September « 2010 « BusinessInsure Blog

Archive for September, 2010

Shop insurance – watch the instalment charge

Monday, September 6th, 2010

A couple of years ago, pre 2007, you could buy almost any product or service at low or 0% instalments. As the number of these deals reduce daily, you can still find business insurance at 0%, but you need to look a bit more carefully than before.

Most insurance companies (that offered business related policies), around 2006/2007 decided it would be a good selling point to offer either interest free instalments, or at the very least, instalments at a 1 or 2% charge.

Once one company had started to do this, as with most of these distribution and sales changes, it did not take long for many other companies to decide that they had to offer the same. So, we went from only a handful out of say 60 or 70 different companies offering 0%, to a couple of dozen offering this. This only took about six months. Which as any one in the industry knows, is lightning speed.

But, as we move through 2010 and approach 2011, most commercial insurance companies are starting to seriously consider each and every one of their costs. If they offer you interest free instalments, this costs them, depending on their size, anything between 3 and 6%. Instantly, their margins have been struck by what is a relatively high percentage.

You may find though that if you did have instalments free of interest or very low, single digit charges, that these are slowly starting to creep up. A half per cent here or there may not seem like much, but when this is coupled with a potential increase in your premium, it can add up to 10 or 15% more than you were paying last year.

This only appears to be happening on certain products though. Shop insurance is one of those that appears to be hit. When you are paying an average premium of only £600 per year, a £20 or £30 increase may not seem like a huge amount. But to the insurers, across the piece, this is nearly 5% on their margins. If you are paying your insurance on instalments, and you have a renewal letter arriving soon, make sure you check the monthly charge.

Posted in business insurance, commercial insurance, shop insurance | Comments Off

Getting a competitive office insurance quote

Sunday, September 5th, 2010

In the UK, all business insurance have their favoured categories of insurance. To use the time worn phrase, there are some that are cash cows and others that do not produce as much profit and others that are a drain on resources and cash.

One of the main categories that has, year on year, posted positive returns for most companies is office insurance. Offices tend to be run well, they are low risk, and in these modern technological times, have significant values of business contents, particularly IT.

So, you would think that as insurers make money on offices that they will always offer the best prices. Wrong! If you start in business today and look around for a quote, you will get a very competitive premium. But, over the years the insurers rely on the fact that there is always a distinct lack of inertia as far as looking around for alternatives at renewal time. Your premium will steadily creep up and up, as your claims ratio (ie the amount and cost of claims) gets better and better.

We are of course simplifying things here, not every insurer does things this way. The more forward thinking and pro-active ones are quote realistic on the prices. Usually though you need to have a switched on business insurance broker dealing with your renewal. What this means is that they are fully aware of the market price and if the insurers try to hike the figure to high, they will look for a cheaper, comparable, alternative for you.

We dislike the word cheap, competitive is a much more preferable option. Cheap tends to denote something that will ultimately not provide the financial protection you are looking for. If your insurer or broker have been steadily increasing your premium, and you have not had claims or losses, then you need to take a stand and look elsewhere.

Posted in business insurance, office insurance, office insurance quote | Comments Off

Employers liability insurance – what limit of indemnity MUST I have?

Saturday, September 4th, 2010

If you either run a business or operate as a sole trader and have employees, you are legally required to have in force valid, and suitable, employers liability insurance. This is common knowledge amongst most business people, but the question we get asked most is what is the legal limit of indemnity required?

With access to information over the net, it wil only take you a few minutes to find a few sites that tell you a bit more about this cover. However, the answers and information you may see can be slightly confusing.

The first fact is that you need the cover if any working for you, whether they are paid or not, whether they are only part-time or whether they are only temporary, they fall under the definition of employee. Business insurance policies will always have, usually near the start, a few pages devoted to definitions. As the policy is a lengthy, and legal, document the insurance company is obliged to define certain things. For example, it will define what a building is, what stock is and how gross profit is calculated, as far as the cover is concerned.

There will also be a definition of employee, and this will always be quite wide.

You must have cover for a minimum limit of indemnity of £5,000,000 in respect of each and every claim. ie potentially you could have 8 claims at £4,000,000 or 17 at £3,000,000 etc etc. Most UK insurers have a standard minimum limit of indemnity of double this, at £10,000,000.

The problem, that causes some confusion, is that your certificate of employers liability, will only state on it the legal minimum, ie £5m. It is in the policy wording and schedule where it states that you have the increased cover at £10m.

Posted in business insurance, employers liability insurance | Comments Off

Business insurance – commercial legal expenses

Friday, September 3rd, 2010

In a standard, or package, business insurance policy there will usually be an element of liability cover. The three main types are employers, public and products.

These liability covers provide for a “limit of indemnity” either any one claim or in any one period of insurance. You, as a business, could face a claim under one of these, say for damage caused by a product you have supplied or work you have done, or an injury to an employee.

