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Shop insurance – who covers your roller shutters?

Tuesday, September 7th, 2010

Roller shutters are everywhere. It used to be that you only needed roller shutters if you were a city centre business. Nowadays though, it does not matter which city or town you go to, a good proportion of high street properties will have this form of protection.

They are not usually a requirement of any business insurance quote or policy you take out. If we declare to an insurer that a business has roller shutters it is considered as a good underwriting feature, instead of a factor whihc can allow a discount.

Apart from the actual type of business and the location, the other two factors that affect the theft element of any cover, are the intruder alarm and locks. This is where an insurer may choose to insist on a certain security level, prior to providing, for example, theft cover.

But, you may install the roller shutter yourself and a good quality electric shutter for a even a 1,000 square foot shop can set you back a few thousand pounds. So, should this be on your shop insurance policy? Or the policy for the landlord or owner of the building?

Technically, you need to insure it under your policy. You as the shop owner have the financial interest, as you own and have paid for the shutter. Speak to your business insurance broker about getting this added to your policy. It is not a “content” or “fixture or fitting”, it must be insured as a tenants improvement.

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Shop insurance – watch the instalment charge

Monday, September 6th, 2010

A couple of years ago, pre 2007, you could buy almost any product or service at low or 0% instalments. As the number of these deals reduce daily, you can still find business insurance at 0%, but you need to look a bit more carefully than before.

Most insurance companies (that offered business related policies), around 2006/2007 decided it would be a good selling point to offer either interest free instalments, or at the very least, instalments at a 1 or 2% charge.

Once one company had started to do this, as with most of these distribution and sales changes, it did not take long for many other companies to decide that they had to offer the same. So, we went from only a handful out of say 60 or 70 different companies offering 0%, to a couple of dozen offering this. This only took about six months. Which as any one in the industry knows, is lightning speed.

But, as we move through 2010 and approach 2011, most commercial insurance companies are starting to seriously consider each and every one of their costs. If they offer you interest free instalments, this costs them, depending on their size, anything between 3 and 6%. Instantly, their margins have been struck by what is a relatively high percentage.

You may find though that if you did have instalments free of interest or very low, single digit charges, that these are slowly starting to creep up. A half per cent here or there may not seem like much, but when this is coupled with a potential increase in your premium, it can add up to 10 or 15% more than you were paying last year.

This only appears to be happening on certain products though. Shop insurance is one of those that appears to be hit. When you are paying an average premium of only £600 per year, a £20 or £30 increase may not seem like a huge amount. But to the insurers, across the piece, this is nearly 5% on their margins. If you are paying your insurance on instalments, and you have a renewal letter arriving soon, make sure you check the monthly charge.

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Getting a competitive office insurance quote

Sunday, September 5th, 2010

In the UK, all business insurance have their favoured categories of insurance. To use the time worn phrase, there are some that are cash cows and others that do not produce as much profit and others that are a drain on resources and cash.

One of the main categories that has, year on year, posted positive returns for most companies is office insurance. Offices tend to be run well, they are low risk, and in these modern technological times, have significant values of business contents, particularly IT.

So, you would think that as insurers make money on offices that they will always offer the best prices. Wrong! If you start in business today and look around for a quote, you will get a very competitive premium. But, over the years the insurers rely on the fact that there is always a distinct lack of inertia as far as looking around for alternatives at renewal time. Your premium will steadily creep up and up, as your claims ratio (ie the amount and cost of claims) gets better and better.

We are of course simplifying things here, not every insurer does things this way. The more forward thinking and pro-active ones are quote realistic on the prices. Usually though you need to have a switched on business insurance broker dealing with your renewal. What this means is that they are fully aware of the market price and if the insurers try to hike the figure to high, they will look for a cheaper, comparable, alternative for you.

We dislike the word cheap, competitive is a much more preferable option. Cheap tends to denote something that will ultimately not provide the financial protection you are looking for. If your insurer or broker have been steadily increasing your premium, and you have not had claims or losses, then you need to take a stand and look elsewhere.

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Employers liability insurance – what limit of indemnity MUST I have?

Saturday, September 4th, 2010

If you either run a business or operate as a sole trader and have employees, you are legally required to have in force valid, and suitable, employers liability insurance. This is common knowledge amongst most business people, but the question we get asked most is what is the legal limit of indemnity required?

With access to information over the net, it wil only take you a few minutes to find a few sites that tell you a bit more about this cover. However, the answers and information you may see can be slightly confusing.

The first fact is that you need the cover if any working for you, whether they are paid or not, whether they are only part-time or whether they are only temporary, they fall under the definition of employee. Business insurance policies will always have, usually near the start, a few pages devoted to definitions. As the policy is a lengthy, and legal, document the insurance company is obliged to define certain things. For example, it will define what a building is, what stock is and how gross profit is calculated, as far as the cover is concerned.

