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Archive for November, 2010

Understanding public liability insurance

Saturday, November 20th, 2010

Public liability insurance is a phrase that is used more in the business world. To understand what it means and whether you need to have it in place, we use the anology with your car. Everyone knows that if they drive a car, they need to have valid third party motor insurance. You do not need to have cover for damage to your car, or its contents or windscreen cover, this is your decision whether to take this cover out. What you must have is valid cover in place if you hit someone else’s vehicle, property or worse, a person.

Public liability, as far as insurance is concerned, covers the same things. If you, in the course of your business activities, cause damage to property or injure someone, then you can be held liable through the courts. But, and it really is a big but, there is no legal requirement upon you to take this cover out. Business insurance companies, as an industry, would like to see this being a legal requirement. Not because it means that they get the potential of more business, but because it ensures that everyone who can be held liable, has an insurance policy to fall back on.

If you work for certain other companies, they may insist on you having cover in place. This is usually at the insistence of their insurers, that any sub-contractors used need to have valid cover in place. If we consider what we have said above about insurers wanting this to be a requirement, this ties in with sub-contractors being asked to prove cover.

The only questions you really need to ask, if you are being asked to prove cover, is what limit of indemnity is required. Obviously a higher limit of indemnity, such as £5,000,000 is going to be more expensive to you, than £2,000,000. If you have a contractors form to complete, speak to your broker or better still, fax the form through to them to complete, they should not charge you for this.

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Business insurance quotes

Friday, November 19th, 2010

As an independent business insurance broker, operating in the UK, we have seen a huge dip in new businesses starting up since early 2008. 2007 wil be looked back as the year when everything went crazy. I remember trying to get a first mortgage in the early 1980’s and getting blood out of a stone would have been much easier.

Roll forward to 2007 and it seemed, if you wanted a business loan, that you just needed to turn up at a bank with a business plan (that didn’t need to stack up) and you would get any amount of funding. People were starting businesses up like it was going out of fashion. Particularly, it was the leisure trades that seemed to be on the up, pubs, restaurants, clubs and takeaways were opening up at a massive rate. At times, we could not cope with the amount of new businesses enquiries.

Then, as we know, in latter 2007 it all went a bit pear shaped. The banks realised that they had been more than foolish and lent money to businesses and individuals that they, the banks, had borrowed and there was not much chance of getting it back.

But, in UK plc, we are a resilient bunch. No-one in government will ever talk about green shoots of recovery again, but we are starting to see signs of some growth. The new coalition government is putting its faith in the private sector (at last) to come good and save the UK. People are starting to realise that now is the time to start a business, you will never in the next few years be able to get such good commercial rents, for example.

Along with starting your business, you will need to give consideration to getting some business insurance quotes. Not much has changed, price wise, since 2007. Insurers are still keen to get business on the books and if it looks an attractive business proposition, then you have a good chance of getting a competitive quote. The best way to stand yourself in a good chance of getting this, is to use a business insurance broker. Do not go direct to an insurer as you only get one price, a broker will be able to look at a range of insurers and give you the best price and cover they can find.

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Combined liability insurance

Thursday, November 18th, 2010

As an independent business insurance broker, people will phone us up, looking for a quote. Chances are they have been asked, or have read somewhere, that they need to have liability cover. But what is this and what do they actually need?

You can be liable in one of two ways, under civil law or under criminal law. What it means is that some action you have taken, or have not taken, causes injury, damage, illness, disease or financial loss.

There are, as we have said two types, your liability under criminal law could be for corporate manslaughter, whereas under civil, or common law, this could be if you, say as a plumber, damage someones house. Whilst it is not a criminal act, the householder could, if they choose, take you to court to get this rectified.

The three main liability covers are public, employers and products. These are usually put together as one policy, combined liability insurance. Where you are liable for financial loss, ie a solicitor incorrectly advising you, which leaves you out of pocket, this is professional indemnity.

So what do you do if you need this cover and do not have it in place at the moment? The simple answer is to speak to a broker. A broker has the ability to approach different insurers, rather than just go to one.

Depending on what you do, your turnover and wageroll and your claims experience can mean that insurer A does not want the business and will price themselves out of the market. Whereas insurers B and C are quite keen for the business and will price competitively. The only way you can know this, and get the best price AND cover, is to get a broker to scour the market on your behalf. Best of all, they do not charge for getting quotes.

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Public liability insurance – £1, £2 or £5,000,000?

Wednesday, November 17th, 2010

We can confirm that public liability insurance is not a legal requirement in the UK. The only liability insurance that is covered by legal statute is employers liability and third party motor.

But, nearly every single business in the UK will have this cover in place. Why is this? There are two reasons.

Firstly, most of the package policies that are provided in the UK include public liability as standard. You tend not to be able to get a policy unless it has the minimum of public, or PL, and some form of business assets cover on a package. You can get tradesman’s and combined liability policies that do not include asset cover. In the main though, most companies will have this cover.

