May « 2011 « BusinessInsure Blog

Archive for May, 2011

Commercial property owners insurance – multiple risks

Monday, May 16th, 2011

As with many services and physical products, the more you purchase the bigger the discounts. This applies equally to commercial property insurance as with most other financial service products.

What this means is that if you approach a single insurer and ask them for a quote on one property, for example a £250,000 shop in Manchester, they may give you a price of £450.00, inclusive of the insurance premium tax. There are many differing factors, such as location, construction, claims and of course type of occupancy that affect premiums, amongst others, but stay with me for a minute or two. Now, let’s assume that you have 9 other, more or less identical buildings in similar rating areas throughout the country. Now, instead of paying 10 x £450 = £4,500, you may only pay £3,500 to £4,000 as the commercial insurance companies are so keen to get in (good) business nowadays that they will offer discounts of up to 25% in some cases. This is all well and good and could represent a saving for you. To give yourself the best chance of getting the double of good premium and good cover, then you need to speak to an independent business insurance broker. They understand what every single insurer is looking for at any one particular time. So, rather than looking for that needle in the haystack yourself, get an expert to do it for you.

But, you do need to be cautious as this is not always the best way of getting the right price. Most insurers prefer their own different types of business, there may be a few that want the same things, but across the board you will not find a single insurer that is happy with all risks. For example, you may find an insurer that likes low risk property owners, ie offices, shops etc. So, you can give them 1o risks of this type and get yourself the nice big discounts. However, if one of the risks happens to be a fast food takeaway, you may find that that one insurer charges three or four times the market rate.

Keeping all your cover with one insurer does not make sense if you have a varied portfolio. As a broker, we prefer to look around for each and every risk presented to us, unless the type of risk is the same (ie residential lets – professional tenants), we will never automatically place all the risks with one insurer. This is lazy and never the right way.

Posted in commercial buildings insurance, commercial insurance | Comments Off

Public liability insurance – height limits

Saturday, May 14th, 2011

Public liability insurance will either cover clerical and managerial (non-manual) business activities, or manual activities. The first, and lower risk, is cover for businesses where there staff may visit other properties and in the course of that visit, cause injury or damage. So, the salesmen goes to visit a customer and accidentally knocks a PC over. Yes, this is a scenario that is unlikely to happen, a once in a blue moon event. But, these things do happen and this is where a policy will step in and pay the cost of any damage caused.

The events that are more likely, and of higher risk to the commercial insurance companies, belong to the manual trades. The plumbers, air conditioning engineers, painters and decorators, carpenters and electricians are the typical trades that have more public liability claims. Where they do have claims, they tend to be of higher costs.

The frequency of claims does not tend to be too high, most contractors will tend to try and sort out any problems directly, rather than resorting to making a formal claim. That said, if it does get to the stage of a claim being made, then the cost is likely to be high. The last thing the contractor needs is for their insurers to turn around and say that there is no cover in place.

This does not happen very often and only tends to be the fringe insurers that thrive on referring to the small print. As a business insurance broker, we are not allowed to recommend a policy with an insurer that we have any qualms about. The only problems you usually have with insurers, relate to their ability to pay claims. We do not use insurers that we have concerns about, but this does not stop others using them.

One of the reasons that they may turn down a claim is height work. Most contractors policies will allow work up to 10 metres. This usually means the top eaves of a standard two storey house. Any higher, and the insurers must be told. If you do not tell them and you are working in or on a block of flats or an office block, this could cause a problem.

Two things for you to do. Firstly check your policy to see if there is a height limit and secondly, if you do have a limit, get on the phone to your broker to see if the insurers can extend the height limit. It is always worth seeing if it can be done for free. However, there may be an additional charge for this.

Posted in commercial insurance, public liability insurance | Comments Off

Business insurance – exhibition cover

Friday, May 13th, 2011

More and more businesses are now attending exhibitions. We have an increasing number of calls from sales people offering us stands at exhibitions throughout the UK and EU.

Whilst we do not attend exhibitions ourselves, many of our customers do. There are two points to consider, as far as business insurance is concerned, when attending exhibitions.

Firstly, you will be asked, in the majority of cases to prove that you have public liability insurance that extends to cover you whilst attending any exhibitions, trade show or similar event. Usually, the limit required will be £2,000,000. This needs to cover your business in the event of any damage you may cause to third party property (eg someone else’s exhibition stand) or third parties (eg if your stand falls and hits someone).

Caution is required here. If you do not have the cover, the exhibition organisers have bene known to charge up to £250 under their own scheme. This is way, way over the top. The chances are your current policy will already include this cover. If you need EU cover, then this could be somehting you need to pay for.

Secondly, you need to make sure that your policy covers any exhibition equipment, contents or stock that you may take with you and leave at the exhibition.

We have just had a call from an existing client who have added up the cost of all their exhibition equipment, which is just display stands and a demonstration PC and it is just shy of £10,000. This needs to be covered anywhere in the world and at present, they do not have the cover.

Sometimes you are better getting an annual extension to your policy cover as you may find that some of the smaller commercial insurance companies charge extortionate fees for one-off extensions. Adding the equipment on an annualised basis may be the best way to go. If you have bought your cover the right way, then you will have a business insurance broker that you can discuss your requirements with.

