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Archive for October, 2010

Unoccupied buildings insurance – cover restrictions

Saturday, October 30th, 2010

Unoccupied buildings insurance policies are not every insurers favourite cup of tea. Empty properties are magnets for thieves, vandals and arsonists. They are also more susceptible to storm or flood claims as they are not, traditionally, looked after as well as permanently occupied properties.

As a result of this, you tend to get two types of policies from those insurers that are actually prepared to provide the cover.

The first type, offer absolutely basic cover, which is commonly referred to as FLEA. This is an acronym for Fire, Lightning, Earthquake and Aircraft. You will usually get property owners liability as well.

Whilst these policies provide fire cover, which is usually the most important. There is no cover for theft, malicious damage or storm. The second type of policy may provide limited additionla perils, usually with an increased excess of £500 or £1,000. You will usually pay more, as understandably you are getting more cover. But, you need to check the terms and conditions.

For storm and/or burst pipes cover, the policy may request (as in, if you do not do it you are not covered) one of two things. Either that the water system is drained down completely or that the heating is left on at a minimum temperature (to prevent pipes freezing).

As with all policies and covers, you need to read through the policy wording in conjunction with your schedule of insurance. If you receive a written quotation, either from a broker, agent or direct insurer, it should detail what the specific restrictions are.

Bear in mind, that if you have an occupied building, which becomes empty, there will be terms and conditions that automatically “kick in” and restrict your cover. If you have a tenant that is due to move out and do not have a new one lined up, speak to your broker to find out exactly how this affects your cover andwhat steps, if any, you need to take.

In 90% of cases, for commercial properties, you will probably have bought your policy through a business insurance broker. Phone them up and get them to confirm in writing, or via email, what the restricitions are.

Posted in business insurance, unoccupied buildings insurance | No Comments »

Getting a better business insurance quote

Friday, October 29th, 2010

If you have received a business insurance renewal quote, from your existing broker or insurer, you may find that there has been an increase in you premium, for 2010. It is not happening across the board, but most insurers are slowly starting to realise that they have spent a few years under-pricing many products. As a result the claims costs have been increasing at a higher percentage than the premiums.

If you have had an increase in excess of 5%, and you have been claims free for at least three years, now may be the time to look around for an alternative.

But, when you are looking around for a “better” quote, what exactly does this mean? Better in cover, service or price? Or, hopefully all three?

As a company that is involved in commercial insurance and nothing else, we can confidently say that price is the main factor upon which products are sold. Our (as an industry) job, is to help the purchasing customers find not only a product with a fair price, but one that offers similar, or better, cover.

We all know that you only get what you pay for. If something appears to be a bargain, there is usually reason for this. When it is a physical product, you can usually tell, when it falls apart or breaks. As far as a policy is concerned, you can only tell when you have a claim, and then it is far too late.

Cheaper premiums are out there, but you need to be cautious about the cover provided. The best way to sort the good from the bad, is to let someone else do it for you. If a broker recommends a cheaper product, and does not clarify if there are more onerous terms and/or conditions, then you can complain at a later date.

Posted in business insurance, commercial insurance | Comments Off

Cheap takeaway insurance quote

Wednesday, October 27th, 2010

We received a phone call last night, someone looking for a cheap takeaway insurance quote. But, as ever, there was a bit of a twist. The phone call was received at quarter to five, they were opening at five and needed us to confirm cover, by email, by 5pm.

So, they were not just looking for the proverbial cheap quote. What they wanted had to be cheap and quick, and they asked for wide cover. But, the point about this blog is not (just) to promote out services.

The issued the customer had was that a “local” high street business insurance broker had offered to get this sorted out. However, when push came to shove, the service was not up to scratch.

What this means is that the takeaway tried to use a local company, thinking that this would get them the better service. But it failed miserably. We are based in Perth, Scotland and the customer was in Birmingham. Local does not make any difference whatsoever. You just need to find the right company that offers the right products and service. Don’t make the assumption that because a broker is round the corner that they can offer you what you want. Sometimes a broker on the internet, that is miles away from your business, is the one that can offer what you need.

Make sure though that the broker has their own individual Financial Services Authority authorisation and regulation. If they do, thye can give you a six digit number which you can check on the FSA website.

