Archive for November, 2011

Beauty salon insurance – with and without the treatment risk

Monday, November 28th, 2011

Over the years, any business insurance broker will start to develop an understanding of which parts of the economy they can concentrate their activities. Businessinsure know that we can offer an excellent service to the SME market and all kinds and types of property owner. We don’t pretend to be experts at placing cover for aviation, nuclear and offshore, for example. But property owners, shops, pubs, offices, restaurants, takeaways, hairdressers and beauty salons are bread and butter to us.

We deliberately set out to explain as much as possible to our customers over the phone about their quotes, rather than just emailing or posting the quote and leaving it at that. We sometimes get unstuck though, by doing a proper broking job. We try and understand what our customers need. The Financial Services Authority (who regulate us) call this “demands and needs”. We have had many occasions when we have quoted a customer a comprehensive policy, for a figure (lets say £1,000) and they then come back and say another broker has quoted £650. We try and ascertain what alternative cover they have and 9 times out of 10, it is lesser cover. In addition to less cover there are usually higher excesses and more onerous terms.

After the customer has a claim, usually somethign small such as a broken window or theft, they realise that the wider cover and lower excess was actually quite a good deal and come back. As far as beauty salon insurance is concerned, the major difference in cover is that we can quote with, and without treatment cover. This can usually make a 50% difference in the premium. We will always point out to the customer the differences and usually email the two separate quotes. It is then up to the customer to decide, based on the information we have provided, if they need to take out the wider cover, with full treatment risks included.

Posted in beauty salon insurance, business insurance broker, salon insurance | Comments Off

Compare business insurance

Saturday, November 26th, 2011

Given the huge increases in premiums for car insurance in the past few years, the websites that compare insurance costs have grown and grown. As usual, many of the personal and business insurance companies missed a trick and didn’t realise, with an Internet savvy population, how quickly they would gain market share.

Many of these sites have expanded into an ever wider range of products, we are not sure if this is simply because they are trying to gain market share, or the profitability of their existing range of products is reducing, or being eroded as insurers reduce commission share payments. Some of them are offering to compare business insurance now and the question, for many small businesses, is – should I use one of these sites or not? The answer, as far as Businessinsure is concerned is no.

You can get better prices, better cover, good quality advice and a speedy service from many of the online brokers, like ourselves, that operate to service the business population that want quick quotes, now.

Don’t be fooled into thinking that your cheap quote gives you all the cover you need. The reason a lot of the quotes are cheap is because the cover is absolutely bare bones and does not really cover you for what you need. You also have nothing to compare it to.

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Loss of rental income – what’s the indemnity period all about?

Friday, November 25th, 2011

On a commercial property owners insurance policy, the main cover taken out is for the actual building. This is the actual structure or the bricks and mortar. You cannot take out a policy without this. The cover you get is what they call “standard perils”, which is fire, storm, flood, burst pipes and a few others. This cover can be extended to include accidental damage and subsidence, heave and landslip. We always quote to include these covers as a minimum.

In addition you can get property owners liability and glass cover. The reason being that insurers always cover the glass separately. Then you can get loss of rental income. If you own the building and rent it out, if there is a fire (for example) and your tenant moves out, you lose out on your rent. This is where you get loss of rental income, but only from an insured peril. What this means is, if a tenant defaults on their rent, you are not covered, but if it is unable to be let for 9 or 10 months while work is done, you get the rent.

The question is, how long do you take the rent cover for? This is what the indemnity period is. All standard policies, that have loss of rent, will have the cover for 12 months. What you need to do though is consider what would happen, in the event of a disastrous fire? Could your whole property be rebuilt to a standard so it could be let again within 12 months? The chances are, no, and this is why you may need to speak to your business insurance broker about getting cover for an extended period. It really adds very little to the premium to go from 12 to 36 months. You can get cover for 18, 24 and even 48 months from most insurers. This is, again, where the beauty of dealing with a broker shines through.

There are plenty of websites that offer, and we use the term as loosely as possible, to compare business insurance. If you do not tick the box to add loss of rent, there is no-one there to question this and explain the benefits of this cover.

Posted in business insurance, commercial buildings insurance, commercial property insurance, commercial property insurance quote | Comments Off

Business insurance – winter burst pipe claims and increased excesses.

Wednesday, November 23rd, 2011

Over the past two years, UK business insurance companies have suffered adversely from the two severe winters. None of us can forget the way that parts of the UK came to a standstill after the heavy snowfalls and cold weather in December 2010. The insurers, those that cover business assets and buildings, suffered worse from the cold weather. When the weather plummets below minus 3 or 4, this can cause the water in any un-lagged pipes to freeze. It needs to be slow moving or standing water for it to freeze. But, when the temperature stays at minus figures for a few days, or more, it does not take long for pipes both inside and outside to freeze.

