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Archive for August, 2010

Commercial building insurance – wear and tear

Tuesday, August 10th, 2010

Every commercial building insurance policy is designed to pay out on events that were not expected. It may seem simple, but this is really the crux of a policy. You are swapping some money, every year, in return for someone elese agreeing to shoulder the risk when damage is caused.

You cannot, in most cases, insure for things that you could reasonably expect to happen. I could not go to Lloyds of London and ask to buy a policy that pays out on me reaching my (next) 43rd birthday. Whilst there is unfortunately a very, very small chance that it will not happen, the overwhelming chance is that it will occur. So, no-one is going to want to lose money by paying out (more than the premium) on an event that is more than likely to happen.

The same can be said of commercial building and business insurance. You cannot buy a policy for an event that you know will occur. If you have a claim against your building policy for storm damage, then this must occur because of the storm.

If you have guttering or tiling on your roof that is in poor condition and obviously needs some repairs and maintenance, then you really cannot expect a policy to pay out for damage. If you had maintained the building better, then a storm would only cause damage if it was quite severe. However, if you have a gutter that has been hanging off for years and then a light gust of wind blows it onto your neighbours greenhouse, should your insurers pay out?

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Business liability insurance – what does this mean?

Monday, August 9th, 2010

We get a lot of requests from people asking for business liability insurance. Usually, they have been requested as part of a contract they are working on, to arrange cover. There will usually be some form of document that they have been given which will ask numerous questions about the insurance they have in place.

But the question is, what exactly does this mean? Whilst every business in the land could potentially have liabilities that they will face which could be insured, there is no legal requirement upon them to have any form of insurance protection, except if they have employees.

Anyone who has ever run a business will know that there is a legal requirement to have employers liability insurance in force. If an employee gets injured, suffers illness or is diseased, and this is whilst under the control of their employer, then there can be a valid claim.

A common form of business insurance, is to combine the employers with public and products liability, to give you the business liability insurance. If you do not have employees, then you are quite entitled to say that this part of your contract does not need completion.

You will, in most cases though, need to have the other types of cover because, in 2010 and for the foreseeable future, more an more companies are insisting on anyone that works for them or supplies them with products or services, is going to need cover.

The best thing to do, is to speak to an independent broker, they can review, assess and recommend what types of cover you actually need and the cheapest way to get this sorted out.

Posted in business insurance, business liability insurance, combined liability insurance | Comments Off

Help – what business insurance do I need?

Sunday, August 8th, 2010

If you start a business, all of your peers, friends and advisers will say that you need to have business insurance. Great you say to yourself, but how do I know what cover to get?

What you don’t want to do is to over-insure yourself and find that a significant chunk of your profit margin is being spent on financial protection. Of course, on the other hand you do not want to scrimp on your cover and find out that none of the claims you have are covered, or the excesses are so high that it really is not worth having the cover in the first place.

There is, you will be pleased to know, an answer to this conundrum, if you are stuck in the same position. Speak to a business insurance broker about what THEY think you need, as far as cover is concerned. We do this day in and day out and whilst we are not 100% perfect (99.99% is enough).

We know what you need and who to go to for the best prices and the best cover.

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Warehouse insurance – stock storage height

Saturday, August 7th, 2010

Any business that has a warehouse insurance policy will, in the main, have two types of policy cover. Firstly, liability insurance and secondly cover for stock.

There are many additional types of cover, but these are the two main ones. As far as the stock is concerned, you will find in most types of policy that there is a stock storage height warranty.

As with all warranties, they are to be treated very seriously. It is very easy to get a quote, go on cover, get your wording and then stick it in a drawer or cupboard and forget about it. You really should take whatever time you can to read through your insurance schedule and policy wording.

The best way to do this is to scan through the documents and anything noted as an exclusions, warranty, term or condition should be read in detail.

If you have stock under any business insurance policy, you will have a stillage warranty in most cases. This simply says that you must keep the stock on pallets or shelves at least 10 or 15cm from the ground. This is to prevent stock damage from a low level flood or burst pipe.

A storage warranty only rely applies to warehouses where there is a lot of stock stored. It is designed to limit the height that your stock is stored at, for two reasons.

