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Archive for August, 2011

Alternative business insurance quotes – like for like cover?

Wednesday, August 31st, 2011

Every single UK business insurance broker is under an obligation to treat their customers fairly. We simply cannot recommend product A when we have product B and C available which are more suited. This stands to reason and to many is quite obvious.

It is easy though when the distinction between products is easy. For example, if I offered an office insurance quote with company A at £500, with a £1,000 excess for damage to contents, but also had a quote from company B for £525 with a £250 excess then company B is the one we quote. It is easy for us to see what the differences are. We also know which companies have better reputations for paying claims as well. We cannot say to a customer that company A is notorious for paying claims because we will face a libel or slander claim. It is up to us to decide who we offer.

Although it is easy for us to see the differences, it is not always so easy for the customer. We have spent years advocating the need for quick, easy, competitive quotes, but on a wide cover basis. It is what we do and we do it very, very well. However, over recent years there has been a growth in online business insurance comparison websites. These sites sell on price, price, price. Nothing more and nothing less. When we quote a customer, for example, £3,000 for their annual premium after having undertaken a fair comparison of the market and a fact find for their business, they sometimes get an alternative.

We send a quote and then get an email back saying, I have had a quote for £2,500, what can you do? What we can do is to ask for a copy of the quote. We are not in the market to just undercut everyone else. We know the ballpark and we always quote near the bottom price range, but making sure that cover is sufficient. If the customer sends us the alternative you can get your bottom dollar that there is a reason it is £500 cheaper.

It can be difficult for the customer though to fork out £500 every year for wider cover. These websites tempt them into buying and then, when there is a loss the customer does not have a leg to stand on.

So what are we saying? The old adage applies, if it is too good to be true (the price) then there is a reason for it. Take your time and get an independent business insurance broker to review any quotes you have had.

Posted in business insurance, compare business insurance | Comments Off

Professional Indemnity Insurance – which limit to choose?

Friday, August 26th, 2011

Professional indemnity insurance is, along with all types of insurance, something that people do not really want to buy nor do they really want to use it. But, if they do need to use it, they want it to operate fully to cover their claim.

This means, when we get a new quote request, and we ask the customer what limit of indemnity do they need, we get one of, or a combination of these three responses:-

1) What is the minimum limit you can sell me?

2) I need a limit of £x under either the terms of a contract or because their professional body requires cover to be in force.

3) What do you suggest?

We never answer question 1 without addressing question 3. The minimum we can usually quote is £100,000, but this will be inadequate for most businesses in 2011. We then discuss with the client about, in the worst possible scenario, what could they face as a single claim. Following this we will usually quote three or four different limits so that they can see the differences, in premium, are not that great when you go from £250k, to £500k, to £1m to £2m.

If they ask for a standard limit due to a contract or membership of a professional body, we will ask if this is still sufficient. Being part of a professional body, with them asking for a limit is usually at a sensible limit. This is because the professional body knows what type of claims to expect. As an example, as a business insurance broker we have to have in force £2,000,000 worth of cover, in respect of each and every claim.

The problems occur when they are entering into a contract which does not state a limit, this is where they may be tempted to take the lower limit. It is of course up to the customer to choose, we can only recommend. But, if they are choosing a limit which we feel is inadequate, we will tell them this and give them the option of a higher limit. The difficulty is that the customer can sometimes perceive this as Businessinsure flogging them a limit that they do not need, so we can earn more money. That, however, is the brokers dilemma though, We have to give good quality professional advice, but the customers want it on the cheap.

Posted in business insurance, business insurance broker, professional indemnity insurance, professional indemnity insurance quote | Comments Off

Landlord insurance policies – loss of rental income

Thursday, August 25th, 2011

A landlord insurance policy, like every other policy, can be broken down into different parts. You get the buildings, the fixed glass and sanitaryware (baths, sinks and toilets), contents, property owners liability and loss of rental income. A few polices will offer forms of legal expenses and eviction of squatters and tenants cover.

Many insurers simply provide loss of rental income at a set sum insured, usually as a percentage of the building sum insured. The usual amount is 20%. This does not mean that you get 20%, but as long as your rental income falls within this figure, you have adequate cover.