Now, I am not an expert on the physics of freezing water, but the problem is that once it starts to freeze this spreads as the temperatures remain below freezing. Frozen water takes up more space than liquid water and if i cannot go any further in a pipe, because it is all frozen, it goes “out the way”. This is either from a split in the pipe, copper, brass and plastic pipes are not that strong or any of the joins. When it remains frozen this is not a problem, but when the frozen water melts the split in the pipe or the broken joint is where the water goes. Even a tiny little split, when faced with water under mains pressure, will release gallons and gallons of water every hour. This usually happens to pipes that are hidden and, if you are not in the premises, even if just overnight it can wreak havoc.

The reason for going through this long explanation is that insurers have suffered statistically high levels of claims for burst pipes and some and actually applying increased excesses, across the board, to all their policies. You need to check whether your business insurance renewal quote documents include an increased excess, because this may not have been made fully clear to you at renewal stage.

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Unoccupied commercial buildings insurance – what premium is charged?

Monday, November 21st, 2011

When speaking to a commercial insurance company about their top ten risks that they do not like, I can guarantee that unoccupied properties, whether commercial or residential, will more than likely be in their top five. Having worked for various insurers over many, many years they all treat them (unoccupied properties) the same. They consider them to be a higher risk than tenanted properties and also offer restricted cover, because they suffer more losses and they also charge a higher rate for this lesser cover.

The way a commercial building premium is calculated can be a bit complex, because it is based on years and years of statistics. As underwriters though, we do not need to use this information. The insurers produce a “rate” which is a percentage amount (per mille is another story altogether) applied to the rebuilding sum insured for a building.

If you own a property that is let out, for example, as a low risk retail (ie sweet shop, newsagent, chemist etc), you would be looking at an average rate, in 2011, of 0.15 to 0.20% depending on where the building is and the cover you get. If the tenant left and you need to cover this as an unoccupied building insurance, the main stream companies (the big brand insurers we have all heard about) will either not provide cover or will charge rates up to 0.75% and restrict the cover. Normal cover includes fire, storm, flood, accidental damage, galss and property owners liability, to name but a few. Unoccupied cover is restricted to what we summarise as FLEA cover. Fire, lightning, earthquake and aircraft (plus property owners liability). Whilst this gives you the main cover (fire) it does not provide any cover, say for storm.

We have access to insurers that, whilst they are not looking to be market leaders, are keen to insure unoccupied buildings at rates nearer to 0.275 to 0.30% with wider cover than FLEA. It of course depends on a number of other factors and you are better to speak to us over the phone to discuss your individual requirements.

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

Looking for a business insurance quote, can you still get a decent premium and cover?

Friday, November 18th, 2011

We have a customer, who has a number of businesses insured with us. One of the businesses suffered two losses in the past twelve months, which the insurers put a reserve against, of £30,000 for the two claims. When an insurer receives a notification of a claim, particularly a liability insurance claim, they have to estimate what it would cost them. As claims take weeks, months and years to settle, they need to know whether they are making losses in the current year or not. History is littered with insurance companies that thought they could be tighter on their claims only to find out that the liability ones that they under-estimated come back to haunt them.

I therefore explained to the client that these two losses, added to the one they had three years ago, meant that insurers were looking to apply an increase. The increase was 50% and was subject to them adhering to risk improvements following the survey. The client was not happy and asked us to re market. I had to explain that there was simply no point, even with the 50% increase their premium was still fairly good and with their claims experience other insurers would either not quote or would be way over the top, deliberately, so they did not pick up the business.

Their question was, why can you not get me a cheap business insurance quote? My answer was that I had got this for them. You have to take the rough with the smooth I’m afraid and if an insurer is still happy to insure a risk, after losses at this level, they are entitled, in my opinion, to apply a rate increase. The customer has said they are going to market their business to other brokers. It may well be that they find a cheaper quote, but if they do not fully declare the losses (as I fear they may) then in the event of a future loss, if the insurers find out their claims history, then they are going to be out of pocket by a great deal.

Posted in business insurance quote, liability insurance | No Comments »

Professional indemnity insurance – which limit to choose?

Thursday, November 17th, 2011

If we are approached for a commercial building insurance quote, one of the main questions we will ask is “how much is the sum insured”? Unlike cover for your house, where there may be a blanket limit of £400,000 or £500,000, for commercial properties you will declare the amount. Whilst it is not easy to get this figure, the policy is very clear, you are covered for x amount, as long as it represents the correct rebuilding cost.

But what has this to do with professional indemnity insurance? Not a lot, except to show that with building insurance, you can actually, see  and feel the “thing” that is insured. You can pay a surveyor to give you that valuation to confirm exactly how much you should insure for.

Now, if you are looking for professional indemnity insurance, how do you know what amount to insure for? If you are undertaking a contract for a customer and they are insisting on the cover being in force, then your job may be easier if they put a limit in writing to you. But, if they don’t or you are just looking for a professional indemnity quote, how do you decide what limit to go for?