Firstly, there is an increased liability risk, if stock is stored too high it is more likely to fall and injure an employee.

Secondly, it represents an increased fire risk as the more stock stored “chimney” style, ie straight up, the more the chance is of a total loss in the event of a fire.

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Business insurance – intruder alarm warranties

Friday, August 6th, 2010

If you have a business insurance policy, there will be certain terms, conditions and warranties within the policy wording. These either state certain things which you must do, in order for cover to be in force. Or, they state certain things which must be in place for cover to apply.

For example, if you are a wholesaler or importer and you have huge values of stock, these are likely to fluctuate considerably throughout the policy year (every 12 months).

Your insurers will look at the maximum amount that will be at risk at any one time, and will consider this to be the maximum possible loss. They then consider a worst case scenario and decide what the maximum probable loss is going to be. In all likelihood, you are not going to have every single piece of stock stolen in one go. But, if there was a fire it may all be lost.

As far as theft is concerned, depending on the level of stock, there may be an intruder alarm warranty. When you are looking for your warehouse insurance quote, you will declare certain information, such as the level of security. Part of this is the type of intruder alarm.

But, the insurers could accept cover because they are happy with the type of alarm. Technically though, the day after they agree cover, you could remove the alarm, or not use it. So, insurers specify in the wording that a) you must have an intruder alarm system as agreed with the company and b) that this must be set in full operation when the premises are closed for business or unoccupied and lastly c) that you must have this (intruder alarm) installed and maintained by an approved contractor on an annual basis.

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Wholesalers insurance – goods in transit

Thursday, August 5th, 2010

Most UK wholesalers insurance policies will include cover for your own stock in transit. The reason for this cover is that, whilst you may use couriers, there is always the chance that you will need to deliver stock yourself. This could be as a “one off” or you may only use couriers whilst delivering outside of a certain radius.

You do need to think carefully, and review the policy wording, to see exactly what cover is provided. Usually, insurers will provide this as an “add on” cover. This is something that is usually included free of charge within the overall package policy. Because it is free, the limits of cover provided may not be that high. A usual limit would be around £2-£3,000 any one load.

If this limit is insufficient, you need to speak with your business insurance broker and get them to provide you with costs to increase this. Think about the busiest times of your year and then consider how much you could possibly have in any one of your business vehicles. It does not have to be in a van or car owned by the business, any vehicle being used by an employee of the business is usually covered.

Things to watch out for are whether there is a limit of the total loss. What this means is that if you have a few vehicles out on the road at any one time, the potential loss is a simple sum of the number of vehicles multiplied by the amount of stock in the vehicles. Whilst the likelihood of having two or more vehicles broken into on the same day, the risk is there. You need to make sure that the aggregate loss limit is higher than the single vehicle limit.

Posted in business insurance, business insurance broker, warehouse insurance, wholesalers insurance, wholesalers insurance quote | Comments Off

Commercial building insurance – partial unoccupancy

Wednesday, August 4th, 2010

How does your commercial building insurance change, when you have only part of the premises unoccupied? As we begin to exit the terrible recession that 2009 represented, many commercial landlords are starting to, at last, see occupancy rates on the increase.

Many properties are either are retail or commercial on the ground floor with some residential above. Most of the properties with flats have seen occupancy fairly steady. Of course, landlords have had to reduce, or keep their rents unchanged.

But, many are now still trying to get their commercial portions let and it may be that you have a few commercial units, some of which are empty and some are occupied. You will, if you have business insurance, have this arranged on a property owners policy. This will cover the bricks and mortar, fixed glass, loss of rental income and property owners liability.

It depends on who are your underwriters for the cover, but in the main most policies will restrict the cover for the unoccupied portions of the property whilst empty. It is not only the restrictions you need to look out for, but also the terms and conditions that apply.

For example, after 30, 45 or 60 days, most policies will restrict the cover to fire, lightning, explosion, aircraft and property owners liability. This is normal for most insurers. But, certain ones will have un-occupancy conditions, which may or may not include any of the following:-

1) The need to turn off all services and drain down water systems (even if you do not have cover for burst pipes).

2) Letter boxes to be sealed up.

3) Weekly visits to be made, with a log recorded of each and every visit.

4) Ground floor windows to be boarded up.