There will also be a definition of employee, and this will always be quite wide.

You must have cover for a minimum limit of indemnity of £5,000,000 in respect of each and every claim. ie potentially you could have 8 claims at £4,000,000 or 17 at £3,000,000 etc etc. Most UK insurers have a standard minimum limit of indemnity of double this, at £10,000,000.

The problem, that causes some confusion, is that your certificate of employers liability, will only state on it the legal minimum, ie £5m. It is in the policy wording and schedule where it states that you have the increased cover at £10m.

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Business insurance – commercial legal expenses

Friday, September 3rd, 2010

In a standard, or package, business insurance policy there will usually be an element of liability cover. The three main types are employers, public and products.

These liability covers provide for a “limit of indemnity” either any one claim or in any one period of insurance. You, as a business, could face a claim under one of these, say for damage caused by a product you have supplied or work you have done, or an injury to an employee.

The purpose of the cover is to pay for the consequences of the damage. Within this limit of indemnity, or in addition to it, will be included legal fees. Both yours and the claimants, if successful.

But what happens if you face a legal challenge for something that is not covered under one of the tri-liability covers? This is where you need to have commercial legal expenses insurance. This is a separate cover, provided by a specialist insurer.

You have two options, either take out a separate policy or get a policy that actually includes this cover.

As we are becoming more and more litigious in the UK, with no-win, no-fee solicitors on the prowl everywhere, it is easier than ever before for the “man in the street” to raise a legal claim against any business or public sector body.

Whether they will admit it or not, the vast majority of these claims are made for only a few thousand pounds, in the hope that insurers will simply pay them as it is cheaper than fighting the case. But, things are changing slowly and insurers are happier to challenge more and more. Every business is different and you need to consider exactly what cover you need, and can afford. Speak to your broker about the different options and, depending on your trade, you can add in a good quality cover for as little as £50 per year.

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Business insurance – how to save money on your renewal

Thursday, September 2nd, 2010

As with many financial services providers, business insurance companies rely on two things to ensure most renewing customers stay with them. The first one is that they can usually “get away” with putting on small premium increments, usually low single digit percentages, year on year. And secondly, that the customer will not feel that the increase, in the whole scheme of things, is that bad and is not high enough to warrant looking elsewhere.

This is all well and good if you have the money to spare, but think about your customers. If you increased your prices, every single year, by 3 or 4%, eventually they are going to consider going elsewhere. Particularly when they have sales people banging on their door day in and day out offering the same, or similar, products for less money.

If youhave been with the same insurer for a few years, you will have seen, in 90% of cases, an increase in premium. All insurers have a dual pricing philosophy, it is basic economics, to allow new customers a better price than a returning customer.

But now is the time for you to consider looking elsewhere. 2010 is proving to be a tough year, forget the big increases in GDP. Whilst these are good, most businesses are still trading well below their 2007 levels.

The one, and only way, for you to save money on your renewal, without losing out on cover, is to speak to a business insurance broker. Their sole role in the economics of UK plc, is to serve you, the insurance purchasing business. Whilst they may have agencies with insurers, they are legally in a relationship with you (should you choose to purchase a policy from them) and they must offer you the best type of product available for the most competitive price.

Whilst we cannot guarantee anything, we are fairly sure that if you have renewal documents sitting on your desk, you can get a better price within a few hours by speaking to an independent broker.

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Commercial property insurance – flat roofs

Wednesday, September 1st, 2010

Chances are that if you have a commercial property insurance policy in force, there will be a condition or warranty relating to any non-standard constructed roofs. If your property or properties have a normal pitched roof covered with slates or tiles, then this does not apply. However, if part or all of your roof is flat, then you need to exercise care as to what exactly is, or is not, covered by your policy.

Most policies will provide the usual range of perils such as storm, flood, fire, theft, burst pipes etc. But, properties that have flat roofs are usually more susceptible to certain types of loss than a traditional roof.

Concrete roofs are not so bad. You do not see many of them nowadays (in new builds) but throughout the 70’s and 80’s this was a popular form of construction because it was quick and sturdy. What insurers are concerned about is flat roofs that can, over time, deteriorate in condition. We are particularly talking about felt or asphalt on top of timber. In the main, this type of construction was used on extensions as opposed to the whole roof on a new build. There are many properties though where the whole property is roofed with felt on timber.

If you are receiving rental income on the property, or you occupy the property yourself (for your trade) then you will have arranged a policy through a business insurance broker. 9 times out of 10, the policy will have been sold based on price. The cheaper the policy though, the more careful you need to look at the conditions and/or warranties.

