Archive for Contingency Insurance

Making Business Insurance Decisions Easy for Business Owners

Decisions, Decisions, Decisions. If you are starting out in business or reviewing your initial company procedures and processes you will be faced by an endless choice of decisions to make.

Whilst the potential rewards of running a successful business drive them onwards, there are many challenges faced by small business owners, especially during the initial outset of the business when methods and procedures are being put in place. None more so when trying to navigate through the vagaries of business insurance risks and covers, which vary widely depending upon the type of business you engage in.

So where do you start to try to understand the risks that your business might face and the types of insurance that are available to protect your business from these risks?

Fortunately this has been recognised by specialist small business insurer, Hiscox who understands that business owners want to focus on what they do best – running their business.

So they have created a Business Insurance Decision Tree in the form of an infographic to help steer small business owners through the different types of insurance available to them.

The Hiscox Business Insurance Decision Tree looks at variables such as whether you work from home or in an office, how many employees you have and what type of property you own, suggesting applicable cover which best suits an SME’s (Small to Medium Sized Enterprises) needs.

So whether it is office contents insurance for damage to property, employers’ liability for those with employees, professional indemnity insurance when offering advice, or public liability insurance, the Business Insurance Decision Tree can help clarify which insurance is suitable.

The Business Insurance decision tree

The Business Insurance decision tree makes getting the right cover easy! Click to view

Hiscox SME Underwriting Manager, Deepak Soni, comments: “SMEs are experts in their area, but we don’t expect them to be experts in insurance, that’s what we are here for. No two businesses are the same, so the Business Insurance Decision Tree is a useful tool to help SMEs understand the risks they face and get the right cover in place.”

Specialist Home Insurance is often Cheaper!

It’s that time of year again when frost and ice damages your property and your home is at higher risk to fire and pre Christmas theft!

Home Insurance has really suffered during the recession of the last two years as homeowners have cut out what are often mistakenly seen as marginal expenses. Consequently the potential market is larger now which explains the plethora of Home Insurance ads you see on TV all day long at the moment!

Wherever you live, you should have protection for your buildings and contents and this is of particular importance if you have invested a lot of time and money in your home. In this case you may be much better off if you visited an online specialist home insurer, who can provide you with a range of quality policies to choose from, which will protect ALL of your property.

Specialist Home Insurance is often cheaper if you have own a non-standard construction property which includes a range of covers for buildings of thatched and stone construction through to blocks of let flats. You should also consider going to a specialist home insurance broker or provider if you own a large multi bedroomed house or have specialist contents insurance requirements.

For home owners in the UK, purchasing the best insurance cover is of the most significance. Lots of people individuals, even so, usually do not take the time to examine the terms and conditions proposed by the home insurance policy they buy from a price comparison website. These same persons often realise too late, that their cover is not enough. This is most often the case for those who are in possession of high value homes.  Below is some detailed information about ways to provide proper coverage for a high value home with specialist home insurance.

Specifically What is a High Value Home?

High value homes are buildings which, for a variety causes, retain a worth superior to a typical home. Your property is apt to be though of as high value when the price of rebuilding it should surpass £200,000 or if the contents of your house are assessed for over £40,000. Before acquiring coverage, it’s always a good idea to have your house and contents valued by a skilled appraiser. Only then can you be positive that your cover is sufficient.

The problem with Standard Home or Household Insurance

Most house insurance insurance policies are designed with an average policy holder in mind. The cover assumes a typical family size of 2 to 4 that owns a 3 bedroom residence. While this variety of cover may possibly appear to be relatively inexpensive, there is certainly a reason. These kinds of policies usually have a range of restrictions and exclusions that can prove disastrous if you have a significant loss or claim. …..

Usual Exclusions Established in Standard Home Contents Cover

The upper limits of a standard contents coverage can be too low, meaning that you’re considerably under-insured. In addition, the single object limit on this sort of policy not likely to denote the worth of things in your home, such as jewellery, antiques or paintings. In numerous insurance policies, the single merchandise restriction is as little as £1500, a sum that may possibly not be ample for many high value products. Even when you are able to obtain cover, the Insurance company may possibly enforce severe (and costly) protection conditions, for example mounting new window and door locks, or even an entire alarm system. If you don’t follow these terms, the insurer may repudiate any claim.

