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Archive for October, 2010

Combined liability insurance – what is it?

Wednesday, October 20th, 2010

Many businesses, as part of a contract with other companies or a government body, will be asked to prove the existence of combined liability insurance, but what is this and do you need it?

Under UK law (civil, not criminal) you can be liable for any damage you cause to other people, or other peoples property. When we talk about “other people” this includes businesses, corporations, charities etc, it does not have to be a private individual that says you are liable.

When we talk about “damage” this covers, injury, illness and disease. So not only is physical damage to property, ie the window cleaners ladder smashed through the bathroom window, covered, so is illness ie the butcher that supplied infected meat.

As long as there is physical damage then there could be a claim. Physical will also include mental illness. A standard business insurance policy can include any one of three separate types of liability cover. A combined policy, is a separate, stand alone policy, that covers the three liabilities in one.

These three are employers (legally required), public and products (which are not normally legally required). You may be asked to prove the existence of cover, because if you cause damage as a result of your contract, the “employing company” wants to be sure that they can claim against you.

Imagine a hospital, that needs some plumbing work done. They could get a local contractor in who could cause a fire and thousands and thousands of pounds of damage. The hospital is not at fault, but if the contractor does not have adequate insurance, it is the tax payer that ends up funding this. So, the local authority may have an approved contractors list, on this will be companies that can prove they have public liability at a limit of indemnity of, say, £5,000,000.

As with all types of cover, you get the best advice from an independent business insurance broker. If you don’t have the cover and need it, or you are looking for an alternative quote, a broker is the person to speak to.

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Commercial insurance – comparison sites

Tuesday, October 19th, 2010

If you have had to watch daytime TV at some point in the past six months, you will have seen numerous adverts for sites that offer to compare insurance for your car and home. Whilst they are not advertising on TV yet, there are sites on the net that offer to compare business insurance.

I have worked in the industry for nearly 25 years. When I started, there was a mystique about insurance and to be a good underwriter, would take years and years. Anyone with any sense knows that if you can train to be a doctor or dentist in 6 years, any more than that to become an underwriter, is nonsense. What they were really saying to me, when I started, was that experience counts. The more time you spend in the industry, the more you learned.

So, should you go to a website to choose your commercial insurance, or should you speak to a human being or trust that the website will give you not only the best deal, but the best cover?

We always think you speak to human, an independent business insurance broker will offer you so much more than a wesbite on its own. The issue we have with these comparison sites is, that they do not sell on price and cover. They sell on Price, with a capital P and cover, with a small c. We have just had a florist cancel her renewal. for six years she has been paying £262.50. She now has a package through a website, for £60 less. I asked her to send through the package, and not only is the excess double, she does not have shop front glass cover.

I have explained that one cracked window or claim, and the £60 saving has disappeared. But, the deal has been done and it is a shame. It was sold on price and nothing else.

Posted in commercial insurance, compare business insurance | Comments Off

Professional indemnity insurance – a legal requirement?

Monday, October 18th, 2010

Professional indemnity insurance is a form of liability cover. If you provide a service and/or advice in return for a separate fee or as part of an overall contract, you could face a claim for professional negligence.

There is no legal requirement, under UK law, to have this cover in place. What you may find though, and this is happening more and more, is that you are required to have this as part of a contract you may carry out. It depends whether you are working for the private or public sector whether cover is requested and also, at what limit.

Unlike employers liability insurance, which is not only legally required but must be at a minimum limit of indemnity of £5,000,000, you can get professional indemnity at varying limits of indemnity, usually starting at £100,000.

If you do not have the cover in place at the moment, you will usually have two options. You can either add this to your existing combined (employers, public and products) liability insurance or you can take out a separate policy. Adding this to your existing policy is rare. The reason being that there are so few insurers that offer the standard combined liability insurance as well as professional indemnity. There are some that will do this, but they do not tend to be competitive across the board.

You will be better speaking to a broker and at least getting a quote both to add to your existing policy (if possible) and as a separate stand alone cover. At least this way you can compare the options that are available.

Also, speak to the broker and get their advice as to the limit of indemnity that you not only would possibly need but also that which would comply with your contract.

Posted in business insurance, employers liability insurance, professional indemnity insurance | Comments Off

Don't let insurance company inefficiencies cost you dear

Sunday, October 17th, 2010

Every business, whether they care to admit or not, wastes money. Usually this is on a very small scale for example leaving lights on unnecessarily, over ordering stationery, not getting the best car lease deal etc etc.

This is something that is part of business life and as your business grows and progresses you learn from your past mistakes and don’t make the same errors.

