In recent years, more than most, we have been faced with unprecedented pressure from our business insurance customers to get costs reduced, year in year out. Selling a policy renewal with an increase on the premium has been harder and harder. We do understand though and if an insurer decides to increase a premium beyond what we think is reasonable, we will look to move to a different provider.

At every renewal we look around for the majority of customers to test two things. Firstly, that the renewal offered by the current insurer still offers a competitive price compared to the competition. And secondly, that their existing provider is still offering a competitive price compared to their new business offering.

We have blogged long and hard about the compare business insurance websites that gain new customers purely through offering a cheap price. The way they can do this is to gradually step up the prices in consecutive renewal years to make up for this initial under-pricing. There is also the distinct possibility that because the price is cheap, so is the cover. The reason we check a current insurers new business offer compared to a renewal is to ensure that the customer is still getting a good price.

The competitive pressures in recent years have meant that insurers will absolutely bend over backwards in order to provide a cheaper renewal, but only if we go back to them and ask. We have to seek the alternatives and then say we have got a better price before they will reduce.

We will blog at a later date about why the commercial insurance companies are having to increase their premiums. In this post though we will talk about the two reasons why prices are increasing that are nothing to do with insurers profitability.

The first is insurance premium tax. The rate has increased from 5% to 6%. Although it is only 1%, you really should accept and factor this in to your renewal premium. This money goes straight to UK plc  with the government collecting it from the insurers. The good point is that it is quote a low rate compared to most of our European cousins.

The second point is that sums insured for buildings, contents and stock need to have inflation factors built in. Forget the Bank of England’s monetary committee and its 0% rates. Rebuilding costs and replacement costs for contents and stock are increasing, even if property prices continue to stagnate and/or fall.

We have blogged in the past about the possibility that the current UK coalition government would consider a full or partial ban of referral fees. The effects on primarily motor, but also business insurance are more significant than you would believe.

I am 43 years old and passed my driving test 25 years ago. In all those years, I have had a few motor accidents. Unsurprisingly to those that know me, they have all been my fault in one way or another. The first accident, when I was about 19, was  simple shunt. I pulled out of a junction too quickly and nipped the end of the car that had passed by. I had a sore neck and caused a few hundred pounds worth of damage. The claim was settled and I paid my excess and no claims bonus was adjusted.

A few years ago a similar thing happened. My fault, very slight damage to a car in front. This time, although it was my fault I received phone calls, both mobile and home, and numerous texts from solicitors looking to pursue a personal injury claim against the other party.

Now, I am a business insurance broker, we do not get involved in private motor at all. I was not aware of how far down the line the industry had progressed. My insurers earned a fee by selling my name and details to a third party ambulance chasing solicitor. I did nothing and eventually, after a few months, the calls stopped. It made me wonder exactly how much money was changing hands and whether this was because of additional work or not?

At the end of the day, the answer is not. If I wanted to pursue a claim against the third party, I would see a solicitor. I do not need my insurers to earn a few hundred pounds flogging my details. This affects motor and commercial insurance. The reason being that insurers are having to plug the gaps in the P & L accounts from hugely inflated motor insurance claims. They do this by increasing everyone’s premiums. When the motor market cannot take any more, they start to increase their other accounts as well.

The ABI have quite rightly said that the ban needs to be watertight. If you ban referral fees, you need to do two things. Firstly, ensure that they are all banned, not just certain types and secondly, introduce measures that can penalise companies that decide to flout any ban.

The proof, as ever, is in the pudding. Lets see how strong the government are going to be.

If you think back 20 years ago, having a mobile phone was a rarity. Go back 15 years and the big thing was a PDA or personal digital assistant. I remember seeing people using their PDA’s and thinking what a great idea, compared to the filofax. Then in the past ten years we have seen an explosion is electronic gadgets. Mobile phones are now available to all and most combined PDA type software. Then there are the other gadgets, such as ipads, laptops and netbooks.

And what do they all have in common? We take them everywhere. Companies are dishing them out like sweeties to all their staff because, everybody wants one of these gadgets. Of course we do not need them, but we have to have them. A simple £2.99 pocket diary will suffice for most people, and they do not need charging. But, nearly every type of business will have a few grands worth of equipment that needs to be insured correctly.

You need to check that your business insurance policy covers this equipment if your staff take this out the building. The chances are that they are going to need UK cover at the very least. Most though will need cover outside of the UK, possibly worldwide. It used to be just the ladies and gents on business that had laptops, but my holiday in Menorca this year was in a hotel with a wi-fi hotspot. I can almost guarantee that if you walked past it in daylight hours there would be at least half a dozen people tapping into some sort of device. Now, of course many of these are owned personally and already covered. But a lot of businesses buy these bits of kit in the full knowledge that their staff will use for personal as well as business. It is a perk. But it is a perk that needs to be insured.

Speak to your business insurance broker to make sure that you have adequate cover.

Businessinsure are looking to develop the next phase of our website. Standing still is not something that you can really get away with in this day and age. But, this has to be balanced with having a website that people actually find useful.

Anyone who has been involved in SEO activities for their website will contiually be amazed at the qulaity, or lack of, for some of the sites that pop up in the top ten on Google. We have given up trying to fight this. I am sure the search engines are doing their very best to stop this happening but when you have companies that have budgets in the hundreds of thousands of pounds just to get their site on page 1, our chances of getting there are very small.

But, we continue to review our website not with the intention of getting to number 1, but of being found by people that are looking for real business insurance advice.

So, for one day only we are opening up a blog with comments. We blocked these at the end of 2010 because, for every blog post we were getting approximately 50 spam posts. We simply could not dedicate the time to filtering out the crap and responding to the real responders. As we have a local rate telephone number we know that people will call us if they need to discuss anything.

So, the comments we are looking for are whether we need to have a more detailed business insurance quotation enquiry screen. We have deliberately kept this light over the years, with the intention of customers being able to put in enough information for us to be able to contact them to discuss a quote.

If you think about commercial property owners insurance. We really only need about 8 questions answered in order to get a fully compliant quote issued. But, for commercial combined insurance we need anything from 15 to 35 questions, depending on the particular trade.

So, if you have any thoughts on this blog, please let us know.