The second reason is because businesses have been asked to have this as part of a contract. If you supply a service or a product to another UK based company then they may insist on you having cover in place. This is to protect them in case you cause any injury, illness, disease or damage in the course of your business.

So, the question is what limit of indemnity do you actually need? Most business insurance underwriters in the UK will sell cover, starting at a particular limit of indemnity, normally the minimum you can obtain is £1,000,000. This is, unless you go to a “fringe” insurer that restricts cover, normally any one loss. Technically, you could have ten losses at £500,000 which takes you over the limit. Watch out for the “fringe” insurers though that only offer cover in the aggregate. ie this is the total amount in any one year. So, you could only have two of the above £500,000 losses.

Whilst £1m is the minimum, most will provide other limits at £2m or £5m. To go above this you would normally need to speak to an independent business insurance broker who will go to the market to get you £5m from one insurer then additional limits, say another £5m from another insurer and these two policies run in conjunction.

You have to consider the potential damage you could cause, what your contracts request and then compare the costs of the different limits. We always suggest erring on the side of caution and taking out the higher limit. But, speak to your broker and get them to help you decide.

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Wholesalers insurance – waste warranty

Tuesday, November 16th, 2010

If you have a wholesalers insurance policy, the chances are that it is not a bespoke policy, it is more than likely that an insurer has based your cover on a commercial combined policy.

Most insurers will have packages for shops, pubs, hotels, offices, restaurants and takeaways, to name but a few. Other businesses which do not tend to necessarily fall into one of these categories will be placed, or underwritten, via a commercial combined insurance policy. It really is a case of doing what it says on the tin, it combines the usual covers that you need for a particular trade.

In addition to combining the different types of cover, insurers will apply individual warranties and conditions to each policy. For a wholesaler, there will be, somewhere in the wording a waste warranty.

Drive round any industrial estate and you will see large wheelie bins and pallets everywhere. A waste warranty says that you must remove all rubbish from the premises, either daily or weekly.

The reason you should check your warranty is, because in the case of a fire, if it can be proven that waste was not removed, in accordance with the warranty, then you could have your claim repudiated. Why? Because you are essentially leaving, or storing, combustible materials in the premises which will add fuel to the fire. Without that waste being stored in the building, would the fire have been so bad? It is of course very difficult to prove, but it is something that you need to be aware of.

When we mentioned pallets earlier on, most insurers who undertake surveys will mention to us, as the business insurance broker, that the customer is storing pallets too close to the building. This can cause two problems. Firstly, there is of course the risk that there is a fire, arsonists can wander around the esate and pallets, with their numerous air holes and dry wood, are very easy to burn. Secondly, there is an issue with people using them as ladders to gain access to a building.

As with all insurance policies, you do need to check through the wording from start to finish and make sure that you comply with all conditions, terms and warranties that apply.

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

Pub insurance – what affects the cost?

Monday, November 15th, 2010

Pub insurance, as with any type of business policy, is priced (or a premium calculated) based on a number of risk factors. Insurers have years and years of statistics upon which they normally base their premium calculations.

When looking for a quote, depending on who you speak to, you will be asked a number of questions. Of these, a certain amount will have a direct affect on the premium and others will affect whether insurers will accept the risk and what terms and conditions they will apply.

The main factors which affect the cost are the location, the sums insured and the type of business.

Location can affect things in two ways. City centre pubs will attract a higher rate but, remote pubs will also attract a higher rate. Each business insurance company will build in to their pricing the potential fire risk. If you have a pub that is only covered by a retained, part time, fire brigade the potential of a higher (cost wise) loss from a higher is increased. City centre pubs are simply more likely to be broken into and/or have windows maliciously damaged.

Sums insured will, of course, affect the cost. But, you should never consider insuring for less than the correct amount to replace your contents, buildings or stock. If you do, then insurers could reduce any future claims settlement.

The type of business will also have a direct influence on your premium. Factors such as late licensing hours, whether you have doormen (even if they are agency), the entertainment you provide and whether you charge admission.

When looking for a quote, the only way you can really be assured of getting a range of prices from the market is to speak to an independent business insurance broker. Some insurers want to underwrite country pubs (and skew their prices accordingly) whereas others are happier to competitively price city centre pubs. Without going to an independent, you do not know whether or not you are getting the best “market price”.

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Beauty salon insurance – glass and sanitary ware cover

Sunday, November 14th, 2010

Anyone who owns or runs a hairdressers or beauty salon, will know the importance of a quality salon insurance policy. You will of course never expect to have a claim, that is the whole point of the cover, it is for the unexpected event.

If you have been running a salon for a number of years, the chances are you will have had a broken window. Not everyone of course, but as far as salons are concerned, in our experience, this is the biggest source (in number) of claims.

The value of each claim is of course limited to the cost of the replacement glass and any emergency call out costs. Increasingly, insurers are starting to apply overall limits to the sum insured for glass. You really do have to work out a rough idea of the replacement cost for all of the glass, front and back, at your property. Whilst a small back window may only be a few hundred pounds, your main shop front windows could cost thousands of pounds each to repair.