Part of the problem for some companies is that, the bigger they get, the more costly the money wasting can be. Insurance companies are notorious for their inefficiencies. Sometimes, when we are speaking to our panel of commercial insurance companies we get to the tearing your hair out stage when you have spoken to the 5th person in one phone call about the simplest of things.

You can speak to any business insurance broker in the land and ask them to name the top ten most inefficient insurers and the list would be broadly the same. Although I have no evidence for this (as I haven’t spoken to every broker in the UK) I would bet that the list would contain the biggest insurers. They tend to have too few staff where they are needed and too many where they are plainly not required. The have too many expensive offices and the amount of re inputting of data they undertake is mind boggling.

To compete with the bigger insurers, there are, thankfully, some smaller, more efficient ones. They have the best staff at the coal face, they have modern computer systems and tend to have offices out of the expensive financial districts. Many of the staff have also worked for the bigger insurers in the past and been frustrated by the lack of progress and change. So, they leave to work for a more efficient, forward thinking organisation.

As these companies are more efficient, they are able to offer better prices because their overheads are much less. These are the companies that you want to get your shop insurance or office insurance quote from. The best way to find them is to speak to an independent business insurance broker who is free to speak to whichever insurer they want.

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Don’t let insurance company inefficiencies cost you dear

Sunday, October 17th, 2010

This is something that is part of business life and as your business grows and progresses you learn from your past mistakes and don’t make the same errors.

Posted in business insurance, commercial insurance | Comments Off

Fish and Chip Shop Insurance – excess levels

Friday, October 15th, 2010

In 2010, most types of business insurance are starting to see renewal premiums on the increase. Over the last couple of years we have seen motor rates (prices) increasing almost across the board.

We are now staring to see this upwards pressure on pricing (from insurers) across most types of products. But, because insurer A is increasing its prices, this does not mean that you cannot look around and find a better price from insurer B, C or D.

It has never been easier for you to get an alternative price. A combination of Internet and telesales means that you can access a broker almost anywhere in the country who will be able to get you a better price.

You need to be wary though of prices that seem incredibly cheap compared to your existing offer. Sometimes, depending on the product, this may be because you have been paying over the odds for the past few years, or your insurer/broker has been complacent and has not looked around enough at renewal for alternatives.

Fish and chip shop insurance is one of those product where we are starting to see insurers either pulling out of the market altogether, or they are looking for increases that are at the double digit percentage levels. If you do get a cheaper quote, please look at the excess levels. We have one insurer that is offering an excess of £100 for fixed glass, others have a standard excess of £500. You can see where we are coming from. You might save two or three hundred pounds at renewal, but have one smashed shop window and all the savings go out the window.

Just be sensible and ensure that you take time to read through any terms and conditions of your alternative quotes.

Posted in business insurance, fish and chip shop insurance | No Comments »

Hairdressers insurance – laminate flooring contents or tenants improvements?

Wednesday, October 13th, 2010

If you have a hairdressers insurance policy, this blog question may make about as much sense as a martian story book. But, you should consider the question, as it applies to your policy wording.

If you have a policy, or are looking for a quote, you will need to know the replacement costs of all contents in the building you trade from, that either belong to you, or you are responsible for.

It is very easy to work out how much your stock costs, if you have a stock control system. You can probably work out fairly easily how much your movable contents, such as chairs, sofas, computers etc will cost to replace. You are also probably responsible for what insurers call tenants improvements. If you do not own the building, you will not need to insure the structure (unless you have a full insuring and repairing lease, which we have talked about before).

So, you don’t need to insure the “bricks and mortar” but, if you have made any improvements to the building, that you would not necessarily take with you if you moved, then you will need to insure them. If there was a fire or a flood, these improvements will/could be damaged and you will be financially out of pocket.

One of the biggest costs, is your flooring. Most business insurance policies will have the option of including a separate item for tenants improvements, because they are cheaper to insure, because the likelihood of theft is much reduced.

If you have a laminate floor, nowadays you can have two types. Either one that is fitted, permanently, or you can have one that you could effectively take with you if you moved, almost like carpet tiles. Depending on the type of floor you have, your contents (if it is movable) or tenants improvements (if it is fixed) sum insured needs to be increased to account for this. A decent, hard wearing, shop suitable laminate floor can cost up to £10,000 for a reasonable sized shop. Make sure that you have adequate cover, speak to your broker for advice, that is what they are there for.

Posted in business insurance, hairdressers insurance, salon insurance | Comments Off

Cheap business insurance – does it exist?