Most of these conditions, apart from the letter box one, are fairly strict and wil cost you time and money. Other insurers are more flexible, depending on how long they are likely to empty for.

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Restaurant and takeaway insurance – leased premises shop front cover

Tuesday, August 3rd, 2010

If you have a restaurant insurance policy, you will either have buildings insured or not. If you own the property, or have a full insuring and repairing lease, then you will need to have adequate cover for the structure. If you lease or rent the premises, then you will pay the landlord or the property owner, an amount to cover the insurance costs.

You will find though, particularly in England and Wales, that under the terms of you lease (if you are renting the building) that you are responsible for the cost of damage caused to the shop front glass.

This happens in around 90% of commercial, retail, leases. If someone chucks a brick through the window, it is up to you to get it repaired. If someone drives a car into one of the walls, then this fall under the landlords commercial building insurance cover.

You do need to be very aware of two things. Firstly, that if a window is broken “out of hours” the local police have every right to appoint a glazier of their choosing to come and do emergency repairs. When you add up the call out charge, the boarding up and clearance costs, this can be many hundreds of pounds for a very small window. Secondly, and more importantly, some of the cheaper takeaway or restaurant policies you can get in the market today, either do not have glass cover or the sum insured is so woefully low, it is not worth having.

Make sure that you business insurance policy (whatever your trade) has suitable cover and that the sum insured is high enough and the excess is not too extortionate. For example, for every standard window that is about the height of an average person and as wide as they can stretch their arms, you are looking at £500 as a sensible sum insured.

Stand in the street and look at your windows and doors and when you use this rule of thumb, even for standard glass, you are looking at a minimum figure of £2,000 and upwards. Check your policy, you may be shocked to find out that you only have a sum insured of £500 and the excess is £250, so it really is not worth having the cover at all in the event of all your windows going.

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Contractors All Risks Insurance

Monday, August 2nd, 2010

There are many pointers to the health of the UK economy, one of those we use is the level of new business insurance enquiries we receive. We saw reports last week about the economy growing at higher rates than expected, one of the areas that buoyed these figures was construction.

For the past few months, this is where we have seen a large increase in new business quote requests. You could count on the fingers of one hand the number of enquiries we received on a monthly basis in late 2008 and all of 2009. Now though, small contractors are back looking for cover, but if you are one of those, what type of policy do you actually look for?

At the the basic level, you can get a policy that includes employers and public liability insurance. Employers because you may legally need it and public because the company you are contracting for are insisting on it.

But what about the other covers? You may have your own tools and plant, you can hire in equipment and also what about the actual contract you are doing? For this, you need a wider cover, typically called a contractors all risks insurance package.

For the actual contract you are doing, to explain things, consider the following. If you are appointed to build a £50,000 two storey extension to someones house, until such time as you have formal handover, either to the client or the architect, you are responsible for the additional building to the house. If there is a fire, for whatever reason, the owners house insurance is not going to cover the extension. They will look for you to re-build it back to how it was prior to the fire.

This is the contract works element of the cover. You can get limits “per contract site”, from £50,000 up to millions of pounds. But you do need this cover.

Speak to a specialist broker to at least get two quotes, one for the basic liability and one for the wider cover. You can then decide whether it is worth investing in the wider cover, which we always recommend.

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Salon insurance – injury to staff

Sunday, August 1st, 2010

It is common knowledge, in the industry, that you need to have suitable salon insurance, including liability cover. You can have as many disclaimers as you want on the walls and members of the public can sign documents devolving liability. But, if you are negligent, you will face a claim.

Negligence is quite strict, in that the onus on you is to disprove it, rather than someone making a claim having to prove it.

So what happens when you are face with a claim for injury from an employee? All standard business insurance policies will include certain sections of cover, usually liability cover is available.

One of these types, is employers liability insurance. Whilst we have said that negligence is up to you to disprove, EL cover is even stricter. The government does not want to have to face a welfare bill for people injured at work. For this reason, they enforce cover for employees, and boy is it strict.

You have to be extremely lucky to be faced with a claim that you can repudiate, when it has been proven that you are negligent. If you don’t have a policy, or don’t have this within your existing cover and you do have employees, then you really are taking a huge risk.

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