11 common issues that are frequently found to cause insurance claim problems

1. DO I HAVE THE RIGHT INSURANCE FOR MY BUSINESS?
Knowing what types of insurance are necessary and the levels of cover required can be a minefield.
The concerns you might have:
 News – increasing levels of crime, riots and flooding
 A friend or colleague’s bad experience
 Your own bad experience
 Will your insurer pay out for a claim?
 Your previous questions or concerns may not have been fully
answered
 You have not felt quite comfortable with the advice you have
received.
Eleven things to check:
This article highlights some critical points to take into account when considering your business insurance.
1. Business Description. It is vital that this 5. The right sums insured – underinsurance is
describes all of your activities so that each of a common reason for claim payments being
them is protected. For example, if you reduced so getting them right is very
manufacture a product but sometimes sell to important. Your insurer will require you to
the public, describing yourself as a calculate your sums insured as follows:
“manufacturer” on your policy is not enough.
If you own a property, you should include Most insurance claims are for partial losses but
“property owner”. as shown in the example below, having the
wrong sum insured can still be costly.
2. Business Locations. Are your business Stock sum insured £100,000
addresses shown correctly on your insurance Actual value of stock £200,000
documents? You would be surprised how often Claim value £20,000
I meet a new client and find they are not. Claim payment £10,000.
(Reduced by a half as the sum insured was
3. Security – many insurers will require you to half what it should have been)
fit certain types of door and window locks and
possibly an intruder alarm system. Are you 6. Geographical limits – do you need any
certain that your locks are the right type? Does equipment to be insured when it’s taken away
your alarm system meet their requirements? from the premises? Examples could be laptop
computers or samples. If you need wider
4. Contents in the Open. If you have protection, is that just in the UK or anywhere
machinery or stock in yards, do you want this in the world?
to be insured? It’s not always automatically
included just because it’s own your land.

2. 7. Loss of Income - Insuring against damage to 8. Liability limits of indemnity. There are
your assets is one thing but what about any many factors that can influence these limits.
loss of profit or revenue? This can lead to a How many people (employees or others) could
whole host of questions: be injured in one incident, an explosion for
instance? How high is the risk of injury? What
a. Does your policy cover your loss of profits are their average earnings? Do you supply
following a fire or storm damage for safety critical products? Do you supply a
example? product used by younger people? Do any of
b. Will it pay out for a long enough period to your business partnerships insist on specific
allow for the time it takes to rebuild and limits?
repair, to start manufacture again AND to
reach the level of turnover you had before 9. Equipment needing Inspection. Some
the damage? equipment may need a regular statutory
c. Are you particularly reliant on the electricity inspection – lifting equipment, pressure
supply or phone links? Would your profits vessels, extraction plant etc.
be affected if they were cut off for a few
days? Does your insurance cover damage 10. Staff travelling abroad on business. A
to the supply right up to your premises or personal travel insurance policy may not
just at the suppliers’ premises? include business trips so your staff may be left
d. Are you reliant on one particular customer without medical expenses protection for
or supplier? What would happen to your example. If they fall ill abroad, only a business
business if they had a major fire for travel insurance policy will cover the cost of
example? sending out a replacement employee to
e. Would a fire at nearby premises restrict complete their work.
your access? What about the loss of profit
you then suffer? 11. Giving Advice. If you are giving advice or
providing a service that might cause a financial
loss to your customer or client, you may need
professional indemnity insurance.
What should you do?
When you are busy running a business on your own or even sharing the task, you cannot really be expected
to think about all these things (and more) when considering what is the right insurance for you, but there
are a few simple steps you can take:
1. Prepare an asset register of all your machinery and contents. This will help to keep track of
equipment, purchase prices and therefore sums insured. That one-off time investment (with
occasional updates) will be well worthwhile.
2. Make sure you do read your insurance documentation and if you have queries, ask your broker.
3. Ask for our free guide to the types of insurance needed for different business sectors.
4. Ask us for a free review of your business insurance.
Call us now for a free no-obligation review – 01527 834696