For example, you may have a standard business insurance policy which has a nice, low, £100 excess. But, if you look carefully, any losses attributable to the flat roof may be subject to a significantly higher excess. £500 is the norm and this can rise to £750. This means that for every loss relating to the flat roof, you will pay a huge chunk of any claim, if not all of it. Also, the policy may state that you need to have the roof inspected every year, or bi-annually, by a competent contractor (ie not yourself) and any defects remedied.

This covers three points. Firstly, the increased excess may make the cheaper policy youhave bought not such a good deal. Secondly, the cost of getting a contractor even to look at a roof can be a few hundred pounds and thirdly, you will need to provide written evidence that you have had the roof inspected within the last twelve months. So you cannot get away from the additional costs.

All in all, it may seem like a good deal to get a cheaper premium, but as we always point out, the devil is in the detail.

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Restaurant insurance – outside catering

Tuesday, August 31st, 2010

With every type of business insurance, you should always ensure that all of your business activities are adequately covered by your policy. This may seem fairly obvious, but certain insurers can use the small print in the policy wording to deny liability for a claim because they were not aware that you were doing a certain type of work.

Insurers do of course allow there to be a certain amount of leeway, for example they accept that in a public house there will possible be live music, the odd band or maybe other entertainment. What they will need to know is if you have, for example, a disco every Friday night, where people pay to get in and you are open til 3 am on Saturday.

As far as restaurant insurance is concerned, they accept that you may have private functions and possible undertake him deliveries. But, if you undertake outside catering, this is something that insurers should be advised of, and your policy documents should note this.

Outside catering presents increased risks for the business, on both the liabilities and the damage to property front. Depending on the amount of time that you undertake for this activity they may wish to apply certain terms and conditions or alternatively charge a higher premium.

If you hire in waiting and serving staff, this increases the employers liability insurance risk. You have staff that you may not be used to working with, may not be fully trained and they are working in a strange and possible busy environment. As far as the property risks are concerned, you have the increased chance of damage being caused for your equipment, maybe portable heating equipment and furniture.

Most insurers are reasonable about this and will simply endorse the policy to note this without charge or amending the policy. Others however (usually the ones that quote the cheapest premiums at the outset) will try an recoup some of their money by charging you for the changes to the policy. If the charges seem unreasonable, then challenge them and see whether they can be removed or reduced.

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Commercial property insurance – temporary unoccupany

Sunday, August 29th, 2010

If you have a commercial building insurance policy in force, the premium and cover will be based on a number of factors. One of these is the type of occupancy. As you can imagine, a building that is occupied as a fish and chip shop or woodworker is going to present a higher risk of fire loss than an office.

Insurers will either charge a higher premium, to reflect the increased risk, or apply terms (such as having all dirt and grease removed from takeaway ducting every month).

When a tenant leaves a property there is usually going to be a gap between when one business is trading and the next one starts. This can either be whilst you are awaiting new tenants or whilst there is a shop re-fit undertaken. You could be faced with months and months when the building is empty, given the tough economic times. There are estimates that 15% of the existing Woolworths store premises are still empty, nearly two years after the companies demise.

Your policy wording, as with all business insurance, will have certain terms, conditions and excesses. One of the conditions will relate to what happens to the cover when a building is empty for 30 days or more. Usually, if aa building is empty, un-tenanted or vacant for more than a month, there are fairly onerous cover restrictions.

You will find that your glass, storm, burst pipes or theft cover is excluded. The reason is that insurers, from experience, suffer more losses on unoccupied properties than they do tenanted ones.

You need to check your policy wording to see what terms apply if your building is going to be empty for any length of time.

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Restaurant insurance – getting the best cover

Saturday, August 28th, 2010

After having been through a tough recession, you would think that most businesses will be charging less for their services and products. However, you may be surprised to find your business insurance renewal premium is going up in 2010.

Insurers are facing an increasing number of claims from all types of cause and with personal injury claims, the settlement costs are increasing way in excess of inflation.

What this means in reality, is that they are realising that the prices they charge for your cover, depending on the type of trade, are not at an economic level. One of the products that have traditionally been under priced is restaurant insurance. Because there are so many restaurants in the UK, there has always been a new insurer that thinks they can move into this market, pick up lots of business and make money.

But, to move into this competitive market the one key selling point has always been price. Whilst insurers have always said that the product is more important than the price, they know full well that no-one is going to pay more than 5 or 6 % to get better cover.

So if you are looking for an alternative, because your premium has gone up, be very careful to ensure that you are getting like for like, if not better, cover. It is very important that you do not suddenly find that the premium saving of 10% you made is completely wiped out because you have a loss that is not covered.

The best way to ensure that you not only get a competitive price but decent cover, is to speak to a business insurance broker. A broker will search the market on your behalf and in many cases can get better deals than you could by going direct. You also have the benefit of one contact point, in respect of premium payment, cover changes and importantly, when you have a claim and want it settled as soon as possible.

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