The purpose of the cover is to pay for the consequences of the damage. Within this limit of indemnity, or in addition to it, will be included legal fees. Both yours and the claimants, if successful.

But what happens if you face a legal challenge for something that is not covered under one of the tri-liability covers? This is where you need to have commercial legal expenses insurance. This is a separate cover, provided by a specialist insurer.

You have two options, either take out a separate policy or get a policy that actually includes this cover.

As we are becoming more and more litigious in the UK, with no-win, no-fee solicitors on the prowl everywhere, it is easier than ever before for the “man in the street” to raise a legal claim against any business or public sector body.

Whether they will admit it or not, the vast majority of these claims are made for only a few thousand pounds, in the hope that insurers will simply pay them as it is cheaper than fighting the case. But, things are changing slowly and insurers are happier to challenge more and more. Every business is different and you need to consider exactly what cover you need, and can afford. Speak to your broker about the different options and, depending on your trade, you can add in a good quality cover for as little as £50 per year.

Posted in business insurance, commercial legal expenses insurance | Comments Off

Business insurance – how to save money on your renewal

Thursday, September 2nd, 2010

As with many financial services providers, business insurance companies rely on two things to ensure most renewing customers stay with them. The first one is that they can usually “get away” with putting on small premium increments, usually low single digit percentages, year on year. And secondly, that the customer will not feel that the increase, in the whole scheme of things, is that bad and is not high enough to warrant looking elsewhere.

This is all well and good if you have the money to spare, but think about your customers. If you increased your prices, every single year, by 3 or 4%, eventually they are going to consider going elsewhere. Particularly when they have sales people banging on their door day in and day out offering the same, or similar, products for less money.

If youhave been with the same insurer for a few years, you will have seen, in 90% of cases, an increase in premium. All insurers have a dual pricing philosophy, it is basic economics, to allow new customers a better price than a returning customer.

But now is the time for you to consider looking elsewhere. 2010 is proving to be a tough year, forget the big increases in GDP. Whilst these are good, most businesses are still trading well below their 2007 levels.

The one, and only way, for you to save money on your renewal, without losing out on cover, is to speak to a business insurance broker. Their sole role in the economics of UK plc, is to serve you, the insurance purchasing business. Whilst they may have agencies with insurers, they are legally in a relationship with you (should you choose to purchase a policy from them) and they must offer you the best type of product available for the most competitive price.

Whilst we cannot guarantee anything, we are fairly sure that if you have renewal documents sitting on your desk, you can get a better price within a few hours by speaking to an independent broker.

Posted in business insurance, business insurance broker | Comments Off

Commercial property insurance – flat roofs

Wednesday, September 1st, 2010

Chances are that if you have a commercial property insurance policy in force, there will be a condition or warranty relating to any non-standard constructed roofs. If your property or properties have a normal pitched roof covered with slates or tiles, then this does not apply. However, if part or all of your roof is flat, then you need to exercise care as to what exactly is, or is not, covered by your policy.

Most policies will provide the usual range of perils such as storm, flood, fire, theft, burst pipes etc. But, properties that have flat roofs are usually more susceptible to certain types of loss than a traditional roof.

Concrete roofs are not so bad. You do not see many of them nowadays (in new builds) but throughout the 70’s and 80’s this was a popular form of construction because it was quick and sturdy. What insurers are concerned about is flat roofs that can, over time, deteriorate in condition. We are particularly talking about felt or asphalt on top of timber. In the main, this type of construction was used on extensions as opposed to the whole roof on a new build. There are many properties though where the whole property is roofed with felt on timber.

If you are receiving rental income on the property, or you occupy the property yourself (for your trade) then you will have arranged a policy through a business insurance broker. 9 times out of 10, the policy will have been sold based on price. The cheaper the policy though, the more careful you need to look at the conditions and/or warranties.

For example, you may have a standard business insurance policy which has a nice, low, £100 excess. But, if you look carefully, any losses attributable to the flat roof may be subject to a significantly higher excess. £500 is the norm and this can rise to £750. This means that for every loss relating to the flat roof, you will pay a huge chunk of any claim, if not all of it. Also, the policy may state that you need to have the roof inspected every year, or bi-annually, by a competent contractor (ie not yourself) and any defects remedied.

This covers three points. Firstly, the increased excess may make the cheaper policy youhave bought not such a good deal. Secondly, the cost of getting a contractor even to look at a roof can be a few hundred pounds and thirdly, you will need to provide written evidence that you have had the roof inspected within the last twelve months. So you cannot get away from the additional costs.

All in all, it may seem like a good deal to get a cheaper premium, but as we always point out, the devil is in the detail.

Posted in business insurance, commercial building insurance, commercial property insurance, commercial property insurance quote, commercial property owners insurance | Comments Off