January « 2011 « BusinessInsure Blog

Archive for January, 2011

Restaurant insurance – leased premises

Thursday, January 20th, 2011

Most UK based restaurants and takeaways, operate from buildings either leased, or rented, from a third party landlord. A formal legal agreement, or lease, is usually provided. When we say usually, it is not a legal requirement to have a lease, for example if a family member or friend is letting to someone. But, without a lease there can be hugely complex legal issues arising in the event of damage.

Think about the example when a property is let short term, “to help a friend out”. This is all well and good, but what happens if the windows are smashed or worse, there is a fire or flood? Who is responsible for the repairs?

If there is a lease in existence, it will specify who exactly is responsible for arranging the commercial building insurance. It may be the landlord, who then charges the tenant. Or, alternatively the tenant may have a full insuring and repairing lease when they have to arrange cover for the structure (as well as their own contents and liabilities).

As experienced an experience business insurance broker, we would estimate that in England and Wales, over 90% of lease agreements state that the landlord arranges a separate policy. For the remainder, the tenant is responsible.

However, within these lease agreements, even if the landlord arranges cover for the building, the tenant is normally responsible for certain parts of cover. We usually explain that buildings should cover everything that you would not normally take with you if you moved location. This will include the shop front glass. But, not all policies will cover this. And, in the example we are talking about here for restaurant insurance, it is up to the owner of the business to ensure that their package policy also cover the glass. You should also check that you have an adequate limit.

Many policies include this, but for a basic couple of thousand pounds. When you add up the potential costs if all the windows in the premises were smashed, this is likely to be many, many thousands of pounds.

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Getting a non-package commercial insurance quote.

Wednesday, January 19th, 2011

Go on the net today and search for a business insurance quote. Nearly all of the sites that you visit, that offer online quotations, will have a set number of categories, whether for a pub, property owner, shop or printers. But what happens if your business is one of those that doesn’t quite “fit” into one of the insurers preferred categories.

For example, we had a sandwich bar, with a children’s hairdressers (believe it or not), trading from the same premises. This is not a salon, it is not a shop, it is a bit of both. The customer was a bit frustrated after being told on numerous occasions that she could not get a quote. It did not mean that there was anything wrong with her business, it just meant that the people she was talking to could not look out of the box and get a product for her. As it happens we placed the cover, at a competitive premium, on a commercial combined insurance policy. The reason for doing this is that we could specify exactly what the business description was, so in the event of a potential claim years down the line, the insurers could not complain that the risk was different to what they thought and potentially repudiate the claim.

Package policies, as you will see from previous posts of ours, are great. They help a significant proportion of the business insurance purchasing customer to get the policies they need. But there is a gap and that gap is filled by commercial combined polices. These policies are made up in stages, you pick and choose (along with your broker) the exact cover you need so that your business is insured on the correct basis. Also, you may have some out of the ordinary risks that are not normally included on a package. As ever, a broker is the person to speak to, as they will do the donkey work for you.

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Small business insurance – are prices increasing?

Tuesday, January 18th, 2011

In the business insurance broking world, we are caught between a rock and a hard place at times. One the one hand, we have the insurers who have been saying to us for at least three years that the average premiums out there are unsustainable and prices have got to increase. On the other hand, we have you, the insurance buying businesses who, quite rightly, are looking for the best price and the best cover.

The difficulty we have with insurers is, that whatever their size and whatever products they sell, they have a two tier pricing structure. For new business, they are prepared to pull out all of the stops and quote some, frankly, crazy prices. But, when it comes to renewal prices, they are more than happy to expect us, the brokers, to sell to you year on year increases, even for profitable business.

But is this the same story for small business insurance? As ever, the answer is a bit black and white, a sort of light-ish grey colour. Small businesses have tended, traditionally, to be more profitable (in insurance terms). They are usually run from home, owner managed and as they are someones sole livelihood, usually looked after and nurtured very well.

This means, that for every £100 of premiums paid to insurers, the profit return is higher than for say, £100 paid by larger multi-national businesses. This is because the larger businesses are able to attract better, cheaper rates and they are much more likely to have larger losses. When you consider hundreds and hundreds of businesses together, it has always been the same story.

But does this mean that you can still get a competitive quote? The answer is yes you can, but you just need to look a little bit more carefully than you did in the past. To help you in this process, you need to speak to a business insurance broker. Their sole aim is to work for you, the purchaser. In law, they are your agent and must take every step available to them to provide you with the best price and the widest cover.

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Restaurant insurance – getting the best premium and the widest cover

Monday, January 17th, 2011

Getting a restaurant insurance quote is quite easy nowadays, as the internet becomes one of the preferred methods for many who are seeking cover. The difficulty you may face is knowing exactly what you are purchasing.