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

Compare business insurance the easy way.

Tuesday, October 26th, 2010

We are seeing, across the board, premiums increasing for all classes of business insurance. Whilst some of our customers say that this is unfair of the insurers to increase costs, we have to point out that this is on the back of approximately 8 years of either static, or reducing premiums. We have many customers paying less now, for essentially the same risk, than they were 5 years ago. Of course, no claims discounts help, but in recent years insurers have not been increasing prices, apart from index-linking.

As there have been a number of years of inadequate pricing (from the insurers point of view), they are now starting to amend the pricing to make up for the past few years losses. They have three choices, in reality, pull out of a class of business, increase their prices or remain the same. Most are erring on the side of caution and increasing their prices.

This leaves most customers in a bit of a quandary, what do they do when they are faced with an increased premium? Many will instantly hit the internet to find an alternative. No longer do you have to visit, or be visited, by a broker, you can use the net.

This is where the difficulty occurs, there are so many sites now that compare business insurance. But, the question is, do they really compare the cover, or do they compare the prices? It tends to be the prices in the main and the cover is secondary.

What you really want is a human being that will methodically and correctly, compare the products and recommend the best product at the best price. The easy way to do this, is to speak to a broker that is independent. If they are, they can pick and choose who they quote (subject to them having agencies with the underwriters), if they are not independent, their level of choice is limited to one.

Speaking to a broker, instead of using a comparison site, is the ext way because you can chat through what you do, and do not, want. The broker can suggest areas where there are gaps and help you ascertain exactly what you need, should and are legally obliged to insure.

Posted in business insurance, compare business insurance | Comments Off

Fish and chip shop insurance – why are premiums increasing?

Monday, October 25th, 2010

If you are unlucky enough to have bought a new car insurance policy in the past few years, having never had this cover before, you will have been shocked at the premium level.

Over the past five, even 10 years, many insurers have been underpricing their business. This is, in the hope that they can gain as many customers as possible, so that they can then get to the critical mass point. This point is where the premiums received can pay for the claims received, leaving some room for profits. But, and it really is a big but, with the recession, claims inflation and increased competition, insurers have not done their sums quite right.

So, for this reason certain products, which have produced more claims are being hit with price increases. As you will have guessed, fish and chip shop insurance is one of those areas where, certain, companies are starting to realise that the premiums are not covering the claims.

Where this happens, they are faced with two, very simple options. Either increase the prices or pull out of the market all together. We are seeing some companies pulling out, which then makes it easier for the remainder to increase their prices as there is less competition.

Fish and chip shops are not “bad” for business insurance companies, it is just that they tend to suffer some higher than average claims costs. There are not many fish and chip shop fires that do not cost very much. But, there is help at hand. Some underwriters have chosen to always price in the middle of the ball park. They are not too cheap and not too expensive, so they get enough business in, at the right price, to continue trading.

These companies are still out there, it is just a case of finding them. You may deal through a broker and if they do not have an agency with one of these firms, then you may not get a good quote. Now is the time to look around, savings can be made, it is simply knowing where to look.

Posted in business insurance, fish and chip shop insurance | Comments Off

Restaurant insurance – declare your entertainment

Sunday, October 24th, 2010

In the UK, business insurance companies have, over the years, developed many different ways of categorising different types of businesses. As far as leisure insurance is concerned, they will usually split this at a high level between pubs, restaurants, take-aways and night clubs.

Where licensed premises such as pubs and night clubs provide different types of entertainment, this can cause insurers to either increase their premium or terms, or potentially withdraw cover. As you can understand, a pub that does not provide entertainment will have less chance of injuries to patrons (and potential public liability insurance claims) than a pub that has discos, a DJ, a dance floor and is open until 3am in the morning.

With all types of business having to adapt and expand the range of products and services they sell (due to the tough financial conditions we now live in), it is more and more likely that restaurants will be doing more than simply offering food on the premises and a takeaway service.

A lot of restaurants may consider offering evening entertainment, party nights, or even having a late night bar. Whilst all of these activities are undoubtedly related to the business (of being a restaurant) they can, and usually do, mean an increased liability and property damage claim potential for the premises.

