Archive for July, 2011

« Older Entries

Business insurance – what is a statement of fact?

Thursday, July 28th, 2011

In the world of business insurance, one of the toughest things is the administrative processes that need to be followed both pre and post quote stage. We will cover the quote stage separately, but once you are on cover what is needed of you?

It used to be, many years ago, that to get from the stage of requesting cover, to the issue of a policy by an insurer, took up to a year. I remember being at a large insurer, dealing mainly with shop, hotel and pub insurance. I started a couple of years before they started the full computerisation process. A policy had to be put together by hand. We would ask a team of typists to put together a policy, usally 50 – 60 pages, form scratch. The time taken for this to be typed, checked, retyped, rechecked etc etc meant that a customer was lucky to get a policy wording within the first policy year.

With computers, over the past 20 odd years, we have moved in leaps and bounds. We can, if required, provide a quote and get a policy issued, via email within about an hour.

The way this is done, is by statement of fact. We do not need proposal forms. What happens is that you provide information, we use that to provide a full written, compliant quote. This is the statement of fact. This is what your cover is based on, in lieu of a proposal form. Aside from the policy documents, this is the most important document that applies to your cover.

Please ensure, that if you have a policy that is on a statement of fact basis, that you are fully aware of all the terms, conditions, excesses and warranties that apply.

Posted in business insurance, statement of fact | Comments Off

Unoccupied property insurance – check the warranties

Monday, July 25th, 2011

There are two types of unoccupied property insurance policy. Firstly, you can get a bespoke policy where you declare at the outset, or start, of the cover that the property is unoccupied, untenanted or vacant. The second option is where you have a standard policy, that covers a building being let or tenanted but, if the property becomes empty, usually for more than 30 days, then additional terms and conditions kick in.

On the first option, it is usually very clear what the terms, conditions, warranties and excesses are, or it should be. The normal option for getting this kind of cover is to go to a business insurance broker. They will look into providing you with a quote, based on the property being annually unoccupied.

At quote stage, under the rules and regulations laid down upon us, we need to explain to you the details of the what is, and what is not covered. Usually, for an annual unoccupied property, you will have to do certain things for the cover to operate. One of the things will be a warranty relating to security, water and inspections. You will normally need to drain the water tanks, or turn off the water if there is no water tank, ensure the property is secured, including closing letterboxes (to prevent arsonists setting fire to materials and then stuffing in the letterbox) and lastly you will need to regularly inspect the property.

These are standard across the market.

The ones you need to watch out for are the standard commercial property owners insurance policies as many of these have their unoccupancy warranties buried deep in the policy wording. It is only if the property becomes empty and you have a loss do you realise that you are not covered.

If you have a let property and for whatever reason it is going to be empty for an extended period, speak to your broker and ask them how this affects your insurance cover.

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

Buy to let insurance

Friday, July 22nd, 2011

If anything has seen a boom and bust in recent years, it is the buy to let insurance market. This has followed the whole buy to let bubble. I remember 25 years ago trying to get my first mortgage and facing many many hurdles. Not only did you have to prove you were a good saver, you had to provide a deposit, around 10%, and have been in permanent employment for a good few years. Then, in the late 1990’s and early 2000’s, UK mortgage companies and banks decided that they would start to offer mortgages, effectively to anyone and everything.

The 100% mortgage was born and it really was not that difficult to get yourself on the hitherto unachievable property ladder. This progresses to the buy to let market, when you could easily get finance on properties that you were going to rent out. All you had to do was say what you thought the rental income would be and this was multiplied to give you a mortgage. You still had to get a deposit, but the fact was that anyone could get two, three, four properties, really with no effort.

On the back of this, as a business insurance broker, we saw a boom in the insurance on the properties. They could not be covered on a traditional home policy and as there was effectively an income being received, even though it was going towards a mortgage, it was a business.

Then, in 2007 and 2008 it all went a bit pear shaped. The banks panicked, the markets panicked and the credit crunch entered everyones vocabulary.