Posted in business insurance, business insurance broker, public liability insurance | Comments Off

Nothing to do with Business Insurance

Tuesday, May 10th, 2011

Just sharing the excellent article from Ian Gallagher in the Daily Mail. The last paragraph follows:-

But then Hugh’s devotion to wife Lulu is so strong it is understood he is known to fellow thespians as the Ryan Giggs of the showbusiness world, after the famously family-orientated footballer.

This is an article about Hugh Bonneville, who along with Ryan Giggs has set Twitter alight over the past few weeks. If you can put one and one together to get two, then you can work out the identities of two people who have taken out super injunctions. Now, the bit that I do not understand is that Max Moseley has gone to the European Courts today to try and get them to agree to newspapers notifying people before a storey goes out. Now, if this is the case currently (that celebrities are not notified prior to stories going out) how come Bonneville and Giggs managed to get super injunctions in place?

Business insurance is here.

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Business insurance – manual work using heat

Tuesday, May 10th, 2011

Having worked for a large commercial insurance company for many years, prior to my current role, there were many types of work that the underwriters did not like. When I say underwriters, I mean the proper ones at the top of the tree that actually decided the individual premiums for classes of risk. Nowadays an underwriter usually just means someone that can apply the rates in a manual to get a price. A true underwriter is the one that puts the rates in the book in the first place.

Apart from the usual high risk public liability insurance categories, such as working on oil rigs, airports, nuclear plants etc etc, they did not like (and still do not) businesses where there is a lot of heat work. By heat work (or hot work), we mean using blow torches, blow lamps and welding equipment. In effect anything that uses a naked flame. Soldering irons and glue guns do not fall under this category as they usually safer.

Now, when we say the underwriters do not like this type of trade, this does not mean that they are not prepared to cover them. What they do is to rate the risk accordingly (ie charge a higher premium if necessary) and apply terms and conditions to ensure when heat is used, it is used carefully.

We speak to many, many contractors, builders, electricians, plumbers, heating engineers, you name it, on a day to day basis. They all tell us that the hot work permits you need nowadays to work on bigger sites, are extremely onerous. So onerous in fact, that they cannot even perceive there to be a chance of a loss.

That said, losses do occur and when you are using fire, usually in an enclosed space, with gas canisters in the vicinity the losses are not going to be very small. When they do occur, these are the multi-million pound fires that you read about in the press. The problem for businesses is, that the conditions in policies regarding the use of heat, do not always tie in with what is required under a hot work permit.

If you do use heat you need to do two things. Firstly, tell your business insurance broker to ensure that your policy cover you correctly. And secondly, make sure you read through any heat use conditions in your policy.

Posted in business insurance, public liability insurance | Comments Off

Super injunctions – the point is what exactly?

Monday, May 9th, 2011

A strange start here, but have just returned from a weekend away. Went to a fantastic hotel way up north next to a remote Loch. Apart from the weather, everything was great. Now, this made me think of a few hotels I stayed in many years ago when I was setting up the company on the proverbial shoestring. I had to visit dozens of business and commercial insurance companies up and down the land to try and secure the agencies we needed to operate and trade on a truly independent footing.

That said, I have to stay in some ropey old hotels. It wasn’t necessarily that I was being tightfisted (which through necessity I was) but in those days you couldn’t pick and choose your hotels the way you do nowadays. There are dozens of websites where you can go to check out other guests reviews of the hotels you are planning to stay in.

Whether the hoteliers like it or not, the reviews are as honest as you can get and I would hazard a guess that the majority of people booking leisure breaks do tend to look around and would pick or choose based on a few good, or bad reviews. What I am saying here is that the public speak. It can be a double edged sword for some of the businesses. Do you choose to block yourself from these sites, or do you stick with it hoping to build up some sort of quality feedback?

Most will of course pick the latter. Now we come to the super injunctions. As ever a uniquely British affair, for want of a better word. A celebrity thinks that if their extra marital affair is broadcast, it will breach their human rights. Instead of human rights, we need to think about their future earning potential and how the public perceive them. It is of course nothing whatsoever to do with their rights, it is just that they have been caught bang to rights.

Unfortunately for them, being a celebrity (and yes that does include sports persons) means that your every move is broadcast. Yes, your offspring should be protected but if you have been a naughty girl or boy, grow up and accept the consequences. If you don’t, as with the bad hotels and the reviews, you will get found out eventually.

Lets hope Twitter continues in the same vein it did on the 8th May 2011 and outs (the correct ones) this week.

Posted in commercial insurance, super injunction | Comments Off

Business insurance and the three year rule

Sunday, May 8th, 2011

Complacency in financial services, from the customers, allows the banks and, in particular commercial insurance companies, to make huge profits from slowly increasing fees, costs and premiums for their existing customers.

It is well know that to get a new business insurance customer costs around three times more than it does to renew an annual policy. You would think that insurers would recognise this and be more sensible with their renewal prices. But, not all of them take heed of this. Many will simply increase the premiums by single digit amounts year on year, in the hope that it is not enough for the customer to consider leaving.