Monday, October 11th, 2010

Does cheap business insurance exist? The answer to this is, yes it does. Whatever you are paying now for your insurance, in 99% of cases you will always be able to get something cheaper. Think about any product or service, that you need or buy for you business and if you look long and hard enough you will get a better price.

Of course, you know what is coming next. This can be a double edged sword. If you get somehting too cheap, then you will probably end up paying for it in the long run. Think about clothing, get yourself a cheap coat or pair of shoes and you will realise soon enough why the product was so cheap, probably because it was not fit for purpose.

Get an insurance policy that is considerably cheaper than everything else in the market, have a claim and then you may realise that you have a higher excess or worse still, no cover.

What does exist, in abundance, is what we like to call competitive business insurance. There are a range of prices from different insurers for the same risk. What you want is one of those that is at the bottom end of the price scale. Just because the price is low, does not mean it is bad cover. If you get the quote from a broker, what you really need to do is to ask them to tell you about any increased excesses, cover restrictions or onerous terms, conditions or warranties.

The brokers job is to offer you the best product at the best price, if there are any gaps, they need to notify you of this. We had an enquiry recently for a takeaway insurance quote. The market was quoting in excess of £1,000, but one insurer came back and quoted around £700. The difference being that they were not prepared to offer shop front glass cover. We advised the client and provided them with two quotes. As they had external roller shutters and they were not on a busy high street, they decided to go with the cheaper quote, excluding glass. As part of the process though, we made sure that they were fully aware of the cover restriction on the cheaper quote.

This is where a broker will help you. If you visit a website that offers (and we choose the term loosely) to compare business insurance, they do not always make it abundantly clear what the differences are. Sure, they will give the opportunity to view a key facts document or policy wording, but you want a human being to discuss this with you, whether it is face to face or over the phone.

Posted in business insurance, business insurance broker, cheap business insurance, compare business insurance | Comments Off

Fish and chip shop insurance – costs going up?

Saturday, October 9th, 2010

Most business insurance companies in the UK, will have certain target trades, or types of business, which they want to underwrite. It is very difficult to find one insurer that will cover every type of business. Some may specialise in the very high risk trades, such as the oil, aviation and space industry and others may specialise in packages for shops, hotels, pubs and offices.

Certain insurers will “dip their toes” in certain trades, in the belief that they can make money out of a particular trade. For some of them, they will find after a few years that this particular area, or line, of business, is not one for them.

So what do they do? They have a choice, they can either exit the business totally, or as many of them do, they remain in the business, but increase their prices so that they can increase their profitability. Lack of profit is usually the sole reason for them exiting.

Fish and chip shop insurance is one area where many insurers are starting to realise that the profits, or lack of, is starting to cause them issues and they need to get more money in. So, instead of increases around 2 or 3% year on year, you will start to see them increasing by double digit percentages.

You do have a choice when this happens, you can either stay where you are, or you can move to a different insurer. Using a business insurance broker is the best, and only, way to find this alternative. There are still insurers out there, offering competitive prices, but it is just getting a little harder to find them, this is where a broker comes into play. They know who, out of the range of insurers, are the best to go to in any given year.

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Shop insurance – check your physical security requirements

Friday, October 8th, 2010

Every shop insurance will include, potentially, two clauses regarding physical security.

Every policy will contain a minimum security condition and then, depending on the levels of stock in the premises, there may be an additional condition for an intruder alarm and/or other physical security such as grilles, shutter or metal doors.

Whilst we do not have any statistical evidence from the insurance industry as a whole, we do know that the majority of physical break-ins or attempted break ins, occur at the rear of the property. This you can understand as the rear of most properties is more shielded, usually dark and potential criminals can make more noise without being disturbed.

The minimum security condition on most policies will specify the types of locks that you need to have on both doors, and windows. You really need to take the opportunity to review the minimum security condition to make sure that you do comply. Fire doors are usually exempt, although this should be stated in your policy wording.

The condition will state that you may need to have a key operated five lever mortice deadlock. You can pick up one of these locks, that is approved by insurers, for about £20 in most DIY stores. But, and there always is a but, you need to check how this is to be fitted. Many security conditions specify the minimum thickness of any door that these are fitted to. If your door is too thin, you need to speak to your business insurance broker and get them to provide advice as to what you can do.

Other conditions may state that there are to be barrel bolts, or a substantial padlock. All security conditions are different in small, but very important ways. You are obliged to read through your policy wording and to make yourself aware of all conditions that may, or may not, apply.

Posted in business insurance, shop insurance | Comments Off