I have worked in the industry for over 25 years now and when I started out, I was led to believe that I was in a mysterious industry that would take dozens and dozens of years to understand. For many types of cover that is true, expertise is something that you only gain from on the job training over many years. But for many business insurance products, the mystique has largely been removed. It is not rocket science, however you do need a trained eye to understand where to look in a policy to really understand what cover you have got.

Coupled with this issue of not always knowing, or more correctly, fully understanding what is covered, you want to buy a product that is competitively priced. There is no point in you getting six quotes, three are around £600 and one is at £2,000 and taking out the higher one because you think it provides the cover you need. There is a middle ground where you can still get a competitively priced quote, but in addition, you get the cover that your particular industry needs.

The way to find this middle ground, is not to look yourself, but to get a business insurance broker to do the work for you. You can spend time looking, but you will need to read through the summaries of cover, when comparing the prices. You can become a bit snow blind when you are comparing many different quotes. Yes, they will all look the same, but as they say, the devil is in the detail.

Even if you think you can get yourself a good deal, you should always speak to a broker as well. At least then you can compare the results of an expert, with your own, and then make your decision.

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Taking on employees? If so, make sure you have employers liability insurance.

Friday, January 14th, 2011

As a business insurance broker, we have seen some huge peaks in new business set-ups (2006 and 2007) all the way to the huge troughs of 2009 and 2010. Whilst we are not the ultimate economic barometer, we can see quite clearly that UK plc has been through quite a sickly period of time.

But, whilst we are not bold enough to say that the green shoots of recovery are out there (we cannot see because of the snow), we do know that the last two years has seen a lot of sorting of the wheat from the chaff. We may have mourned the loss of some large retailers, but if their business model was flawed, because they had to keep borrowing and borrowing, then eventually things where going to come to a head. This has helped some smaller retailers as some of the bigger high street names, who were discounting beyond belief, have gone.

We are not starting to see some businesses, after going through a sort of hibernation phase, starting to grow. This may mean that the sole trader who had to lay off their employees, are now starting to take on staff.

If you went from a trader with employees, to trading on your own, you would probably have removed the employers liability insurance. If you do not employ anyone then you do not need and should not pay for it.

Just be aware though, that as soon as you take on anyone, even if for a short while, if they are deemed to be an employee, then you have a legal requirement to have adequate cover in place.

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Office insurance – additional covers

Thursday, January 13th, 2011

Office insurance, in the UK, is sold via a “packaged” policy in the main. What this means is that the insurers produce a policy that includes the standard types of cover that they think you will need, as a trading office.

This will include the basic covers such as business assets, ie your computers, electronic office equipment, furniture and if necessary the building the office is in. As well as these basic covers you will usually have cover included for money, business interruption, employers, product and public liability and goods in transit.

As well as these standard covers, there is one other important, sometimes optional, one to consider. This is commercial legal expenses insurance. GO back ten or fifteen years and no insurers included this cover. As the UK has become more and more litigious, we are seeing more and more claims. The important thing is that liability insurance covers the cost of fending off spurious claims. Just because someone alleges you have been negligent or not followed correct procedures, it does not mean that they are right.

This is why you really need to consider having legal expenses cover. As an option to add to you office insurance, this is usually a very cheap option, some insurers will include as standard, others will charge just £25 per annum. When you look at the potential costs of responding to, dealing with, fending off and possible settling a claim, this amount is peanuts in comparison.

However, just becuase it is peanuts, it does not mean that you automatically get the cover included. If you have a policy in place at the moment, the best thing to do is to speak to your business insurance broker and ask them, outright, do you have the cover and if not, why not?

As an alternative, you can give Businessinsure as call and we can offer you a comparable quote to your existing cover, including legal expenses.

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

Finding a business insurance broker

Wednesday, January 12th, 2011

Choices, choices, choices – whatever you are buying whether a physical product or a service, with the internet being part of the fabric of our every day lives, you have unrivalled amounts of choice. If you are looking for a business insurance broker, it can seem daunting as to where you should actually look and then, who you should actually speak to.

In addition to the net, you have local papers, local directories, flyers coming through your door daily and personal recommendation from your friends. But which broker do you choose?

What you need to consider, is what sort of service that you want to get? We know that you will be wanting a competitive business insurance quote. But when we say service, do you want someone to come and see you or are you happy to deal over the internet and/or the phone?

Pre 1990, you had to go and see a broker or get them to come and see you. I can still remember getting my first car insurance in the 1980’s. This necessitated a bus trip to the local town centre and sitting in a brokers office for over an hour, to get a policy in place. I didn’t have a clue whether they were cheap or not or whether the cover was worth having. The choice was simply not there. But, less than 100 yards from where that (long gone) brokers office was, is a branch of Direct Line in Bromley.

They revolutionised the way you bought car and home cover. This has now been replicated for commercial insurance as well. If you do not want to speak face to face, either because of location or time constraints, then you can find exaclty what you are looking for on the net.

