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Archive for October, 2011

Business insurance quotes – buying remotely and the 14 day rule

Saturday, October 15th, 2011

Anyone who has ever had the misfortune to have a pushy salesperson in their home, flogging them something that they do not need, will be pleased the law is now on their side. You are allowed to cancel these contracts within certain timescales.

As far as business insurance is concerned, there is a period of 14 days during which you can, if you decide, ask for the policy to be treated as null and void, or cancelled from inception. This applies particularly to policies bought over the phone or the internet. The idea being that if you have not had a chance to fully review the contract, before purchase, that you then get a full 14 days to sit down and review this yourself.

There ae customers, very occassionally, who you know are only purchasing a policy to satisfy some legal requirement. They are only taking it out to get the documentation in the full knowledge that they are going to cancel, and demand back all of their monies (if paid). You could technically go on doing this for a while, but eventually a liability claim could turn up on your doorstep and you have no cover whatsoever.

If you are looking for a good quality, competitively priced restaurant insurance policy, for example, then you just need to give Businessinsure a call. There is no need to take out policies and then cancel them straight away because we are confident that the premiums we quote are at such a level as to allow you to keep the policy for the whole year.

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Businessinsure

Friday, October 14th, 2011

Nearly every business can look back at when they first started and look at some good, and bad points, about their “birth” date. We have seen around the world the Blackberry/Research in Motion messenger system grinding to a complete halt. In the same week, one of Blackberries competitors in this field, Apple, launched their own, updated, version of this. Apple may look back in a few years time and find that this was the perfect week for launching/promoting this side of their business. They will have planned this for months and months and the dates probably changed a number of times. Then, completely out of the blue something happens which catapults them right into the media spotlight. Very few of the news stories about Blackberries woes did not mention that Apple were launching their rival service in exactly the same week. Apple gets good, free, publicity anyway, but this is the stuff of the ad departments dreams. We are not saying that all Blackberry users are going to jump ship, but I can guarantee you that more people signed up to Apples IM service than Blackberry.

When Businessinsure started, the idea was evolving around the time of Dot.com bubble growing to it’s largest. Whilst we have been naive and green, as any business is, when growing, we knew that the dot.com bubble would burst. When you saw headline news on the BBC about a new internet company that sold dog food, you sort of knew that this was not going to last. The bubble duly burst in 2000, just as we started to launch our new online business insurance brokerage service.

At the time, there was a complete mistrust of anything Internet related. This was a combination of the existing, traditional broking houses deciding that they didn’t like these young upstarts changing the distribution pattern and the fact that Internet access was not enjoyed by all. There was also a third point in that dial up internet connections were as slow as slow can be.

But, as the internet became more widely available and broadband became more accessible, people realised that to get a shop insurance quote you did not have to go and sit in your local brokers office, you could sit in your own chair, in your own shop and correspond with us.

If you find yourself in that situation right now, please feel free to call us to discuss any of your business insurance requirements.

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It is now ten years since The Independent went bust, will there be another?

Thursday, October 13th, 2011

In the relatively staid world of business insurance, we have managed to battle it out over the past three or four years as the UK entered and exited it’s recession. Times have been tough for one and all, for us we have had to cope with the reduction, in our estimations, of around 15% in the number of active, trading businesses looking for insurance. A friend of mine who is a solicitor, specialising in land purchase, always says to me that we should be ok because people will always need insurance. Whilst this is undoubtedly true, you have to understand that there are still roughly the same number of insurers and underwriters operating in 2011 than there were in 2007 before the economy took it’s nose dive.

What this means is that they are all chasing an ever decreasing number of clients. Those insurers that have clients are also suffering because, contrary to what their actuaries are probably saying, they are not increasing their premiums to make up for their increased losses and reduced investment income. What they are doing is having to depress some of their prices just to keep customers, profitable ones, on their books.

So what does this bode for the industry as a whole? We have been here before, in the late 90’s and the start of the millennium which led to one of the bigger, growing, insurers (Independent) going bust. I worked for a large commercial insurance company at the time and one of the tasks I worked on in the “strategy” team, was to produce a report for senior management on exactly how the Independent was doing so well. The company was the stock market darling with it’s share price seemingly knowing no limits. The rest of us in the industry could only look on in wonder. They were picking up insurer of the year awards, picking up big clients and some of the best staff in our company went to work for them.

