Running your own business comes with many things to think about and yes, we’re about to add one more, but we know it’s an important aspect to look after.
If you haven’t done it already or are considering changing anything on your policy, in this blog we give you 7 reasons to review your business insurance.
7 Reasons to Review your Business Insurance
If you haven’t gone over your policy in a while, here’s a few reasons it might be time to give it a review:
1. You have moved premises or made changes to your building.
How can this affect your insurance?
Your insurance program for the premises you are based at is calculated on the age and construction of the building, security of the premises and in some cases the postcode, not to mention flood, if this is to be included in the insurance program. As there are many rating factors involved, it is best to ensure your broker and/or insurance company knows what your plans are or if you have moved. You need to advise of this as soon as possible to avoid claims being denied due to any non-disclosure issues.
2. You have purchased new equipment or vehicles.
Why can this affect your insurance?
For property insurance, it is important to have the correct values insured. Under-insurance can come back to bite you if there is more equipment onsite than the value it is insured for. With motor vehicles, some policies will allow for a change-over of vehicle that has not been notified and declared, however it is a temporary measure. For example up to 30 days cover may be applied for the new vehicle on the schedule without notification of the change.
3. You have increased stock.
How can this affect you?
Seasonal increases are catered for around Christmas and Easter in a lot of insurance programs, for example a 20% boost to stock levels, catered for in the policy wording. If you are increasing your stock values more permanently and by a substantial amount, it is a requirement to let your insurance broker and/or insurance company know, as any loss could incur a co-contribution/co-insurance or under insurance penalty.
4. You are making more money than you used to.
What impact can this have if not declared to your insurer?
Most public and product liability policies, as well as professional indemnity and goods in transit covers are rated on the exposure that the insurance company has for the amount of work performed and/or the amount of product distributed. Given that this is a key rating factor, the insurance company will want these numbers to be as close to the actuals as they can be. In severe cases, the insurance company will go back over the number of years that the turnover of the business has been misrepresented and ask for a premium per year to make up the difference in estimated and actual income.
5. You have made changes to staffing.
How can this affect in your insurance?
Staff numbers are sometimes used as a rating factor for insurance. For example, a trades policy where the declared number of staff is two and then over the years this increases to seven staff, the way the insurance company calculates their risk exposure can vary greatly. Sometimes simply going over four staff can send the rating factor from staff numbers to turnover rated and therefore the insurance company will always want to know about the changes in staff numbers. Generally, only on a professional indemnity policy where qualifications of staff have been requested and declared, will the insurance company wish to know about a changeover of the qualified employee and seek to have the new employee’s qualifications declared.
6. You have seen an increase in foot traffic.
How will this affect your insurance?
Foot traffic is an exposure factor for any insurer, the less foot traffic the less the insurance company is exposed to slip and fall claims, for example. The need to declare this however, is generally derived from the turnover declaration.
7. You are offering new services.
Why should you tell your insurer?
It is very important to provide your broker and/or insurance company an accurate description of the work you perform or the nature of your professional services. On a professional indemnity policy for example, if the description of the business activities is not accurate, the insurance provider may deny the claim based on non-disclosure or a simple mismatch of the professional services description. Better to be safe and declare all activities than to be sorry later.
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