This put the brakes on the whole market. Now, in 2011, we are seeing the market increasing. Landlords are reporting rents increasing in excess of 10% per annum, depending on where you are.

If you are dipping your toe in the water or you are an experienced property owner, then you need to speak to Businsessinsure about your landlords insurance. We have many providers and can cover DSS, Students, Asylum Seeker tenants and unoccupied properties.

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

Commercial Property Owners – information required

Thursday, July 21st, 2011

If you are looking for a commercial property owners insurance quote, there are three main ways to go about this.

Firstly, you can phone an online provider, whether this be a broker or a commercial insurer direct.

Secondly, you can visit one of the many websites that state they will compare costs for you.

Thirdly, you can visit your local broker and obtain a quotation face to face.

In addition to these three, there are many different smaller methods such as your bank or mortgage company providing you with a quote.

Whichever of the options that you choose to follow, there will be a differing set of questions asked of you. The reason for this is that ultimately it will be a business insurance company that will provide you with the quote. The different companies all want slightly differing information, depending on their underwriting and risk acceptance criteria.

The main question though, for commercial, industrial or business building insurance is the rebuilding cost. This is the amount of money it would cost, at the inception or start of the policy, to rebuild the property in the event of a catastrophic loss. This is the type of loss, such as fire, where the whole building needs to be reconstructed. This cost, which will ultimately be your sum insured, if you take out a policy. Needs to include the following:-

1) The cost of clearing the site, including demolition of any remaining structure.

2) The cost of rebuilidng any underground, or below ground, foundations. These are normally not destroyed in a fire, but will need replacing.

3) All architects, surveyors, legal, regulatory and professional fees in rebuilding.

This is where you need to make sure that the cost is sufficient. It is not correct to base the rebuilding cost purely on the purchase price or the market value.

The best way is to get a professional valuation, by an approved building valuation surveyor. Althought there is a cost involved, at least you have a yardstick to base your policy on. If there are any problems regarding the sum insured, you will then have comeback on the surveyor.

Posted in business insurance, commercial building insurance, commercial property insurance, commercial property insurance quote, commercial property owners insurance | Comments Off

Referral Fees – will they become obsolete or even illegal?

Monday, July 18th, 2011

We have blogged before about certain insurers deciding that they will have no part of the referral fee food chain. In the main it is the insurers that have high percentage of motor business, but it also affects the commercial insurance industry.

In case you are in the dark, if you have an accident, in your car, your insurers will more than likely sell your name and contact details (yes, amazingly it is legal) to solicitors. The solicitors contact you to pursue a claim in your behalf against the third parties insurers.

Now, we have all seen the adverts that offer to help the poor member of the public that has been injured. Unfortunately, many of these solicitors charge over 50% of the ultimate settlement costs. This is not from you but from the 3rd party insurers. So, you might £10,000 for a broken arm and banged head, but the solicitors that deal with this for you will get around the same in fees. This is how they can afford to pay £100’s in referral fees.

The food chain is long and between the 3rd paty insurers and you, there are many different parties all taking their cut, at very, very high rates. This has to be paid for somehow and it is the customers that contribute through increased premiums.

The insurers are then looked upon as the villains of the piece, because everyone moans about increased insurance premiums. They are the partial villains, because without them selling your details, there would not be so many claims. Of course the solicitors and other third parties in the chain do not help and can be equally accused of villany. The fact that Jack Straw and David Cameron have been involved, even if just to give soundbites, means that this story will run and run.

Fingers crossed that they are deemed to be illegal as they do nto help the people who matter, the claimants. As a business insurance broker, we are regularly asked that we do not sell peoples details on to others, we do not do this, never have and never will, how the insurers are allowed to do this defeats me.

Posted in business insurance, commercial insurance | Comments Off

Product liability insurance – exports to North America

Wednesday, July 13th, 2011

Over the past few years in the UK we have seen a substantial growth in the no win no fee solicitor industry. It is not strictly like this, as most claimants have to buy a policy to protect them if they fail in their claim.

