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Archive for June, 2011

Jack, Ken and the Insurance Industry

Thursday, June 30th, 2011

I know I could get vilified for saying this, but I have always respected Ken Clarke. It does not mean I am a staunch Tory but he does have a matter of factness about him and has always proved that he is prepared to fight for a cause. On the other hand the Blair/Brown partnership and sharing of the top job did fill me with dread. Blair was just someone I could not take to, everything about him, his friends and that wife made me dislike him. Then he was replaced by El Gordo, the most useless prime minister in my lifetime, and I have seen a few.

But, my dislike of the slimy-ness of New Labour I did like Jack Straw as one of the best of a pretty bad bunch. He always looked like someone with some good principles who didn’t exactly like his leaders, but just wanted to do his job.

We are seeing reports in the press of Jack Straws new cause, referral fees on insurance. These really are the bane of everyone’s life in the personal and business insurance industry, except the solicitors. No-one who deserves to earn from referral fees does. Solicitors, insurers, agents – all and sundry earn money they should not have and the poor old punter who suffered the accident gets about thruppence ha’penny more than they should have done because all the other sharks in the chain take their cut.

It would be good to see Ken Clarke work on the same wave length as Jack Straw and decide that these fees are just a complete and utter con. I am not saying that the future of the motor insurance industry depends on this, but it would seriously help the industry in the future. Let’s wait and see.

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Renting, it's the new black.

Wednesday, June 29th, 2011

Believe it or not, this is the phrase I heard someone utter last night. Bumped into a mate who was telling me about his recent moves, he has lived in about three properties I can think of in the last year. He was extolling the virtues of renting to me, in reality he was simply moving from property to property to try and leave behind some of his debts. He was hoping that if the companies couldn’t find him, then they would write off his large credit card debts. Time will tell whether this works out for him, I doubt it very much.

But he did say that renting was the new black and everyone was doing it. Obviously not everyone, but I got the drift. He was telling me that the benefit was that you did not need to worry about maintenance or repairs. If you got a burst pipe you just phone up the landlord and demand it is fixed.

When we moved house in 2007 the recession did not exist, we were told it was a credit crunch at that time. The mortgage market was balanced precariously at the time and although we were buying in Scotland, which has a more stable property market, the chain we were involved snaked throughout England. There were 7 different properties being bought and sold and the whole chain was supported by a first time buyer. Thankfully it all went ahead with just a few hitches.

At the time we considered getting a buy to let mortgage on our old home, in case we could not sell. This is now commonplace, accidental or unintentional landlords are springing up all over the place. Now some of them will have demanding tenants like my mate. If they do, they need to make sure that the have a suitable landlord insurance policy in force. Therefore, when the tenant phones up and demands x or y is fixed, it is relatively easy to speak to your business insurance broker and, as long as you get a couple of estimates quickly, you can get the works undertaken pretty quickly.

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

Renting, it’s the new black.

Wednesday, June 29th, 2011

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

So, why exactly are you looking for a business insurance quote?

Tuesday, June 28th, 2011

This is a question that BIB asked a customer yesterday. The situation was that they are insured with Insurer A through a broker for 4 years. The broker had offered the same business insurance policy each year, with increases, year on year, around the 7.5% mark. The customer has just received their 1st July renewal offer, which apart form being very late, had another increase.

They had then decided to look around for another quote. BIB decided to ask them why they were looking, in the nicest possible way. The reason being that they were paying £14,000 per annum and this years renewal was offered at nearer to £15,500. The problem we face as an online business insurance broker, is that we could quite easily get a quote under the £14k mark, in fact ours was nearer to £12,000. But, when we go back to the customer we know full well that their existing broker is going to phone up to check renewal is ok in the next day or so. The customer will say that they are looking to move elsewhere and lo and behold the broker will get the holding, or current insurer, to reduce their price to either match or just beat our price.

BIB has bene around long enough to know this is life and these things happen. But, we have decided now to ask the customer why they are looking. Is it because they want to try and beat their holding broker down or are they seriously going to move their insurance cover? Because, if we don’t get some sort of commitment, why should we waste an hour or so of ours and our insurers time, just to let their existing broker retain them as a client?

We sow the seeds of discontentment to the customer. We explain that whatever we quote their broker will beat, we put that on the table early on. But, we then say that why should they give the broker the chance, because they are doing the brokers job. We let them know quote clearly that we are happy to quote, but we don’t think it is fair that we, and they, are being used bu their lazy and complacent broker.

