Most wholesalers insurance policies will cover stock belonging to the business. This stock may, or may not, be held at the insureds business premises or held at a third party location or a fulfilment house.
Many businesses have similar levels of stock throughout the year, whereas others will have their stock levels determined by the seasons. The Christmas cracker supplier will not have very high stock levels from January to June, whereas around October and November you won’t be able to move because their warehouse will be stuffed to the rafters.
We always advise people who have wildly fluctuating stock , that their business insurance policy should reflect this increased and decreased stock risk throughout the year. There is no point in paying for insurance in respect of stock that you do not have.
There are two options available. You can either take an annual stock declaration policy. In these cases, you declare at the end of the policy year what your stock levels were at the end of each of the previous 12 months. The insurers will average this out and compare to your sum insured (on the policy) and allow either a refund or charge and additional premium.
These policies are usually only provided for “bigger” firms, with stock levels in excess of £500,000. For smaller companies, you have the option of declaring your stock at given times throughout the year and your policy is endorsed, or amended, to note the changes. This can be a better option because you are aware early on (ie during the policy year) whether you are going to pay more or less. You do not want to get to the end of a good year and then get hit with £1,000’s of additional premium. It is much better to pay your premium on monthly instalments and then either pay increased or reduced premiums.
Speak to a broker about the options available but be cautious about the broker that charges an “administration” fee for each change, this is wrong and if they try to do this, move elsewhere.