In brief, the three year rule is as follows:-

If you have been claims free your base rating (ie excluding index-linked increase, increased sums insured etc) should not have increased by more than a total of 10% in the last three years. If it has make the effort to get an alternative business insurance quote at your next renewal.

So, if your premium in 2008 was £1,000, you would expect a rough 3/4% year on year increase. 2009 would be £1,040 and 2010 £1,071. This gives an overall increase of just over 7%. If yours is over 10, then you are more than likely to be able to get a cheaper alternative, you just need to make the effort to look around. This is where Businessinsure can help, call or email and see what we can do for you.

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Landlord insurance – loss of rental income cover

Saturday, May 7th, 2011

We are currently going through a very warm period in the UK, forest fires are everywhere, with many unfortunately started deliberately.

But, as a business insurance broker, we are still dealing with the latter end of some of the harsh winter claims. It may seem a distant memory, but it is not that long ago that we were advising everyone to be careful of burst pipe claims. The winter of 2010/2011 has gone down on record as the worst for burst pipe losses that I can remember. The reason we are still dealing with the remnants of the claims is because of the loss of rental income cover.

If you are a landlord and have a landlord insurance policy, you must, without fail have cover for rent. Too many insurers only offer this as an option and, when you compare the quote with and without the rent, people do still choose to take the cover without rent. It only adds 5 or 10% to the premium and is always, always worth adding. We have one house, where the owner was getting £350 per week rent. A pipe burst in the attic, when the tenants were away for Christmas. The three storey house was, for want of a better word, completely and utterly trashed. Three floors were removed to prevent the whole building collapsing. The works are due to complete about July time and the owner is due to rack up a loss of rental income claim of around £12,000 on top of the £40,000 repair costs.

When we see extreme examples like this, we always thingk it is wrong not to have loss of rental income cover. If you have a policy without it, please give consideration to adding this, whatever the cost. As always, speak to your business insurance brokers as they are the experts in the field, they can get the cover added or look for a cheaper alternative with a different insurer.

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

Business insurance – start ups

Friday, May 6th, 2011

After the depths of 2008-2010, we are starting to see increased business start up activity in the UK. In recession, the entrepreneurial spirit was still strong in the UK, but not as much as the glory days of 2005 – 2007. We say glory days with tongue firmly in cheek, the banks fuelled too many start ups with easy funding. What they should have been doing is helping and nurturing businesses, rather than throwing money at any one that walked across their door step.

That said, we have not lost as many businesses as the doom-mongers predicted. As a business insurance broker, we are well placed to gauge the business confidence. As part of the planning process, you will always need to sit down and consider the costs that your new venture will face in it’s first three years of trading. The statistics are still unchanged in that businesses face a much better chance of survival if they get through their first year. The way the UK economy has been recently completely rubber stamps this statistic.

As part of this process then, you will need to know lots of different costs, from premises, payroll, taxes, rates to business insurance. A broker cannot really provide a quote unless they have been given detailed information about the business. This may be difficult at idea stage, but you can ask them for an indication of premium. This is basically where the broker gives their very best estimate of the annual costs, but you cannot hold them to the cost.

In reality, it is pretty easy to do this and any indication that is provided is more or less going to be within 5 or 10% of the final annual premium. The beauty is that this allows you to fill in another box in the planning spread sheet so you can see whether or not you are likely to make a projected profit.

Posted in business insurance, business insurance broker | Comments Off

Landlord insurance – contents cover

Thursday, May 5th, 2011

Landlord insurance policies, whilst based loosely on a standard household policy, do differ in many ways. With your home, you are much more likely to have one policy that covers the buildings and contents together. Whilst you can split them, most insurers will actively encourage you to place them both together, with different discounts available for the combined cover.

As landlords policies tend to be issued by a commercial insurance company, there are, as you would expect, differences. The main one being that you can obtain cover for loss of rental income (see Saturdays entry).

The other main difference is that you do not tend to get contents automatically included. With the vast majority of let properties being unfurnished, you would expect, quite rightly, the tenant to insure their own contents, because you (as the landlord) do not have an insurable interest in their TV, settees or clothes etc.

However, who is responsible for the carpets, vinyl, linoleum, curtains and possibly white goods in the kitchen? You, as a landlord, are responsible for these items and, importantly, they do not fall under the definition of buildings. Any flooring that can be picked up (even carpets) and moved falls under the definition of contents. It always has done and always will.

We always recommend to customers looking for a new quote that they include contents, even if it is only for a few thousand pounds. It makes such a small difference to the premium that it is foolish to not insure it. But you would be surprised at the number of people that do not want it, even for an extra fiver on their quote. Then, when they have a burst pipe claim and the carpets or curtains are damaged, we have to go through the process of telling them that the cover does not apply as they only have buildings cover.

We do try, and as a business insurance broker, are obliged to point out to the customer their cover requirements. If you need a quote, please always listen to the recommendations of your broker.

Posted in commercial insurance, commercial insurance quote, landlord insurance, landlord insurance quote, landlords insurance | Comments Off