Then, as we all know now, the truth came out and the Independent crashed. There where rumours, trials and a lot of their staff ended up with worthless shares. The question we are asking is, who is going to be next? We have our ideas but of course we cannot go into print because without hard evidence we are going to be screwed into the ground for making libel. There are a few companies out there who, in the cold light of day, when you sit down and look at where they are now compared to where they were five or ten years ago have grown very fast. The ones we are thinking about have all been involved in either motor or liability insurance. Both of these classes of business are susceptible to what are called long tail claims. These are the claims that go on for years and years and cost an absolute fortune. If the insurers are not careful and do not reserve adequately for these claims, then they will turn around and bite them on the bum later on.

One analyst has gone into print about one large insurer saying that they think they are not adequately reserved. The insurer has categorically refuted these suggestions but, at the end of the day, the analyst must have thought long and hard about this before going to print. We need to sit down and see what the Financial Services Authority is going to do. They rightly got a very bad press about the problems with the banks, here’s hoping that they keep a closer eye on the insurers. As a business insurance broker we have to be careful about who we choose to recommend to our clients. We cannot rely solely on what we read in the press, it is about time the FSA categorised insurers along the same lines as the ratings agencies.

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Let property insurance – which broker should you go to?

Wednesday, October 12th, 2011

A few years ago, before the big buy to let boom kicked off, there were not that many individuals who had residential properties that they owned and let out. Whilst not an exact replica, the UK tended to follow some of the other European countries. Landlords were either individuals or companies with access to large amounts of capital, which meant they could build up large estates of property.

It was not easy for individuals to get finance to purchase other properties. Unless they had a large capital basis you could not get a second home mortgage. Many landlords were “accidental” ones, they were left properties which they rented out or they moved from a flat to a house and managed to keep the first mortgage going.

As the new millennium came and went, the banks started to throw finance at people that wanted to borrow to buy second, third and fourth properties to rent out. As long as you had capital tied up in your current property, in the form of equity, you could borrow. And borrow they did! The rest of course is history, with the bankers thinking that the bubble would never burst.

As we approach the end of 2011 though, we know, as a business insurance broker, that the sensible people out there who did not borrow irresponsibly still have properties and of course they still need to get policies to protect them. The question is, who do you go to when you need to get a quote?

Again, there has been a bit of a sea change in where you can go to get yourself a buy to let insurance quote. Many of the domestic, or home only insurers, are seeking market share of the letting market and offering an adapted home policy for properties with tenants. You need to consider though, what happens when these properties are empty, or you go from a professional tenant to students or let to a local authority?

This is where you need to speak to an independent broker, that specialises in business. Although you may not be earning a lot of money from your let property, as far as we, and the commercial insurance companies we deal with, are concerned, it is a “business”.

If you have one, two or twenty two properties to cover, please call us to see what we can do for you.

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Do not rely solely on your business insurance for winter.

Tuesday, October 11th, 2011

Just read another report this morning about the potential of another harsh winter in the UK. I have all but given up hope that certain organisations have the ability to accurately predict the UK weather more than ten minutes in advance. We have now had two potential “barbecue” summers in 2010 and 2011 and to be honest, they have not exactly lived up to expectations.

I am not sure why they feel they can predict the winter weather better than the summer, but they have said that 2011/2012 will be number three in five consecutive bad winters. Whilst the UK retail industry look to the summer forecasts to see firstly what to stock their shelves with and secondly, whether they will make any money, in the world of business insurance, we look to the winter forecast in more detail.

Being of a certain age, I know that the UK is in that zone where we do have bad winters, we do get on with things and life really does not have come to a grinding halt. Where the weather forecasters predict something similar to last year, we need to plan on two sides. Firstly, as a business issue, being a Scottish based, but UK wide, business we have staffing concerns to be aware of. Whilst we say that the country should not grind to a halt we need to think about staff. If it is not safe for staff to come to work then we have to manage that. Living locally myself there is always going to be an element of cover here. The second point we need to be aware of is that there may be a large influx of burst pipe claims.

Whilst we are preparing and considering the effects of the winter weather, it is worth pointing out that all types of business need to consider what can happen to them. We have blogged long and hard about the need for a god quality policy but you cannot rely solely on your policy. We saw a lot of shop insurance claims last year, where the businesses were shut for a number of days following defrosting, burst, pipes flooding the business premises. Whilst their policies paid out, this does not help you with lost customers that do not come back.

A few simple steps can make all the difference to a business suffering either no claim or a small claim. It is worth making the effort, if possible to visit the business as many times as possible over the weekends and when the thaw kicks in. It may well be that the forecasters are just hedging their bets and saying it will be a bad winter. But, it is always better to be prepared.

Posted in business insurance, retail insurance, shop insurance | Comments Off

Multi location business insurance – policy or policies?

