The news outlets are full of stories about inflation and as business owners we know that the headlines only just scratch the surface. Real-world inflation for businesses is much higher, whether it’s raw material costs, energy prices or the difficult labour market. Unfortunately, these costs cannot just be passed on, with many businesses having to absorb the costs and reducing profit margins.
Sadly, insurance companies are not immune to these same issues. Inflation causes liability claim awards to increase as well as rebuilding costs and the value of assets such as machinery and contents. While your insurance policies will generally be indexed to keep up with these increases, this will filter through to the pricing.
These underlying pressures along with insurance capacity generally being reduced, forcing insurers to increase rates, means that we are in a position where most insurance policies will be increasing by around ten per cent as a minimum. This will be exacerbated where a company is in a high-risk industry or where they have a poor claims record.
In the face of these pressures, how can you ensure that your business doesn’t pay too much for your insurances?
In my experience insurance tends to be the last thing people think about. It can often be neglected and not reviewed properly on a regular basis.
We would therefore recommend a thorough review of your cover, sums insured and estimates as well as reviewing the providers. The insurance marketplace is very dynamic with new providers coming on stream all the time, therefore if you have simply renewed your insurances on the nod for the last three years or more, it’s likely that there could be a better deal available.
If you use a broker, ask them to come in and see you if possible so that they can fully understand your business and discuss with you how they can approach the market to get you the best deal available, whilst also ensuring that cover isn’t compromised.
If you don’t currently use a local broker, why not look up someone in your area or ask your other professional advisers who they would recommend. A broker is best placed in my view to ensure you get the right cover at the right price.
During these times it is also incredibly important that you maintain your focus on safety and risk management within your business as ultimately those with the best claims record will always get the
best deal.
If you’d like any more information on this or a chat about the current market conditions, feel free to get in touch at info@actusinsurance.co.uk.
Sam Leeder ACII - Actus Insurance
samleeder@ actusinsurance.co.uk / 0114 290 3624 / 07718 189476
