March « 2011 « BusinessInsure Blog

Archive for March, 2011

Getting a business insurance quote from a human being

Saturday, March 5th, 2011

Here at businessinsure, we are entering our 11th year of trading. From the very start we have set our stall out that we will sell business in a very particular way.

We operate what is, in essence, a call centre. We have an office base here in sunny (?) Perth. We run our website and have a local rate telephone number. Business customers can either email us or call us to discuss any business insurance requirements that you have.

We make a point of speaking to each and every customer. Even if you send us a form over the weekend, we believe that by speaking to you we can find out exactly what you need.

Even if it is a quick five minute call, we can get so much more information, quicker, than if you had to sit on the net and fill in a long form.

But, we have been hearing in the press recently that the comparison sites are making inroads into the commercial insurance arena. Now, we have long held the belief that the comparison sites do absolutely nothing to help the end customer buy the right product. What they do, is to help the customer find the cheapest price.

Now, there is nothing wrong with getting a good deal. If you look for a pair of trainers that are £45 in the shops and you find them for £35 delivered on the net, you have a good deal. You know this because, unless the product is fake, then you are getting what you want.

But, with business insurance, if you save money how do you really know if you are getting the same excess, the same warranties, the same levels of cover, the same limits of indemnity etc etc? What the sites will have is a click through link for you to go to. You will then have the chance of going through either a full policy or a summary of cover. But this is not your job. After a few pages you may start to wish you had not started this task.

This is where you are better off speaking to a human being. When we speak to you, we explain what it means when you say you have a 15 year old flat roof or you do not have a NACOSS approved intruder alarm, or your locks are not quite what the insurers say.

Going on the net, you get a price and that is it. Until you have a loss, you are saving money, but when you have that loss, you may find the £50 you saved is very small in comparison to the uninsured loss you have just had.

Posted in business insurance | Comments Off

Landlord insurance prices – rough idea

Friday, March 4th, 2011

When we are talking about landlords insurance, this covers four main areas. The building itself, any contents you leave in the property, property owners liability and loss of rental income. There are other additional covers, but 99% of policies will allow you to include these four items.

As we have seen in the press this week, the number of people renting has increased by nearly 40% in the past two years. This does not mean that we are going to get a return to the boom time of buy to let (remember when you just had to phone your bank and they would give you £100k to buy a city centre flat….).

What it does mean is that the sensible property investor, with a large deposit and a good idea of the actual rental income they will receive, can now approach their bank to get some proper finance. Whereas in the past two years this has been very difficult.

As part of this process, the bank will ask you many things, including what you expect the annual insurance costs to be. Now, the only way of getting a proper confirmed written quote is to speak to a business insurance broker. There are of course numerous sites that give quotes, but you really are better off speaking to a human being.

Now, that is how you get a written quote, but what if you just want an idea? The following is not in any way meant to be a binding quote, but it is an idea of the premium you are likely to be charged annually.

The premium is calculated based on the re-building sum insured. This is not the purchase price but the cost to rebuild. If it is mortgaged, you will have a valuation from the mortgage company. Take this figure and apply a rate of 0.20%. Of course, it depends where the property is, your claims experience, the construction and a whole host of other factors, but this will give you an idea. For a £100,000 house you would be looking to pay around £215.00 per year, once the insurance premium tax is included.

For contents, you can use a percentage figure of 0.75%.

Posted in business insurance broker, landlord insurance quote | Comments Off

Employment disputes cover

Thursday, March 3rd, 2011

As part of many, but not all, business insurance policies, you can have separate cover for commercial legal expenses.

It is quote an important distinction, but the title tells you exactly what you get, which is legal expenses. For any policy, in the UK, insurers always have the option of taking control of any claim. What this means is that, if they want to they can appoint their own builder to fix your roof, supply to replace your sofa or solicitor to fight any legal costs claim against your business.

Legal expenses does not mean that you can appoint the most expensive barrister and their legal team in the land, to fight any and every dispute you may have. What it means is that as soon as you become aware of the likelihood of a claim being made against you, you need to notify your insurers and let them decide what they want to do.

It may well be that they come back to you and ask you to get a fee quote from a local solicitor, but, in over 95% of cases, what they will do is to appoint a solicitor from a panel that they have worked with before and have agreements with. This way, the insurers are fully aware of what the costs are likely to be and the solicitors are used to dealing with claims of this type.