Monday, October 10th, 2011

Where a business has more than one location, they have a choice of either taking out a single policy, to cover all the locations together, or separate policies. The question is, is there any benefit to taking out the single policy or not?

It really depends on whether you want to have one single policy, with one single renewal date and, the worst of it all, is one single premium payment. You can of course pay the premium in instalments of course.

The multi location policy would normally be more suited to a portfolio commercial property insurance policy. If an individual or a business owns more than three or four properties, it can be a bit time consuming to work out all of the individual renewal dates and go through the detailed review process at many different times throughout the year. Having worked at a large insurer that concentrated on the leisure industry, we used to deal with the large public house estates. These numbered in the hundreds and thousands.

Whereas for the smaller businesses, it can be better to have individual policies. You do not always tend to get a bigger saving by combining all of your locations into one policy. If you are careful and speak to a decent broker, they can get you good deals for all types of location. The one point you need to be aware of is claims.

The more properties you own, of course the more likelihood there is of a loss. You need to declare to your insurers every single loss, or claim, whether insured or not. Therefore, if you own three buildings and have three separate policies, at each renewal you need to declare to each insurer of each risk, the claims that you have suffered on each property.

If you have a portfolio policy, you do not need to think about this as there is one insurer for all the properties. But, one claim may adversely affect the pricing for the whole policy. Whereas, with three separate policies if you have a claim on one, and declare this to the other insurers then they may not take this into account as it happened at another location.

As we always say, and always will say, the best way to decide the way forward is to speak to an independent business insurance broker. They will let you know the options available. If you try a website that “offers” to compare business insurance, you will never know the different options available.

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Business insurance – contents on it's own?

Saturday, October 8th, 2011

As a business insurance broker, we get enquiries for all sorts of covers, in the main it is people looking for quotes to compare against their renewal from A N Other insurer or for a new venture. Sometimes though we get enquiries from people just looking for advice on what type of cover you can or cannot get.

Nowadays we do get more questions about insuring stock on it’s own. This is usually where businesses are trading from a home address but are keeping their stock in another location. They do not feel here is a need for any liability insurance and just want cover for the stock that they own. Usually this is stored with one of the companies where you have access to a unit in a communal building. You can sometimes get cover from them directly, but they tend to charge an amount per thousand and it can add up.

This is where you are sometimes better getting a business from home insurance package, which can cover your liabilities and your stock stored elsehwere. The only real problem is that you need to get an insurer to accept the security at the storage location. Most of these units are very, very secure, others are less so. You need to consider what is here to stop people, either legally or illegally on the premises from breaking into your unit and pilfering all or some of your stock. If the security is not strong or substantial enough for the insurers the claim may not be paid.

As we always say, get proper, quality advice from an independent business insurance broker.

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Can I get a business insurance package policy?

Friday, October 7th, 2011

Most forms of business insurance policy are a package, made up of different types of cover. If you have insurance for your car, that policy will be made up in a similar way, you will have distinct types of cover. These will include, the damage to the car itself, theft of the contents, the glass and windscreen, your liability (public/third party) to other road users or owners of property and lastly legal expenses in pursuing a claim against a third party that has injured you or caused damage to your car.

It is the same for your business policy, you can get cover for stock, contents, buildings, employers, products and public liability, legal expenses and a whole host of other covers. Many, many years ago buying a policy was a fairly complex process. Technology at the time was limited to telephones and typewriters so everything had to be drafted by hand. As there was human intervention at every step of the process this of course led to errors and it took months for the end consumer to go from requesting a business insurance quote to sitting there with a valid policy in their hands.

I started work for a large insurer in 1986. The department I worked in dealt with some of the larger businesses and for a new customer, it was normal for them not to have received their full policy documentation at time of the first renewal.

What has happened in the intervening years is that nearly all of the commercial insurance companies have built up and designed a range of policies for different trades. There are certain business insurance brokers that design and build schemes with bespoke policies for anything from fisherman to bowling clubs. The package policies we are talking about are ones that have been built for any of the following, pubs, shops, office, restaurants, take aways, hairdressers, beauty salons, hotels and offices. There are others but these are the main ones. The core of the policies are very much the same, with small changes depending on the trade. For example a licensed restaurant or pub will, or should, have the option of loss of licence cover, whereas a beauty salon will need wider treatment insurance.

If you are in one of these main trades then you need to speak to a broker to make sure they can provide you with a suitable package contract.

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Differentiating public, products and employers liability insurance.

