As an insurance broker based in Somerset, we enjoy the opportunity to talk to businesses throughout the South West. When we talk with potential new customers, apart from obtaining competitive quotes and advising on the most suitable cover, we also review and report on the current programme of cover in place. Call us pedantic – but we regularly uncover a few issues. Here are the most common:
- Incorrect Gross Profit Sum Insured. An insurer’s method of calculating Gross Profit is different to an Accountants, and commonly we find the wrong method used which could leave a business seriously underinsured in the event of a claim
- Inadequate Business Interruption Indemnity periods. Some businesses still only insure for 12 months which we feel in most cases will be inadequate. Remember, the indemnity period should represent the maximum amount of time your business will need to regain its pre loss financial position.
- Policy conditions or warranties which are overly onerous, inappropriate, or have not been made clear to the policyholder. A breach of these conditions could mean no cover in the event of a claim – it couldn’t be more important! Whilst the new Insurance Act goes some way to help policyholders’ position, this is still an important consideration.
- Incorrectly calculated property sums insured. Most sections of cover under the property section of a policy will be on a reinstatement basis – new for old if you like. This means that when you calculate your sum insured you should use the new replacement cost rather than the current value. If you don’t get it right insurers can reduce the amount they pay you in the event of a claim.
- Uninsured covers. It’s important that a business is aware of the risks they face which is not currently insured. Common areas which business can be unaware of are Directors and Officers Liability, Fraud and Crime Insurance, Environmental Liability and Cyber cover.
It’s your insurance broker’s job to help you get this right – if you are not getting the right help give us a call.