Some policies just have a very simple, high level, business description, such as pub, or bar. You really should ensure that your business description on your policy specifies all of the activities you undertake. Whilst we are not saying that an insurer would automatically turn down a claim, this could all mean a delay in sorting out settlement.

Some insurers could potentially turn around and say that they thought they were insuring a restaurant, not a part night-club and repudiate any claims made. Just to be safe, give your broker a call and tell them what you do, at least you are then safe in the knowledge that the restaurant insurance policy you have purchased, to cover claims, will protect you when required.

Posted in business insurance, restaurant insurance | Comments Off

Business insurance – what does average mean?

Saturday, October 23rd, 2010

If you have a business insurance policy, or you have just received a quote, you may be told by the broker that “average” applies to the cover.

You may well wonder what average means and how this affects the insurance. Your policy may contain a clause that is called something along the lines of Reinstatement Basis or Reinstatement Condition. It is one of the standard general definitions of a policy and applies to the vast majority of commercial insurance products. It is more commonly called average and it is extremely important.

An insurer wants to receive the correct premium for the risk they are facing. A 17 year old, male, living in an inner city with a sporty car is going to pay more than a middle aged family man in the country. So, if the 17 year old lies and says he is 47, he will not only get a cheaper premium but he will also have any claims he makes turned down as h has misrepresented the risk to insurers. They do not, and cannot, check on the validity of the information provided at quote stage. This is why you complete a proposal form or accept a statement of fact and this forms the basis of the policy. ie, if you lie the the policy is invalid.

Now think to a commercial policy. If you have a stock holding of £50,000 and you only declare £25,000 to the insurers, you will be underpaying that element of the cover by, say 30-50%. If there is then a loss the insurers will apply the average clause. You under-insured by 50%, so any claims settlement, whatever the amount, is reduced accordingly. So, if a flood destroyed £10,000 of your stock, the insurers would only pay 50%.

The same applies to buildings, with commercial building insurance, you need to declare a re-building or reinstatement cost for the property. If you mis-represent this amount to insurers then any claim will also be reduced.

For example, if your 1,000 square foot warehouse is £200 per square foot to rebuild, you should insure for £200,000 plus 20% for additional fees, costs and a contingency, ie £240,000. If you insured for less than the correct figure, you could face a reduced payment.

The secret is, to get a proper commercial valuation of the rebuilding cost, every 3-5 years. It may cost £2-300, but it reallyis worth it because you are safe in the knowledge that if the figure is wrong you have not only done all you can, you have also got the potential of suing the valuer.

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

Shop insurance – what is your stock covered for?

Friday, October 22nd, 2010

As part of a shop insurance policy, there will be two main types of cover. Stock and public liability. Although we are just coming out of the depths of a recession, we are still feeling the after effects.

Many businesses, including retailers, have survived the last couple of years with reduced stock levels.The Japanese “just in time” stock holding philosophy has been put to much use. Even the local garage does not keep any stock apart from oil. Every single item they use is ordered and usually delivered within one hour from a local company. Whether this is a light bulb or a new battery.

Whilst we are not saying that we are out of the woods (recession wise), we can at least see the edge of the forest. We are also moving into the Christmas period. The kids are telling me it is not long to go and the shops are starting to advertise their Christmas wares.

This means, that most retailers are now at the point in the year when they should just take a quick glance over their business insurance policy and make sure that they have the correct sums insured for stock. Many policy contain an automatic percentage increase, say25% or 30%.

You should check however that the base sum insured is adequate to replace your stock, given that we have seen price increases across the board for most physical products. Refer to your computer stock control system and take an average for the past 10 month, add a percentage to take account of the additional replacement costs.Then, if necessary, speak to your broker and make sure that your policy is correct.

Even if you increase the amount just for a few months, between now and January this will be better than not having the correct sum insured. We are seeing an increase in theft and break ins, not quite to the levels we expected, but still, no premises is immune to an attempted theft. Make sure your policy has the correct limits.

Posted in business insurance, shop insurance | Comments Off

Comprehensive spending review, a business insurance brokers view.

