Everyone who has ever had a business or commercial insurance policy will be aware that excesses apply to nearly all covers. An excess is the amount that you, the business owner, will pay towards any claim. If you have ever had to replace a car windscreen, this is usually a painless process as you just pay the installer your £25 or £50 excess. It doesn’t affect you no claims and to be honest, £50 for a new windscreen is not bad, particularly when they can cost over £1,000 to replace in many modern vehicles.
Returning to businesses, what is, and what is not a reasonable excess? We are seeing more and more alternative quotes which are cheaper than ours, purely because they have a huge excess. We offered to renew a restaurant insurance policy the other day. The customer had been with us for years, had a couple of small claims but over the six years, the insurers had just about made a profit. So, we could not expect the insurers to offer renewal at a huge discount, but they did maintain their £200 excess.
The customer told us that they had been pursued (they did use the word stalked!) by an online business insurance broker. Who, miraculously had offered a cheaper premium. As the customer had been with us for a while, they forwarded the email. All looked OK except their excess was £250. So, going back to our £50 on the windscreen, it is not a huge difference, but a difference.
However, in the small print, on page 9 of 12 in the alternative quote, it said that theft and malicious damage claims were subject to an increased excess of £750. The two claims they had were for a break in and smashed window, so, if they had gone with alternative, for every claim they submitted, compared to our renewal, they would be a whopping £550 down.
Thankfully, our customer realised that this was almost a deliberate ploy (to “hide” the excess) and renewed for a further year. If you are looking around for an alternative at renewal, please make sure you read every, single page.