I have not met a solicitor yet who will admit it, but the vast majority of their earnings come from the smaller claims, which the commercial insurance companies are more than happy to settle, without going to court. These are usually sub £10,000. The claimant gets roughly, and sometimes less than, half the total claims cost and the solicitors usually get the lions share. Once you go beyond a certain monetary figure, the insurers decide that they will fight the case and this is where the solicitors start to waiver, ever so slightly.

Whilst the skeleton of the claim they are making, on a claimants behalf, is more than likely to be genuine, it is the way it is spun out and made to be worse than it is, that is having an effect on our industry. But that is another blog point entirely.

This one is about products liability insurance and extending cover for exports to North America and Canada. If you are making widgets and decide to export to the United States or Canada, the chances are your current business insurance policy will exclude cover for this.

If your insurers are happy to do this, you will find that the cost of your insurance will rocket skywards. It may well be that your current insurers do not want the business as many simply do not have the skills or capabilities to deal with this type of cover.

Why is this? Thinking about the scenarios above, a £10,000 claim might be if an employee injures themselves and is off work for a few weeks. There does not have to be broken bones or hospital stays for there to be a multi-thousand pound claim. A similar claim in the US under workmens compensation (the US equivalent of employers liability insurance) would be 6 to 10 times higher.

This typically applies to all liability claims. So, if your widget damages someones business property here, due to faulty manufacture for example, the claim will be 6 to 10 times less than if the damage was caused in the US and the claim was pursued through the US courts.

Posted in commercial insurance, products liability insurance | No Comments »

Salon insurance – getting the best quote

Tuesday, July 12th, 2011

Whilst no-one would ever say surviving in business these past three or four years has been easy, those that are still around have learned many, many lessons. Parts of the retail industry have been absolutely slaughtered. Think of the big name retailers that have suffered, disappeared or reduced their floor space. There are too many too mention here, but it has helped some of the smaller retailers. How? Because some of the larger companies that have gone were simply undercutting anyone and everything, because they simply added to their ever increasing debt mountain. They were hoping that they would see the recession out, but many were in trouble way back in the good times five or six years ago.

As a business insurance broker, we can see how well parts of industry are doing by the amount of new business we see.  A broker gets two types of new business. An existing company that is moving from one broker to another and the brand new, never before traded business. It is the brand new ones that are the measure of what sort of health a particular industry is in.

We are starting to see more and more enquiries for new salon insurance in 2011 than we saw through the whole of 2009, and we are only at July. Part of the process of setting up your new business is that you will need to arrange a suitable policy to protect your business, it’s assets and it’s liabilities. Now, setting up is never easy and never cheap. You do not want to pare costs to the bone at the expense of quality, and the same applies to any commercial insurance policy you decide to take out. You do not necessarily have to have bad, or lesser, cover in order to save money. Speak to a broker and let them look around for you, do not, whatever you do, simply go direct to a one insurer company, they cannot offer you any choice, so how do you know you are getting a good deal?

Posted in commercial insurance, salon insurance | Comments Off

Commercial insurance companies, the good, the bad and the downright useless

Tuesday, July 12th, 2011

As a business insurance broker, we act for you, the client. Although we are agents of the insurers we deal with, our role is to get customers, new and existing, the best deal we can, for the best price. In a way, this is no more than you would expect from every business you purchase a service from. To get the cheapest, but also the best.

Anyone who has read our previous blogs will know that we get a bit frustrated when we have quoted a perfectly good, wide ranging, insurance policy and our potential customer says they have a had a quote for less, from an insurer that we have never heard of. Or worse still, it is from an insurer that is notorious for not paying out on claims, or if they do, it takes months and months to get settled.

Whilst we cannot say to the customer that Insurer A is, in our opinion not worth insuring with (because we could face a libel or slander case) we try to explain to them that Insurers B or C may be a better option. But, insurer B or C is more expensive and all the customer looks for at that early stage is the cheapest price.