You will need to prove the rental income that you have recently received and also how much rental income is detailed on your tenancy agreement. Usually this will be a six month assured short hold tenancy agreement.

It is more than likely that you will get a quote from an independent property or business insurance broker, such as Businessinsure. If you go through a broker, they really should offer you the best contract for the best price, from the providers available to them. This does not mean that they offer you a whole of market quote, because they may simply not have agencies with company d, e and f, whereas they do with companies a, b, c, g, h and i.

Check that your loss of rental income cover is firstly included and secondly that it provides cover for when the premsies are uninhabitable and partly uninhabitable.

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

Online business insurance quotes – where is the service?

Wednesday, August 24th, 2011

We were competing this week for a fairly large commercial property owners insurance quote. For this one customer we arrange a few different policies but this was the one risk we hadn’t picked up. They arranged it through one of the online comparison sites.

It was due on the 20th August and as at 3 pm on the day before they had still not had terms for their renewal. We had already quoted, but based on last years non-index linked sums insured. As we wanted to quote on a like for like basis we advised them to demand a 7 day extension, at nil cost, due to the delays in getting renewal terms. They told me that the same thing had happened last year. They got their renewal terms mid afternoon of the day before renewal and just renewed it.

We waited for their existing provider to come back with terms, quoted on a like for like basis and picked up the risk. We were quoting blind and went in at a better premium than they paid last year. Their existing provider did the usual and offered to beat our quote but thankfully the customer realised that the service difference was too great to enter an auction process to get the premium lower and lower.

Now, we have blogged before about the inability to get advice from the sites that allege to compare business insurance. They are not, all they are doing is comparing prices. They don’t rank their quotes according to breadth or depth of cover nor do they rate them according to service standards.

So, customers are simply roped in to buying the cheapest policy possible. Then they realise a year later when they don’t get renewal terms or worse, their policy cover is not quite as good as they thought, that they should perhaps have gone elsewhere in the first place.

I am sure if they were given the opportunity to respond they would say it was a one off and overall their customers are satisfied, but as a business insurance broker we see these too often I’m afraid. As an industry, the independents like us survive by offering exceptional customer service, but we tend to get tarred with the same brush and it is not right.

Posted in business insurance, compare business insurance, compare business insurance quotes, online business insurance, online business insurance quote | Comments Off

The banking crisis and business insurance.

Monday, August 22nd, 2011

It is easy, and mainly correct, to lay much of the blame for the past three years at the doors of not only the banking industry as a whole but all types of market speculators. Anyone can stick money in the bank and earn interest. Savers have had a rough ride in that interest rates have been low or non-existent.

Going back to 2006/7 you could get a healthy 5% from some accounts, even with just a few hundred pounds in. But, when we are talking bigger fish, the banks and the speculators, this was not enough. They were looking for returns of 10, 15 and 20% plus, year on year. The bankers just got their fingers burned by lending more and more of the money they did not have on more and more riskier debt. They were getting double digit returns on their money, without too much trouble. Everyone knows of someone that bought a flat/house/commercial property for x and who sold it for x plus 25% within a couple of years.

Unfortunately in a growing economy this is what happens. Gordon Brown and his famous, failed promise to stop the boom and bust economy was not only a dreamer, but wrong. The world needs fast growth and sometimes, every few years, without fail, for one reason or another, something causes the market to collapse.

We cannot and will never get away from this. Indeed it would be detrimental to the world economy if too much was focused on stopping this. Within the next 30-40 years we will have another catastrophic world recession. We don’t know when or why, but it will happen.

At the moment we are seeing the world teetering on a double-dip recession. The liberal governments borrowed heavily, correctly, to get their respective countries out of the mess they were in. What they did not do was put the pain in place to pay back the borrowing. In particular the UK and US were proud to say how much they were throwing at their economies through quantitative easing. What they did not do, but not to the extent of Greece, Eire and Portugal, was to put in place a robust system to pay down the debt.