The good thing is, that in 8 out of 10 cases, we get to keep the business!

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Salon insurance – what should I look out for?

Monday, June 27th, 2011

As an independent business insurance broker, our role is to provide customers, or potential customers, with help and advice about the most suitable policy for them. Customers expect us to be able to sell them a policy that will provide suitable cover for them in years to come.

The difficulty we face and our customers as well, is that we make the best possible effort to provide a suitable policy at the best price. Take salon insurance for example, in an average town, with average sums insured, we would look to quote around £4/£500 per year. Of course, there are variations but overall, this is a good rough idea of the annual premium.

We go to different insurers and always get accidental damage and treatment risk, wherever available, as this is something that you need. It is not legally required, but these are the two biggest insurance threats. What can happen is that the customer who we quote £500 to, says that they have a quote for £400 etc etc. This is the frustrating part, we know full well that our policies and quotes are competitive, for the cover provided. If someone has a cheaper quote then it is more likely than not, that it is lower cover. If we then say to the customer, do you know that you do not have x, y or z cover, they don’t always care. They feel that they have bought a policy from a broker and it will help them out in the event of a loss.

Nothing we say at this quote comparison stage can help. As far as they are concerned, they are being charged 25% more by us.

So, what should you look out for? Make sure you have unlimited shop front glass cover, with lettering included. Treatment cover is a must, as well as accidental damage. Then, make sure you have a reasonable excess, around the £250 or £200 mark. Any higher and you have to question why buy the policy in the first place. As ever, speak to a business insurance broker, and let them decide what is best for you and get the quote in writing, and review it, before you accept the cover.

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Pub insurance – note of financial interests

Saturday, June 25th, 2011

Many publicans lease the buildings they are in from a brewery, or pub group. As part of their rental agreement, the landlord will arrange a commercial building insurance policy, usually for all of the estate, on one policy.

We tend to find that the prices charged are not that competitive compared to an open market quote. I am sure that there are reasons for this, but still struggle to see why it is more expensive to insure in this way. If a brewery goes to one insurer with an estate of 100’s or dozens of pubs, then you would be able to get a good deal.

We can, however, in most cases get better prices for individual pubs than they get on their block policy. Someone, somewhere along the line is earning out of this and it is the publican that has to pay.

But, you can, if you have a sensible landlord, agree to get your own policy but have their financial interest noted. You just get a standard pub insurance policy and add the buildings to it. The insurers, of your policy, then note the beneficial owner of the building is XYZ Limited. This means that if there is a loss, then the insurers know that the payment does not necessarily go to the publican (you) as you do not have a financial interest in the building. This way the landlord is protected because their asset is insured and hopefully you have a much more competitive premium to pay.

The only concern for the landlord is that you may cancel the policy and not tell them. Then if there is a claim, they do not get paid. But, their interest can be noted and they can be told of any default immediately and they will be given notice, say 14 days, to either pay the shortfall in premium or to arrange their own cover.

As ever, speak to a business insurance broker, that is independent, and they can sort this out for you.

Posted in business building insurance, business buildings insurance, pub insurance | Comments Off

Pub, hotel or restaurant insurance?

Friday, June 24th, 2011

After a relative lull in new business insurance enquiries for pubs and licensed trade businesses, we are slowly starting to see an increase in 2011. I do not think we are ever going to get back to the same activity levels as 2007 when the UK banks seemed to be throwing money at new business, leisure related, ventures. Unfortunately for many, the banks were foolish in what they did and businesses were saddled with more debt than they should have had. We all know the rest of the story, but thankfully we can last see a glint of light at the end of the tunnel.

With the new enquiries we are getting through, we are tending to see a small change, we do not necessarily get a distinct pub insurance quote enquiry. Many of these businesses are not just pubs, but maybe have letting rooms and/or a restaurant.

As far as the insurance rating is concerned, for identical sums insured there would be a small difference for each of the trades. This of course depends on which insurer you go to, but the question is how do you get the best quote? If you use one of the online providers, you will find it very difficult to pick a mixed use category. Do not be tempted to pick pub or hotel or restaurant or takeaway. What you do not want to do is take the wrong option and be faced with a claim that is turned down because the insurers say that you forgot to tell them that you were a restaurant with takeaway.

Firstly, you need to get a rough idea of how much of your turnover relates to which particular activity. For example, if you are a pub, with letting rooms, and you earn 60% of your turnover from the pub, then you will do this on a pub policy.

