In the world of business insurance, there are very few stand out characters. Not to say that people are boring, we just stick to our own geographic areas and communities with the companies we work with regularly. There are a few magazines that have the latest news. Over the past few years we have seen more and more articles regarding increasing rates.

Without going into too much depth, insurance has been, is and always will be a cyclical industry. I have seen many senior industry staff say that they are going to break the cycle, but it will never happen. If the chances of making good returns are there, then money will always flow in. Money flowing in means two things, more players and cheaper prices. We have seen, since 2003 an increase in the number of firms involved in underwriting (either directly or on behalf of an insurer panel) and as a consequence, with the money (debt) that has been kicking around in UK plc for the past 10 years, the prices have gone down. Year on year, at least 80% of our customers, for example shop insurance, are paying no more than 10% more than they were in 2002, which is not bad.

But, as we all know, Gordon Brown could not break the “boom and bust” cycle (it happens to everyone) and in 2008 it came crashing down around us. As a result, insurance pricing started to creep up. It is always commercial vehicle prices that go up first, then private cars and the gradually the rest. This is hwo our cycle works, the prices get cheaper and cheaper until there are no margins left at all. Then, all the cheap business that the insurers have picked up starts to lose money and they start to think about putting up prices.

So, going back to the characters. We don;t have a central handful of big names that can send messages out to the market, the industry and the public that get the price increase message across. But, in some of our magazines we are starting to see a war of words, or handbags at most, between a few bosses. Some are saying that prices are needing to increase and others are saying that they can afford to grow (ie undercut others).

Now it is ironic that some of those bleating about increasing prices have been the worst culprits for undercutting over the past three or four years. They must be hurting more than most and their shareholders or boards have told them in no uncertain terms, enough is enough.

So, we will have to sit back and see if they hold their own. If they say prices need to increase, then they need to increase their own first, but, we are not seeing this yet.

One of the issues that we, as a business insurance broker, face is that we may sell a policy which a customer feels should cover everything.

I remember years ago, hearing an extremely un-professional broker saying to a customer that the shop insurance quote he had just provided, would give “all the cover you would ever want and all the cover you would ever need”.

There is no such thing as a policy that covers everything. There are certain basic principles of insurance. One of these is that an insurance policy should cover you for unexpected events. If you know that something is going to happen, then you cannot reasonably expect to insure against it. For example, if you do not maintain your building, or repair loose slates or tiles etc, then it is reasonable to expect that you will suffer a bigger claim at some point in the future, say for storm damage.

There are other covers, which are not available because it can be reasonably expected, as a business risk, that they will happen. One of these is shoplifting cover. A standard, run of the mill, shop insurance policy will include theft cover. But, to have a valid theft claim, you need to be able to prove that someone broke in, or broke out of the property. Unexplained stock disappearances, such as shoplifting cannot be covered. If you were able to get the cover, what onus is there upon you to prevent theft?

If you knew there was a policy in place, then you would not need to take any steps to prevent theft. So, the retail industry and comercial insurance companies have accepted that this is not cover that can be provided.

The Financial Services Authority, which in the middle of 2010, still controls the business insurance industry, states that we have to provide full information to customers, prior to any sale. The scenario mentioned above, will not happen again, because you have to receive, within 30 days of the cover starting, full details of your policy cover with exclusions, limitations, conditions, warranties and excesses.