So, 2011 is causing problems again, and business insurance is suffering as well. The issue we will face is over the next few weeks and months is that the insurers slumped share prices will filter through to the various divisions to make more money. This will result in even more increased premiums.

Hope, and help, is at hand though. If you are finding that your existing insurers have increased your premiums, give Businessinsure, a 100% independent business insurance broker a call to see what we can do for you.

Posted in business insurance | Comments Off

Getting a cheap business insurance quote

Saturday, August 20th, 2011

In business, as in life in general, you really only get what you pay for. This is why when people ask us for a cheap business insurance quote, we usually go back with a couple of options. One that really is cheap and one that is competitive, but provides the cover they need.

As a business insurance broker we would be failing if we offered people super cheap quotes, but then for example hid in the small print that they have a £2,500 excess. If you look long and hard enough you can always find a cheaper quote. If you have the time you can end up playing one broker against another against a direct insurer and so on. But, your cheap policy may not provide the cover you need, it may have onerous or unfavourable terms or conditions and ultimately the service may be very poor.

An insurance policy is strange, in that it is something that you know you need, but don’ want to ever have to use. As you don’t ever want to use it, you don’t really enjoy paying for it. But, with more and more claims being submitted, for varying reasons from increased crime, due to the recession, increased flooding, due to the changing climate and increased water damage, due to the terrible winters we have just had in the UK, now is the time to get yourself a policy.

You don’t need to search for a cheap quote, any business insurance broker worth their salt can get you a decent enough quote, if you have been claims free or not made many claims in the past three or five years. Some brokers are complacent though. They think they can just offer you the same insurer, year in year out, with an increase being applied at every renewal.

If this is the case, you really should make the effort to look for an alternative in 2011.

Posted in business insurance, business insurance advice, business insurance broker, cheap business insurance | Comments Off

Commercial combined insurance – excesses and franchises

Friday, August 19th, 2011

A long time ago, commercial insurance policies could either have an excess or a franchise applied.

The level of excess is important as you, the insured, have to pay this for each and every claim. If you have an excess level of £250, at the simplest level a claim of £251, will result in you getting a cheque for £1 and a claim for £251,000 will result in a cheque for £250,750. The excess does not increase depending on the level of the claim. It is there to discourage minor claims being submitted which, quite simply, are not cost effective for the insurers to deal with.

A franchise is a level, or amount, below which you the insured agree to bear the cost of all losses. A franchise operating, can be distinguished from an excess as for all losses up to the amount of the franchise, they operate in the same way as an excess. You pay the £250 using the above scenario.

If your claim exceeds the amount of the franchise, then the insurer pays the whole amount. They used to be common for many types of business insurance, and where usually for a higher amount. The insured became and was happy to be, their own insurer for all claims up to a certain amount. For example, £1,000 or £2,500 would be more realistic. The insured would get a discount, but not quite as much as if the excess levels were this amount.

You still find franchises used, instead of excesses, but for larger cases and marine insurance.

We have been asked to quote for a number of warehouse insurance type policies in the last few weeks and we have noticed that one of the UK’s major insurers have increased their standard excess levels from the normal £250 to £350-£500. Now, that may not seem much but for some businesses that have a few claims having to foot the bill for £500 of each and every loss can be tough.

If your policy is due for renewal and you have an increased excess your broker must tell you this. If they haven’t managed to get an alternative, give Businessinsure a call and see what we can do for you.

Posted in business insurance, warehouse insurance | Comments Off

Employers Laibility Insurance – Contributory Negligence

Thursday, August 18th, 2011

Employers liability insurance is one of the few legally required covers in the UK. It is also very heavily regulated, in that insurers are not able to put in onerous exclusions, warranties or restrictions.

At it’s most basic level, if you have an employee and they are injured and you have been proven negligent, you will, as an employer, be liable. If your employee, or ex employee, appoints a solicitor you can expect a claim to be in excess of £10,000 even for the most basic of injuries. We have one claim on the go, where an employee fell of the third rung of a ladder, which is sitting at £107,000 estimate. The employee borrowed the ladder from a customer which was strictly against their training, but the claim still stands.