Tuesday, October 4th, 2011

When looking at getting a business insurance quote, there are three types of liability cover that should be included, employers, public and products liability. You can get other types of liability insurance, but these three are the main ones available in the UK.

If you are just starting out in business, you may be looking for a quote and may wonder exactly what cover you need compared to cover that you must have. The must have category is employers liability, unless of course you do not have any employees. This may seem simple enough but please be aware that the definition of employee is very, very wide. This is deliberate in that insurers are no able to not pay out on a claim due to minutiae in the policy wording about what is and what is not an employee. There will of course be people that are not employees, such as third party contractors or bona-fide sub contractors, but in the main anyone that is working, “under your direction”, for you is deemed to be an employee. This can include work experience persons, people under short term contracts and even friends and family working for you on a short term basis.

The insurance industry is sometimes accused of scaremongering. What we like to do though is to simply let you know of the potential for a claim. Under employers liability we have seen, over the years, a few claims paid where there is such a tenuous link between the “employer” and “emploee” that it is always worth getting cover.

The law of the land says that you must have employers liability insurance cover with a minimum limit of indemnity of £5,000,000. Most of the commercial insurance companies will provide a limit of £10,000,000. If you are in any doubt as to what constitutes an employee, as it relates to your business, please speak to your accountant or even the Inland Revenue. You may be surprised at how wide the definition of an employee can be.

Now we come to the others, public and products. These two covers are not legally required, although you may find that many contracts (eg if you are working for a local authority) have clauses in insisting that you have cover in place. Public liability is if you cause any injury, illness, disease or damage on the course of your work. The roofer dropping a tile on someone’s car, someone slipping on water on the floor from a cleaners mop and someone tripping over a loose carpet in your shop are all examples of public liability claims we have seen on policies. The person tripping on the carpet would have put some of the most prolific divers on our football grounds to shame with the “injuries” they suffered and the money they actually received.

Products liability insurance goes hand in hand with public and covers any illness, injury, disease or damage caused by products you supply or manufacture. Again, there is no legal requirement for this, but you may be required to prove that you have cover in place.

Whilst we say that public and products liability are not legally required, please note that this is not to say that it is cover that a sensible and prudent business should ever go without. The problem with liability claims is that they are “once in a blue moon” events. But, when they do get to claim stage the costs are never small.

Many insurers will offer a separate combined liability insurance policy, giving these three covers together under one policy. As with every blog we have ever written or will write, you really do need to speak to an independent business insurance broker to get the best help and advice.

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Business interruption insurance – what indemnity period?

Monday, October 3rd, 2011

All package commercial insurance policies, for example those covering pubs, shops, offices, restaurants, takeaways and salons, will include an element of cover if the business is interrupted, after a loss.

The breadth and depth of cover provided under these policies can vary a great deal. As with all policies, you only really find out how wide the cover is, in the event of a claim. If a business suffers a loss that forces closure, or reduced trading, then this should be covered under their business interruption section. This also goes by the alternative title of consequential loss or, the more descriptive, loss of income. Other sections of cover may have excesses applying, for example glass usually has an excess of £100 or £250, theft is around the £200-£250 mark but for business interruption, under package policies, there is no excess.

In the vast majority of cases a business interruption claim will be submitted alongside a material damage claim for the same risk address. For example, a shop has a burst pipe in the winter and submits a claim for new contents and stock. This is damage to the business assets, or material/property damage. If they are closed, which they undoubtedly will be, then they will submit a claim under their business interruption section.

There does not have to be a loss at the same address though, for there to be a valid claim. Without going into too much details, a business interruption will have specified perils (ie storm, flood, fire) and as long as there is a material damage loss for the same peril, then cover will apply. This means that if there is a fire in a neighbouring property, and the street is closed, or access is denied, then a claim can be submitted even if there is no claim submitted under the property damage.

The bit you really need to think about is the indemnity period. If that fire happened to your property or business and you had to rebuild, from scratch, how long would this take? If your indemnity period is 12 months, and you have to trade from the same address, then you may need to think about extending this. Time and time again businesses realises that 12 months disappears, like that. If there is a devastating fire, then you will have to clear the site, get architects and/or surveyors in to discuss rebuilding, get tenders out, maybe seek planning permission and then start the work. This can, and does, take more than a year in certain cases. A lot of businesses can trade again, anywhere they want. This is why office insurance policies can have increased cost of working expenses. But, a hotel, pub or restaurant is known in that area and cannot really up sticks and move.

When you are getting a business insurance quote, please speak to an independent broker as they will discuss all of these things with you. You can then decide whether to get cover for 12, 18, 24 or 36 months which are the usual periods available.

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