One of the major parts of commercial legal expenses insurance, is employment disputes. There are hundreds, if not thousands of employers every month who suddenly realise that a relationship, that they had with an employee, has deteriorated to such a degree that they may have to go to a tribunal.

To be fair, the legal system is OK in that it forces employers and employees to go through a formal greivance process before it gets to court. But boy, if you do not resolve it at grievance stage, then the costs will start to rack up.

This is where a) you want to have a policy that backs you up and b) your insurers are not going to just send an open cheque to pay a huge solicitors bill.

As with every single claim, you must, must, must notify your insurers, or indeed your broker, as soon as you aware of anything which may give rise to a claim. Even if you think there is a 0.1% chance of that bad appraisal with employee x turning into a full blown three week employment tribunal, you have to speak to someone about it. If in doubt, get on the phone.

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

ECJ ruling – the effect on business insurance.

Wednesday, March 2nd, 2011

So, we had the long anticipated ruling yesterday that motor insurers cannot differentiate their pricing on gender. This has been greeted with disdain by many. The fact of the matter is that the pricing was based on loss experience (ie women drivers have less losses and the losses they have are of lower value). It is now crazy that company a cannot charge a cheaper price for Miss X, in the knowledge that statistically they will make more money from her premiums than her (same age) neighbour, Mr Y.

But, the question is, how is this going to affect the market? Everyone knows that the end result of this is that the underwriters are going to slowly push their prices up for lady drivers. So, the ECJ puts out it’s ruling, but who does it benefit? The shareholders of the companies that are going to have to charge more money on the risks that they make more money on. So, they are, in its simplest terms, going to make more profit.

So, apart from cars, how is this going to affect business insurance premiums? Very, very little in reality. The insurers are absolutely desperate to make more money because they have been under-pricing all types of cover for years.

As most insurers will cover domestic insurance (ie cars, homes and travel) as well as businesses, then those that increase their motor prices will have more in the pot. This does not mean that your standard commercial insurance policy premiums are not going to go up or alter. If anything, they will simply use the extra funds (from the increased premiums) to continue to grow their book of business.

It is too early to see what the full effects of the ruling are likely to be. It just seems a bit perverse that legislation that has been built up since the 1960’s to, in the main, help put women on an equal footing to men, is now working against them. There are moans from people about the craziness of the legislation and I suppose, they are correct. This ruling does absolutely nothing to help female drivers whatsoever. It has cost millions of Euro’s to get to this stage and really, should they have bothered?

Posted in business insurance | Comments Off

Business insurance bosses – handbags at dawn

Tuesday, March 1st, 2011

In the world of business insurance, there are very few stand out characters. Not to say that people are boring, we just stick to our own geographic areas and communities with the companies we work with regularly. There are a few magazines that have the latest news. Over the past few years we have seen more and more articles regarding increasing rates.

Without going into too much depth, insurance has been, is and always will be a cyclical industry. I have seen many senior industry staff say that they are going to break the cycle, but it will never happen. If the chances of making good returns are there, then money will always flow in. Money flowing in means two things, more players and cheaper prices. We have seen, since 2003 an increase in the number of firms involved in underwriting (either directly or on behalf of an insurer panel) and as a consequence, with the money (debt) that has been kicking around in UK plc for the past 10 years, the prices have gone down. Year on year, at least 80% of our customers, for example shop insurance, are paying no more than 10% more than they were in 2002, which is not bad.

But, as we all know, Gordon Brown could not break the “boom and bust” cycle (it happens to everyone) and in 2008 it came crashing down around us. As a result, insurance pricing started to creep up. It is always commercial vehicle prices that go up first, then private cars and the gradually the rest. This is hwo our cycle works, the prices get cheaper and cheaper until there are no margins left at all. Then, all the cheap business that the insurers have picked up starts to lose money and they start to think about putting up prices.

So, going back to the characters. We don;t have a central handful of big names that can send messages out to the market, the industry and the public that get the price increase message across. But, in some of our magazines we are starting to see a war of words, or handbags at most, between a few bosses. Some are saying that prices are needing to increase and others are saying that they can afford to grow (ie undercut others).

Now it is ironic that some of those bleating about increasing prices have been the worst culprits for undercutting over the past three or four years. They must be hurting more than most and their shareholders or boards have told them in no uncertain terms, enough is enough.

So, we will have to sit back and see if they hold their own. If they say prices need to increase, then they need to increase their own first, but, we are not seeing this yet.

Posted in business insurance, shop insurance quote | Comments Off