What to look for in High Value Home Contents Cover

Lots of high value cover policies offer a set of additional benefits that can be really attractive. For example, your policy may contain legal protection for both you and your family. Yet another quality to seek is “agreed value” cover for high value objects. In this sort of cover, you and the insurer are in agreement on a particular amount of coverage for certain sole items, usually jewellery, fine art or antiques. Then there is “new for old” cover in which the value of articles misplaced or spoiled isn’t reduced, which means that you get the complete value of an insured item and not a proportional amount of it’s current value.

Finally ensure that you read carefully and understand your specialist home insurance policy conditions for high value articles, both in blanket coverage and single article cover.

Business Insurance: Business Interruption Cover Explained

Business Interruption Insurance is usually sold as part of a Commercial Insurance combined policy or package and provides a layer of insurance against not being able to trade following a claim.

In addition to the physical loss of the claim, the financial loss to the business stemming therefrom needs to be dealt with by an interruption policy.

Formerly called ‘consequential loss’, ‘loss of profits’ and/or ‘profits insurance’, which can be misleading terms, the protection granted is in accordance with a policy formula, i.e. rate of gross profit applied to the reduction in turnover of the business in consequence of an insured peril, together with the increased costs to minimise an aggravated loss (but not exceeding the loss so saved) arising within the maximum indemnity period (as selected to be insured).

Provision is made for the accountancy definitions and the business, the premises and the insured to be defined. In any claim, adjustment can be made to the precious financial account figures so that the loss is in respect of the ‘would have been’ results that would have applied if the damage had not occurred.

The perils insured (for which there must normally be counter-part physical damage cover) can extend to include those normal to property insurances and such special perils as failure of public electricity or gas supply, loss from infectious disease for hotel and similar trades, or electrocution of cattle in farming risks.

Machinery breakdown covers can usually be arranged on selected plant. Advance profits covers can be arranged for new ventures and these may include marine transit risks.

Provision can be made, with first-loss limitations applying, to extend interruption insurance to protect the financial trading of the business following damage to other people’s premises (those of suppliers, subcontractors, customers, etc.) and in transit.

It is normal, in the current economic conditions, to insure 100 per cent of the remuneration of all employees at a reduced-rate level, but more employee cover can be arranged in this respect in suitable cases. This limited cover is largely a ‘social’ protection to staff and their retention after a loss is thus safeguarded. While savings can be made by non-replacement where employees leave, the cover is not on the basis of the insured having to minimise the loss by dismissals.

The indemnity period, usually at least 12 months, is the limit up to which the recompense under the policy continues. It needs to be sufficient not only to restore the physical equipment and buildings but to allow turnover to reach the ‘would have been’ level. The sum insured is the forecast amount (including a margin to avoid under-insurance) that might be at risk for the 12 months from the end of the renewal period of the policy. Where the maximum indemnity period insured exceeds 12 months the figure is then proportionately increased. The premium is adjusted normally only to the extent of over-insurance.

For the small and medium-sized businesses, it is now possible to buy Commercial Insurance on what is termed a declaration basis. The cover may or may not include a maximum sum as a limit, but there will be no reduction applicable in the event of under-insurance (or a high sum insured limit is applied to avoid this); the premium is adjustable on the annual declaration,which must be received in a limited period from the end of the insured’s financial year.

The cover automatically provides for the cost of auditors in preparing financial details from the accounts, but not for the preparation of the claim itself.

It is often found that consequential losses will arise such as liquidated damages, above-economic increases in cost of working, deterioration or wastage of undamaged stock, etc. special items can be added to deal with these exposures. This section has indicated the need for individual review when arranging an interruption insurance and for the policy accountancy definitions to be suitable to the system of accounting adopted.

A further form of special cover called ‘book debts insurance’ provides for the loss flowing from the un-8urecovered monies from trading prior to the damage through the destruction of the account records and the inability to collect the outstanding debts. The essence of the insurance is the monthly declaration of outstanding book debts, which serves as a datum against which after damage the shortfall in recovery of book debts can be measured. A low rate is involved and the degree of duplication, protection of the records and sum insured determines further reduction to it.

It is in the field of interruption insurance that the importance of the assistance from loss adjusters and others arises, since as witnessed in the spate of recent natural disasters that have occurred, much can be done in emergency conditions to minimise the potential loss.

Business Interruption Insurance is today available on-line and is included as standard in all Commercial Insurance package polices. For larger business risks it is advisable to approach a specialist insurance broker direct.