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UnderinsuranceSmall and medium sized businesses need commercial insurance to cover their premises, contents, machinery and equipment. If you are sourcing your business insurance online and your only consideration is to minimise the cost of the premium, you may find that your insurance cover leaves you out of pocket if you need to make a claim.

Underinsurance is a common problem. 40% of businesses do not have enough business interruption cover to get them back on their feet (Building Cost Information Service 2012).

Rebuilding costs
The sum insured should take account of the actual rebuilding costs, not the market value. Depending on the type of property, reinstating the building back to a useable position following an incident may cost more than you think once you include materials, labour and professional fees, not to mention loss of earnings during the rebuilding period. In 25% of SME claims reviewed by the FCA, the indemnity period expired before they returned to a normal trading position (FCA thematic review of SME claims TR15/6 2015).

Business interruption insurance
The consequences of an insured incident could result in reduced or complete loss of income from your business for an unknown period. It is therefore important to check how long the indemnity period is on your insurance policy. Two years is likely to be needed for a business to fully recover to its original trading level.
These calculations can be complicated, considering all of the eventualities that could delay getting your business back up and running; for example, delays in planning permissions when rebuilding, long lead times for replacing stock or machinery and replacing customers lost due to downtime.

This is where a broker can offer their expert advice. Depending on your business circumstances they may suggest a declaration-linked, non-average basis of insurance, because it provides an uplift of 33% providing that the sum insured is correct initially and declarations are made when requested by insurers. Alternatively, a policy that is based on the estimated amount of gross-profit or revenue that you expect to earn.

Legal liability claim
Claims against your business can come from a variety of risks and insurance is designed to provide adequate levels of cover of usually £5 to £10 million. The types of cover to consider include:

  • Employers liability
  • Public and products liability
  • Directors and officers liability
  • Cyber threats
  • Environmental liability
  • Professional indemnity

You will have to assess the risk levels within your own business to determine whether the level of cover is going to be enough for your individual circumstances.

Benefits of using an insurance broker
Insurance is complex and it is not easy to assess all of the risks associated with your business and to select the most suitable insurance policy to meet your needs. Get it wrong and you could jeopardise the future of your business.

An insurance broker will be able to offer advice and select the most suitable policy for your business. They can arrange accurate valuations to ensure you have exactly the right amount of cover in place when you need it.

The UK’s future economic success could well lie within the stomachs of its people!

The food sector is undoubtedly “fattening up” and putting on the £s.

Food retailers Lidl and Asda have announced that between them they are hoping to create 14,500 new roles.

Meanwhile, UK restaurant chain Pizza Express has been bought out by a Chinese private equity firm (Hony Capital) for £900m. Expansion in to Asian is now high on the agenda.

In the first part of the year, over 18,600 new jobs were created in the UK food and drink sector as a whole, compared to 6,188 jobs lost.

North West based bakery Warburtons reported an impressive 52% increase in operating profit after diversifying and expanding its range – despite a 8.5% rise in the cost of raw materials.  It cites keeping up with consumer trends as the key to its success – including a £20m expansion at its Burnley factory to produce wraps and “sandwich thins”.

Melanie Leech, Director General at The Food and Drink Federation, has been quoted as saying: “Food and drink manufacturing is a great British success story and, throughout its history, our industry has embraced new ideas which have transformed consumers’ lives.”

Food_processingAccording to industry pundits, food and drink companies in the UK – manufacturers,  wholesalers, distributors and retailers – all have similar needs when it comes to cashing in on national and international success – help with export promotion, industry-led skills strategies, resource efficiency and resilient supply chains.

One business area insurance brokers can help with is ensuring you have effective cover to protect you against breaks in supply chains.

We can also provide peace of mind on many other risks within food and drink manufacture, wholesaling, distribution and retail. This is an age of complex regulation and legislation and consumers itching to “sue”.  You could be one bad meal away from a big problem for your business.

Local independent insurance brokers like CLA will look at all aspects of your business, making sure your policies, levels of cover and claims are all balanced and sustaining.

PartyHeadlines about fist fights at weddings and the rise in accidents due to binge drinking don’t make happy reading for the managers and owners of hotels, restaurants and pubs.

Venues get sued “at the drop of a hat” and the pressure cooker work environment means staff injuries are increasingly common
for even the most careful employer. Yet this high risk sector could well be one of the worst at understanding the “claim game” according to some pundits.  For example, Carlton Town FC had a £9,000 insurance claim turned down after a break in at its club HQ. A superstorm in the USA left hotel owners reeling when hundreds of business interruption claims were refused as “your property did not sustain any direct physical loss or damage as a result of a covered peril.”

Do you know how to protect your business? We do, as we have worked in this industry for many years, tailoring insurance policies to hospitality venues of all shapes and sizes.  You are in a unique and complicated sector and you could be paying for cover you don’t really need. Worse still, should you need to make a claim it could be refused because of tangled small print.

One of the most common claims on insurance policies for your sector is injuries to staff. Employee Liability cover is necessary by law, but are your limits set correctly?  It doesn’t take much to interrupt business at a hotel, restaurant or pub – a broken freezer, flood damage, and claims for infestations of bed bugs are not just confined to lower budget accommodation. To properly understand the risks you face, the best way to protect yourself against them and the most direct routes to successful claims, you need good advice from an independent local insurance broker.

The local bit is important to the hospitality trade, as the challenges you face may well depend on where you are located. Without this specialist knowledge and tailored cover hospitality facilities can find themselves underinsured, or even uninsured. Correct levels of employee, public and product liability for venues with high footfall and serving alcohol could mean the difference between staying in business or not.

But it is an industry prone to improper values on buildings, contents and equipment too. Does your cover take in to account all aspects of your business, including food service, function rooms, children’s play area and computers used to store vital guest details? You may need to be extra vigilant to insure your insurance cover includes loss of licence, economic loss arising from criminal or fraudulent conduct or personal effects and valuables.

These are the industry specific concerns and risks that we understand. A local independent broker like us can be responsive to your changing needs too, for example seasonal fluctuations in staffing levels, occupancy and stock kept on the premises.  Having someone close at hand that understands your sector means you don’t get bogged down in hours of research and the headache of making sure all the information you collate is appropriate.  And if a claim has to be made, we take personal responsibility for progressing it as quickly as possible.

We take on the headaches, to leave you to do what you do best – run your premises.