All types of insurance have certain terms and conditions. One of the standard terms applying to a policy is that there is usually an excess applicable. The excess is the amount that you, the policyholder, either have to pay or have deducted from any claims settlement. When looking around for a business insurance quote, you really have to read through the small print to see what the excess levels are and whether you are happy with these.
Many different types of business, such as shops, takeaways, restaurants and hairdressers are sold a "package" policy. This includes the different types of covers that you would ordinarily require. These include commercial building insurance (if you own the structure), contents and stock cover and products, employers and public liability insurance.
The problem is, that most insurers policies are only different because of the excess levels. For example, you may receive an excellent quote, by price. But, when you consider the amount you have to pay it can make the quote prohibitively expensive. Many insurers have a standard 100 GBP excess for shop front glass. A few though increase this to 500 GBP, each and every claim! A couple of smashed windows in any period of insurance and your cheap quote has cost you 1,000 GBP in excess payments.
Your broker is obliged to point out any onerous terms. In addition, they need to send you a full written quote. The first thing you should look at is not necessarily the price but the terms. If the quote is unclear, or very lengthy, then speak to your broker and ask them to confirm in writing to you what the excess amounts are.
When you see them, in black and white, then sit back and compare to the premium. A saving of a 10 or 15% between quotes is not always that much when you look at the fact that a least 1 in 7 policyholders will claim in the first two years of trading. Everyone knows that if you look long and hard enough you can always save money. But, the other thing we also know is that you only get what you pay for! So, you should be looking for an excess of around 200 GBP to 350 GBP. Any more and you start to move into expensive territory.
This does not apply to subsidence, heave and landslip. This is an extension to commercial building insurance (i.e. cracking of brickwork). These claims are rarely small and all insurers have a minimum excess of 1,000 GBP, rising to 2,500 GBP in subsidence prone areas. Any more than 2,500 GBP and you should look around for an alternative, unless the property has previously suffered a claim
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Paul Roach has many years of experience in business insurance. For more information he recommends you visit this website on small business insurance |