So, if your policy has a limit of a few thousand pounds and you have more than one ”large” window, you really need to get your limits checked. Some of the better, longer established business insurance companies, do have cover that is unlimited. This is a bit like final salary pension schemes though, they are disappearing fast.

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Unoccupied property owners insurance costs

Saturday, November 13th, 2010

Many people find it hard to believe that insurers will charge a much higher rate (or premium) for different types of cover, such as unoccupied building insurance than they do for ones that are occupied.

Insurance is all about pricing based on two main aspects. The first one is the insurers historical statistics, or other statistics that they can get from trade bodies. They know, over many years, what premiums they need to charge for the particular type of business they are underwriting.

The second main aspect, which tends to overrule the first, is market pressures. Think of a human being, people say you either think with your heart or with your head. The head is the logical side and the heart is, at times, the illogical one. So, believe it or not business insurance companies are the same.

Their statisticians tell them to charge x (to make a profit) and the market pressures mean they actuall charge y (which does not always make a profit).

This means that for many different types of policies you can get different prices. So how much should you expect to pay, annually, for your empty building? The good thing is that the rate does not tend to be different, wherever in the country you are.

The average, based on our records, is a rate of 0.30% against the total cost of re-instating the building. So, your £100,000 building, will cost approx £315.00 per annum, once you have added in insurance premium tax.

The way to work out what you are being charged, is to get the premium, divide this by the sum insured and multiply by 100. So, £315.00 divided by £100,000 multiplied by 100 gives you 0.315.

You may be charged more, but anything in excess of 0.40% is too high. If you are looking around for an alternative, use the above handy calculation to see if your current broker is charging you the going rate.

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Business insurance – claims conditions

Friday, November 12th, 2010

Every type of commercial insurance policy, whether for a shop, hotel, office or any other type of trade will have certain terms, conditions and warranties within the actual policy wording.

Your policy is a contract between you and the underwriter that is, in exchange for receiving a premium, taking away some of the risks that your business faces. As it is a contract, there is an onus upon you to comply with certain aspects of the wording and on the other hand, the insurer complies with their parts of the contract.

Whilst every part of the contract, or policy, is important, some are more important than others. The whole point of the policy is that if you face an insurable loss, under the contract, then you expect either financial re-imbursement or replacement of damaged property.

To ensure that you stand the best chance of have any claim settled, to your satisfaction, you must comply with the claims condition. This could cover a number of different areas.

Firstly, if there has been a theft or attempted theft, or malicious damage (ie smashed shop window) then you will need to report this to the policy and obtain a crime reference number. Usually this has to be done within 7 days of the damage/theft.

Secondly, you need to report this to either your insurer or the busines insurance broker that arranged the insurance cover for you. Do not,whatever you do, go ahead and get the work rectified, without authority from the insurers. To get this authority, they will usually require a claim form and estimates for repair or replacement.

There is an obligation upon you to mitigate future losses, so you may have to get a window replaced immediately. However, you must speak to your broker, usually, as soon as possible. Even if you leave a message on their answerphone in the middle of the night, you are doing the best you can. They should then phone you as soon as you open.

Insurers ay wish to investigate a claim, either in person or by appointing a loss adjuster. Or, they may want you to provide estimates so they can work out that what you are being quoted is competitive. Many insurers have approved repairers or companies that will replace contents at much reduced prices than you could obtain in the shops. If you go ahead and replace, and they feel you have paid over the odds, they can reduce your claim.

At all times, we always recommend you go through an insurance broker. The good thing about a broker is that there should always be someone you can talk to fora bit of advice when you have to submit a claim.

Posted in business insurance, business insurance broker, business insurance claims, commercial insurance | No Comments »

Where do I go to compare business insurance?

Thursday, November 11th, 2010

If you hit the net and enter the search term compare business insurance, you will be hit with not one, not two but over 15,000,000 results. Now, no-one in their right mind is going to sit there and visit every single site, there is not an infinite number of insurance companies in the UK. This means that even if you look at half a dozen sites, you are going to start to see results from the same companies.

But why is there a difference in the cost? If you are happy to spend time filling in the ever lengthy online forms, you will soon realise that they tend to ask you the same questions. So, if they ask they same information, and you are consistent in your declarations, then why are there such big price differences?

There are two reasons. Firstly, it depends on how much the owners of the site are taking as commission or as an “introductory fee” as this is built into the price. Secondly, and much more importantly for you as the business insurance purchasing cusotmer, is the difference in cover, terms, excess, warranties and conditions.

It can be mind-boggling when you get two quotes, from the same insurer, from different sources to be able to compare apples with apples. In answer to the question, as to where do you go, you need to speak to a human being. Whilst these sites are all well and good for getting car and home cover, when you are talking businesses, there are so many small differences that you need a broker to understand exactly what you require and to find you exactly the cover you need.

Forget the sites with no human interaction, speak to human being, there are thousands of brokers out there just waiting for your call.

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