The main insurers we use, will quote from £100,000 up to £5,000,000 any one claim. One quote this afternoon went from £290.00 at £100k to £4,3970.00 at £5m. You can see that there is a big difference in premium because there is a big difference in the potential cost to the insurers.

What you do not want to do is over insure yourself, the insurers of course enjoy this, because they get more money. Our job, as a business insurance broker is to get you the best deal, price and cover wise, for the insurance you need. Our advice is that you have to sit down, maybe with your colleagues and work out the worst case scenario cost and the average case scenario loss. Then, speaking to your broker you have to work out whether you go for the higher or lower or somewhere in between. It will also depend on whether your quote or cover is any one claim (better) or in the aggregate (less better!). As ever, get advice from a professional independent business insurance broker.

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

Business insurance – trusting a remote broker

Wednesday, November 16th, 2011

As a business insurance broker, we receive many enquiries every week for quotes, based on a business receiving renewal notification from their current broker. Over the past 10 years there has been a growth in businesses choosing to deal with a broker that is not “around the corner”. The Internet has of course been the greatest driver and has allowed businesses based, for example in Cornwall, to deal with a broker, based in Perth (picking one at random, of course).

This is the whole raison d’etre of Businessinsure. We knew there was a gap in the market, and that the gap in the market was never going to get smaller. As more and more businesses are run by techno-savvy people, with less and less time on their hands, the will turn to the net to get a better price. This is what we do and this is what we do well, when we talk about a better price though, we also look for comparable, if not better, cover. Whilst we cannot provide exact stats, we can confidently state that in over 85% of cases we are able to get a better price for the same, or better, cover for all the businesses that contact us.

But, our skill and speed at doing this is sometimes our downfall. The reason being that some customers who still deal with a broker “around the corner” are sometimes dealing with a broker that can be complacent. When that broker comes under pressure, ie their customer says I am moving elsewhere at renewal, they hit “panic mode”. We quoted for an importer of scientific equipment. Their existing broker had offered a renewal at 16% more than the previous year, with the same commercial insurance company, and had said that there were no alternatives (at a better price). We managed to get a quote within 24 hours that shaved 12% of their premium last year, saving them around 27% on this offer.

But, when the customer spoke to their broker, he awoke from his slumber and lazily phoned the holding, or current insurer, to let them know they were going to lose a £9,000 insurance renewal. The holding insurer simply matched our quote. The broker then told the customer that because we were remote (the customer was in Southampton, we are in Perth and their broker was in Portsmouth) we would never get the same service. This is from a broker that couldn’t be bothered to look around for a decent renewal premium. Unfortunately, for us, the customer swallowed this and the broker retained the business.

You can now see where I am going to. A local broker is not always the best answer, some of them have just got very lazy and very complacent. We can offer a similar service, particularly in times of a loss. Most insurers will appoint an adjuster anyway, so the service the broker provides, “on the ground” is minimal anyway.

If you want to be one of the 85% of customers who save money, give us a call today!

Posted in business insurance broker, commercial insurance | Comments Off

Businessinsure is back

Tuesday, November 15th, 2011

It has been tough, changing website providers and not being able to access and update the website. But, after just one month we are back in action, on the blog front at least. As far as businessinsure is concerned, we have continued to trade as we are seeing more new business activity in November than we have seen for at least two years.

Being an independent business insurance broker is a pretty good barometer for what is going on, business wise, out there in UK plc. We speak to each and every person that we provide a quote for, this way we can get an understanding of what is really happening. The entrepreneurial spirit in the UK is, contrary to some opinions, thriving as well as it ever did. It may come across as harsh, but with the banks throwing money around 5 or 6 years ago, anyone could start a business. Some were started which really had no chance of success. This is not because of the people running the businesses necessarily, but the fact that banks were not lending subject to strict criteria. In 2011, if yo can get funding, the banks have actually gone the other way and are practically asking you to get blood from a stone before they will lend you any ready cash.

In a way this is forcing the standard good, sensible business procedures on people so they do not get into too much debt, too easily. One of our big, big sellers is pub insurance, we have seen many, many businesses go in the last 36 months. Nowadays though, instead of a bank lending £200,000 without blinking, they are now setting strict criteria which makes business owners absolutely concentrate on building businesses and growing turnover, income and profit. Five years ago if you had a bad year, the bank would lend more, as an owner you didn’t really have to face the music and go out there and drum up good quality business.

Some of the left leaning newspapers are saying that the UK has never had it so bad. This is not true, we spent years saying that the UK was over-geared and in debt. This is slowly, and I mean slowly, changing. Will the good times come back? No, not in the easy money form that we saw in 2003-2007. What we will see is a lean, mean, economic machine. The good old times will be back when you only got what you could realistically afford and you realised that just because one of your neighbours had a shiny new car it didn’t mean that you had to get one as well.

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