We have another where an employee, to try and get their work completed quickly, stuck tape over the safety switch for a machine that cut paper and lost 3 fingers. Without the employee doing this, the injury would not have occurred. That one is just over £750,000.

With these two claims, the employee contributed to the claim. You would think that this would result in either the claim being turned down or reduced significantly. But, we said it is subject to strict regulation and the claims simply proceed. The insurers estimate that the claims may be reduced by between 3 and 5% because of the employee contributing 100% to the injury.

If you are trading without business insurance cover, you really do need to get something sorted out, soon. Whilst you never would expect to have a claim, you would be surprised at what it can do to your businesses survival prospects if you have decent insurance behind you.

If you need a quote, speak to an independent business or commercial insurance broker and at least be aware of the costs that you would expect to pay.

Posted in business insurance, commercial insurance, employers liability insurance | Comments Off

Shop insurance – you can still save money

Wednesday, August 17th, 2011

After nearly ten years of gradual reduction in commercial insurance premiums, we are starting to see an overall increase from most of the insurers we deal with.

In real terms, premiums have decreased since 2002 across the board. The decreases are not huge, but when you add in the effects that inflation should have had, you can maybe see why insurers are starting to see their balance sheets not looking so rosy. Basic economics comes into play and if the insurers are paying out more than they can afford then it stands to reason that they need to do one of, or a combination of two things. They need to increase their premiums, to cover their losses, and consider exiting markets where they have not been able to make money.

I used to work for one of the largest UK insurers that has since been swallowed up into the Aviva brand. They used to be one of the biggest insurers of coaches. It brought in many millions of pounds very year but the claims cost were more than the premiums and they were increasing. When the senior management decided to withdraw from the market entirely, on profitability terms, there was uproar from some of the managers. They saw a chunk of their branch income disappear. What they didn’t realise was that the overall profitability of the group was going to improve and in time, this would allow them to enter newer, more profitable markets. It was shortsighted but at the time insurers had branch networks which were more powerful than the executive team. Eventually they towed the line but it was a hard task.

We are seeing this with some of our underwriters in relation to shop insurance. Many have tried to grow market share by offering too cheap premiums and picking up un-profitable risks. Now they are getting to the stage of either exiting markets or pushing premiums up by double digit increases.

There is light at the end of the tunnel though, if you are profitable, as far as the insurance risk is concerned, a good quality business insurance broker will be able to find you an alternative, if your current provider is looking to apply a broad brush approach to all their customers renewal premiums.

Posted in shop insurance | Comments Off

Internet retailers insurance

Tuesday, August 16th, 2011

You may be surprised to know that there is not a commercial insurance company in the UK that has a bespoke, suitable, product for internet retailers.

Most of them will either cover this on a retail or shop policy, or a commercial combined insurance package. There are even some main stream, big brand, insurers that do not even provide cover for internet retailers. They are not even able to give one concrete, solid reason for why they do not want to provide cover. Some of their staff think that it poses an increased business interruption risk and others tell us that the stock is at an increased risk of theft.

As things stand, as we go through the second half of 2011, we have to work with the tools we have available. We can provide cover for you, but we ask and work with insurers to get these risks quoted on their retail or shop package policies. The reason being that these policies are packages and contain various covers which are suited to different trades. Therefore you can get cover for stock, contents, portable equipment ie laptops and smartphones, business interruption, goods in transit and the various liability covers.

We just need to make sure that the insurer is fully aware of all aspects of the trade that you are undertaking. One of the key points to consider for internet retail insurance is that your stock is more than likely to be held elsewhere, instead of at your home address.

Many businesses start from home and grow, as they grow they run out of space and it is now the norm to take a small storage unit at a different address. You need to make sure that your policy covers you at not only your home, but also your secondary business address, if there is one.

The best way to get this type of policy, and be confident that it provides you with what you need as far as cover is concerned, is to speak to a business insurance broker. Please do not try to get this sorted out online because the chances are that you will not get a confirmed quote as soon as you declare there are two different risk addresses and neither of them is a shop.

Posted in business insurance, internet retailers insurance, shop insurance, shop insurance quote | Comments Off