Thursday, October 21st, 2010

So, the 20/10/2010, nice easy date to remember, will go down in history as the day George Osborne either made the best speech for the future of the UK, or the worst.

As everyone has been blogging, commenting and giving their opinions, we thought a humble business insurance broker could give their take on the situation.

The one thing that everyone will agree on is that we knew it was coming. Even the previous Labour cabinet ministers will have to admit that, if they had got in power then they would have had to do something very similar, although of course they would have not wielded the axe so high and so fast. More a gentle tap, every three or four months that would not even produce a scar.

We started our business in 2001, using private savings. We were contacted by the local authority at the start and they said we should speak to the Small Business Gateway, here in Scotland, as we could receive funding. I booked a meeting and turned up only to be told that as we were selling financial services we were not suitable for any funding.

The reason I have made this point is that we have received no financial support whatsoever. We did not even look for support, it was only when it was suggested to us, that we looked into it, and what a waste of time that was. So, we started the business and soon started paying not only PAYE and NI, but corporation tax and rates. We didn’t cost the taxpayer a penny, never have done and never will.

Whatever the individual figures are from the CSR, it needed to be done. Bob Crow was chivvying up the troops last night by blaming it all on the banks. Whilst the banks have cost the country money, the CSR is about reducing the bloated civil service and reducing other costs such as benefits. It is not about reducing child benefit to pay for bankers bonuses. Anyone with a single brain cell can work that out.

The private sector will take up the slack, of course they will. But the difficulty will be, do we take on civil servants who have been used to their own way of life, 9 – 5, three weeks sick every year and a final salary pension – or do we just employ like we always have done straight from the private sector? I thinks we will stick to the way we have always done it.

The other thing about the CSR is that it will lead to public sector job losses. But don’t forget this is over a four year period, when natural wastage will have a majority impact. If you listen to some of Ed Milibands comrades last night, it would appear that 500,000 civil servants were going to get a P45 in the post today.

If you earn £100 a week and spend more than this, then you will get in to trouble. If a country, UK plc, is spending more than it receives in (tax) revenues, then it cannot borrow indefinitely. We have the worst budget deficit of the G20 countries.

George Osborne, like him or loathe him, we think will go down in history as setting UK plc in a position to become one of the fastest, consistently, growing G20 economies.

We have not had pay rises in the past four years, we don’t get bonuses and contribute to our pensions. I am afraid, for some of the public sector, yesterdays announcement was really just, welcome to the real world. The UK needs to get tougher, leaner and more profitable. The private sector will fuel this, but we are not happy to continue if our taxes just go to subsidise an over large public sector.

Well done George we say, but stick to the letter of your announcement. If you don’t follow through the tough choices, you will regret it.

Posted in Uncategorized | No Comments »

Small business insurance – who should I choose?

Thursday, October 21st, 2010

If you are looking for small business insurance, particularly over the net, you will be faced with a huge array of choice. The worlds favourite search engine throws up a huge 99,500,000 results! How do you know which company to choose to get you a quote?

In the past five years, more and more people have gone online and broadband is now commonplace in most UK homes and businesses. In addition to this, most mobile phones nowadays allow you the option of fast access to the internet, wherever you are.

We have learned that, when searching on the net, you do not simply pick the first company that appears. Our searching habits have become smarter and we know how to sort the wheat from the chaff, in most cases. But, as far as commercial insurance is concerned, it may appear that many of the companies advertising are exactly the same.

So, you have started a small business and you don’t want to pay over the odds for your insurance cover and, you want to make sure that you get the right cover that you and the business needs. Any new business start up will be faced with ongoing costs and excluding salaries and premises, your insurance can be one of the bigger costs you will face, depending on exactly what the business does.

You want to be able to make sure therefore, that you are paying the most competitive cost possible. Given the huge amount of choice you are faced with, as noted above, you want to select an independent business insurance broker. In the UK, a broker will search for you, to find the best deal. Going direct to an insurer will not get you the choice you need, they will simply offer you the best choice from their range of one product! A broker will actually choose from a range of products and providers. If your requirements are more specialised, then they may only be limited to one or two providers, if this is the case the broker will tell you that the choice is limited.

Posted in commercial insurance, small business insurance | Comments Off