The shop window for business insurance is when a claim occurs. This is when you want the policy to protect you or your business. Unfortunately though, there are certain insurers that offer policies with so many terms, conditions, warranties and high excesses that it is not worth buying.

At the end of the day, you have to realise that, as with many things in life you only get what you pay for. Sometimes an insurance policy can be just a bit too cheap. Speaking to or dealing with an independent broker should protect you.

Posted in business insurance, business insurance advice | Comments Off

Takeaway insurance – getting a good quote

Monday, July 11th, 2011

Takeaway insurance has always been a product that insurers either like, and actively target, or do not want and overcharge, in the hope that they do not pick up any business.

The same can be said of most types of policy, but takeaways tend to have quite big differences in the range of premiums quoted. If we look at commercial property owners insurance, we could get a dozen or so quotes, for the same building, from different insurers. The premiums could range from £800 to £900. The prices tend to be very, very similar.

Whereas for takeaways, insurers that want the business will quote, for example £750 and the premiums from the insurers that really do not want the business will go up to the £2-£3,000 mark. This is just to show that the differentials are much more marked.

This is where you need a business insurance broker to find the best quote for you. Do not go direct as all you will get is the one price from the one insurer. As a broker, our role is to provide a service to you, the ultimate policy purchaser. Initially, that service is only providing a quotation. However, we have make sure that we are doing the right thing and offering you the best policy we can get at the most competitive price. It may well be that a cheaper quote offers lesser cover, or higher excesses, but we need to point this out to you.

Again, if you go direct, how do you know you are getting the best price and the best cover? Quite simply, you do not. To answer the blog question, the key to getting a good quote is to go to a good broker. A good broker for takeaway insurance is one that has a number of different insurers available to provide these types of policies. When getting a quote, why not ask them how many different insurers they will approach on your behalf? If it is one or two, then this is not enough, five or six and you at least know that you are going to have the market covered.

Posted in business insurance broker, takeaway insurance | Comments Off

Unoccupied building insurance – instantly?

Friday, July 8th, 2011

While the UK property market is still extremely sluggish, there are still bargains to be had. But they tend to only be accessible to those who are either cash buyers or can put down a serious deposit. We are seeing a big increase in customers looking for unoccupied building insurance, as this is usually a requirement of any funding. Even the cash buyers are sensible enough to get cover for their new asset.

If you are looking to buy a building for £200,000 and are putting down 20%, then the bank or finance house will be lending, give or take £160,000. They want insurance in place not just for this amount, but for the full rebuilding cost.

Given how badly the banks have behaved over the past ten years, they are now even more particular about making sure that any asset you purchase, that they are lending money for, is insured correctly.

Usually, purchases take place on a Friday. It has always been the traditional day to move house, purely because of it’s proximity to the weekend. This is the day when we find the most policies are sold, usually at the last minute. If it is a business purchase, then it is not always clear what insurance cover the bank needs, they are not renowned for letting you know early. We normally get calls from customers early on a Friday saying not only do they need cover, but they need to prove it is in force and have the banks financial interest noted.

In reality, how easy is it to get unoccupied building insurance, in an instant? To tell the truth, it has never been easier. BIB had a call last night, after 5pm from an existing customer who had just found out they were to exchange and complete on the same day. To do this, they had to ensure the bank had in their possession policy documents, as noted above, before a penny would be transferred.

The good thing is, that with the internet we were able to get a quote, £850 for an empty residential house at a sum insured of £450,000, go on cover and email the whole policy document in pdf format, within 15 minutes. The fall out of course is that they have to pay for it, but their business account manager will have this document sitting in their in box for 9am. Think back 10 years and this would not have been possible.

If you are stuck and need cover quick, call us and we’ll do our level best to help you. As an independent business insurance broker, we have access to many different markets to get you the best price possible.

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

« Older Entries