Secondly, you need to speak to an independent broker and let them look around the market for you to get the best possible price, for your exact business description, with the widest possible cover.

Posted in business insurance, pub insurance, pub insurance quote | Comments Off

Unoccupied pub insurance

Thursday, June 23rd, 2011

Everyone loves a bargain. It is a big difference though between saving a few pounds on something in the high street compared to taking a financial gamble in the fickle UK property market.

As a major business insurance broker, dealing with thousands of customers on an annual basis, we see which parts of the UK economy have suffered more than most. Nearly every quarter of industry has suffered, even now, in 2011, I am struggling to think of one industry that did well out of the recession. But, the leisure and building industries seem to have been hardest hit. The number of empty pubs, restaurants and takeaways throughout the land are still increasing.

The bargains we talk about are people that look to buy up empty properties and get planning permission to convert to other use, normally residential. If you are buying a pub, you are probably getting some sort of funding and will have a need for unoccupied building insurance.

Unoccupied pubs are an extremely difficult type of business to place. We have an ever decreasing number of markets available to us and can only get quotes if you comply or meet the following demands.

1) The pub needs to have been empty for less than three years.

2) You need to have definite plans in place for the future use of the building.

3) If you are looking to convert to residential use, you need to have planning permission in place and the work has to start within 60 days.

Any other type of unoccupied property is pretty easy to get a quote for, it is just that pubs are the ones that suffer the most losses. The best thing to do is to give us a call to discuss what you need and we can tell you there and then whether we can help you or not.

Posted in business insurance, unoccupied building insurance, unoccupied buildings insurance, unoccupied commercial building insurance, unoccupied property insurance, unoccupied pub insurance | Comments Off

Warehouse insurance – getting the best deal

Tuesday, June 21st, 2011

After a few years of recession, 2011 seems to be the year of price increases. Forgetting fuel, everything is on the up from food, to travel, to clothing and your business insurance.

But, there is a slight problem in that certain insurers are still operating a double pricing philosophy. This means that they price to get new business in and subsidise this by increasing the premiums on their existing customers. We, as brokers, can see this so clearly it must be embarassing for the insurers.

Customer A, has a warehouse insurance policy with us. We arrange it via an online provider and this year, they tried to increase the premium by 8%. Now, a 1 or 2% increase is quite acceptable, particularly as insurance premium tax has gone up 1% and most of the sums insured were inde-linked by a few percent. But, to try and increase the premium by one twelfth was a bit too far. We already had a more competitive alternative, as we test the market for every renewal, but wanted to see what the insurer in question would do.

They would not budge and said it was the market rate for that piece of business. So, we just went onto their website, input all the details under a different name for the same postcode and lo and behold came up with a price that was cheaper, just, than last year.

We have moved the business, and the customer remained happy, to a new insurer. But it is frustrating that insurers think they can act this way. We are happy enouhg to increase premiums as long as it is fair, across the market. In theory, we could have offered the 8% and they could have got a quote from another broker cheaper than us. This would have made us look foolish and goes against the grain of everything we have built up over the years.

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Small business insurance – lesser cover?

Monday, June 20th, 2011

If you look at Government statistics for businesses, approximately 97% of trading businesses have a turnover of less than £2,000,000. There are a few variations on this, but the gist is that nearly all businesses are classified as small to medium enterprises. Not that £2m turnover is by any means to be sniffed at, but there has to be some sort of cut off. Even the commercial insurance companies we use tend to have scales of turnover and anything over £2m/£3m has to be rated and categorised differently.

When we go the very bottom of the scale, and looking at small business insurance quotes, the premiums can be as low as £75.00 per year, for a full business package. Now, you may think that at this level of premium, the cover may be woefully low, but in some cases (depending very much on the insurer) the opposite can be true.

We have blogged long and hard in the past about fringe insurers that undercut every price going, only because their cover is so bad, the excesses too high or the terms/conditions/warranties are way too onerous.

But, there are certain insurers that have built special business from home and small business packages for the very small, or micro companies. These tend to be very, very competitive and they can include lots of additional covers, such as legal expenses and goods in transit. They do not charge a lot extra for these because the insurers experience in this particular business area is good, so they price accordingly to try and get more business of the same type.

These policies tend to be very good for the new venture as well, because as all of us know who have started a new business, the costs need to be controlled, very, tightly in the first years.

If you are looking for a quote, best thing to do is to have your financial information to hand and to speak to an independent business insurance broker.

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