As simple basic search on the worlds favourite search engine, Google, will return not tens or hundreds, but hundreds of thousands of results. You should approach more than one broker, so at least you know you are getting the choice of choices, as it were.

Make sure though that they are authorised and regulated by the Financial Services Authority (by asking them) and that they are a pure broker, with access to a number, not one, of different underwriters.

Lastly, you do not have to go local. If you are in Inverness, you can deal with a broker in Penzance, if you choose.

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Shop insurance – getting the best deal on multi-location risks

Tuesday, January 11th, 2011

Think of any of the large UK based retailers and most started from humble, single premises origins. If you operate from one address, it is relatively easy to get yourself shop insurance. If you have read any of our previous posts, you will be well aware of the need to make sure that you get a policy that gives you two things. Firstly, wide cover and secondly, a competitive premium.

This is where is it is sensible, if not obligatory, to use a business insurance broker.

But what happens if you are starting out on the steps to grow your business and are looking to take on additional premises? In the news this morning the British Chambers of Commerce have said that the services sector, which includes retail, has not grown by as much as we envisaged. We understand December is a busy, busy time but the affects of the bad weather are, I think, being underestimated.

However, some businesses are looking for growth opportunities and commercial rents are still way down on the heady days of 2005-2007 when prices were absolutely through the roof. So, you may think now is the time to negotiate your new premises, in the hope and belief that things will start to pick up as we get to the end of 2011. It is depressing to effectively write a year off, but 2011 is going to be tough, but not too tough.

You have a choice when lookign to insure your additional premises. You can either add to your exisitng policy, or take out separate cover. The benefits of one policy are a commone renewal date but you also have a common payment date. If you pay im full, it can be hard to pay two premiums on the same day. The best thing you can do, is to discuss with your broker and maybe get options for both adding to your existing and taking out a separate policy.

Posted in business insurance broker, retail insurance, shop insurance, shop insurance quote | Comments Off

Office insurance – portable computers and smartphones

Monday, January 10th, 2011

Office insurance, as with most policies, will provide different sections or types of cover. The whole point of purchasing cover is that you want to protect your business, financially, from a potential loss or a claim made against you.

The potential loss usually results from damage to one of the business assets, whether this is general contents (furniture, photocopiers etc), computer equipment or the buildings (if you are responsible for these).

One of the larger causes of losses are for damage to portable equipment. As the UK plc workforce becomes more and more “portable”, we tend to take more electronic equipment with us. In the old days (20 years ago) the portable equipment you would need to insure under an office package was an overhead projector which you would lug around to different clients if you were giving a presentation.

Fast forward to 2011 and even the most junior of staff can have a business smart phone, netbook/laptop or some form of tablet computer. Whilst these items have undoubtedly come down in cost, any potential employee could have a couple of thousand pounds worth of equipment. If they are taking this with them (instead of the OHP) around the UK, EU or elsewhere in the world, then you need to make sure that you have adequate cover.

Most business insurance policies will allow you to insure this type of equipment. But you need to consider the following points:-

1) Make sure that you declare the full replacement value, including the value of any software that you may have to purchase in full.

2) Ensure that you declare if items are taken around the world. If you do not have worldwide cover, then you will not get a claim paid.

3) Check that you have a reasonable excess level. Excesses are part and parcel of your policy cover, £100 is a reasonable excess, maybe increasing to £250 or £500 for individual values in the thousands of pounds.

4) Computer breakdown cover is a bit of a must nowadays, computers do not always need to suffer damage to breakdown. The only issue here is that you usually need to have a full annual maintenance agreement in force for cover to apply.

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Pub insurance – best deals in 2011

Friday, January 7th, 2011

As we enter 2011, every type of business is looking for the best deals on not only physical products, but also services they buy. One of the areas where you can save is on your business insurance.

January the 4th has seen an increase in insurance premium tax from 5 to 6%. Whilst this is not a huge increase, it is something that has to be paid for by someone. Either you have to pay it, or the insurers have to reduce their prices accordingly.

We are seeing some reports in the press that companies may be using the increase in VAT to mask some other price increases. You may find some business insurance brokers will say that all insurers are increasing their prices. This is not strictly true. The answer is that most insurers are looking to increase their prices. But, if you have been claims free then you can still get a good deal just by looking around.

One of our providers, who traditionally have offered very competitive pub insurance, have now decided that they will increase prices in excess of 10%, or 4 times inflation. What do we in these situations? We simply offer their renewal and then seek an alternative at a reduced price, sometimes lower than 2010.

If your broker is not looking around for you and is trying to increase a premium (subject to no claims) in excess of 5%, then you really should take the opportunity to look around.

Businessinsure still have over half a dozen commercial insurers who are looking to grow their book of business for all types of licensed trade. If you are stumped by an increase in premium, give us a call and see what we can do.

Posted in business insurance, pub insurance | Comments Off