What your insurance broker wont tell you…

  1. Shop around?
    The standard “tip” from ill informed financial commentators. This
    assumes you are fully au fait with the intricacies of your insurance
    policies and will be able to spot what’s missing from the alternative
    quote that’s 10pc cheaper. Instead, get your broker to supply an
    English translation of your cover and at least two other quotes.
    They’ll soon get the message.

  2. Increase your Excess.
    For most businesses a £500 excess should be the minimum. It’s too much
    hassle to claim for much less than this, so why not get a 10pc discount
    by increasing this to £1000?

  3. Insure average Stock holding, not a peak figure.
    Many firms have seasonal fluctuations in stock holding yet insure for
    the peak reached once or twice a year. Talk to your broker about
    monthly declarations -you only pay 75pc of your premium up front as
    well.

  4. Get a rebate on last year’s premium.
    Premiums for various insurances, for example Liability and Transit, are
    based on projected figures. If these figures were set in more
    optimistic times then returns of premium are available. If you’ve done
    better than you thought – keep quiet!

  5. Don’t pay “admin” charges.
    Many brokers, despite a healthy income from commission, now charge you
    for the privilege of doing business with them. These charges are not
    compulsory – refuse to pay. Does the broker want your business or not?
    There are plenty of others.

  6. Question “add ons”.
    Many brokers are charged with selling additional products to boost
    income. Do you really need these extras? Ask your broker to explain why
    you suddenly have a need of this wonder product and why the need wasn’t
    there last year.

  7. Inflation protection.
    Year on year, your Insurers will have increased sums insured by the
    perceived annual rate of inflation. Good idea, except that the
    replacement cost of computers is reducing and firms are generally
    trying to hold less stock. Review these items and also the extra cover
    you may have inadvertently bought to protect against inflation of 30pc.
    If such a clause is in your policy you will have been overpaying for
    the last 20 years.

  8. Review schedules.
    We used to think mobile phones and laptops were quite exotic items and
    expensive to replace. We’ve lost count of the number of schedules we’ve
    seen with listed items worth £200/£300 and an excess of £250 AND a
    premium.

  9. Money.
    Other than shops, the only money most businesses have is petty cash. Any point in paying £150 to insure £100?

  10. Small print.
    Get your brokers to identify and translate relevant clauses and
    conditions hiding in your policy. If you’ve missed one, it’ll cost you
    dear in the event of a claim.

These measures are guaranteed to reduce a commercial insurance premium
by at least 10pc which, for even the smallest business, could amount to
several hundred pounds.

By Danny Cooper
The Insurance Manager Ltd

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