Our columnist asks: When did you last fully review your insurance arrangements?
New Year Review!
As the new year is now well under way and those resolutions feel like a dim and distant memory, our focus moves onto the year ahead!
While you may be reviewing things within your business, it can be worth considering when was the last time you fully reviewed your insurance arrangements?
SME businesses are generally pretty dynamic places with lots going on, however from experience we often find that insurance policies are left to roll over, year-in and year-out. This can result in the insurance not keeping pace with changes within the business and, in the worst case scenario, result in claims not being paid and policies becoming pretty worthless.
Following the implementation of The Insurance Act in 2016 you now have an ongoing duty to disclose anything about your business that the underwriters could deem to be material to the risks they are insuring. They have also amended their policy wordings, giving them the ability to amend or void your policies if they later find out something which you should have disclosed.
It is therefore incredibly important that your insurance provider fully understands your day-to-day business activities and any plans you have for the next 12 months. This can have a particular impact on your liability insurances and will influence which insurance company is most appropriate to cover your requirements.
In addition to reviewing your business activities, it is also important to undertake a thorough review of your business assets whether in respect of building, contents, machinery or stock.
As a business owner it is your responsibility to insure your assets for the correct replacement value, so as to avoid any underinsurance. Most insurance policies contain what is known as an ‘average condition’ which means that any claim will be reduced in proportion with the scale of any underinsurance. As an example if contents should be insured for £100,000 but you have chosen to insure them for £50,000 the insurance company will only pay 50 per cent of any contents claim.
We would therefore recommend meeting with your insurance broker at least once a year so that they can fully understand your business activities, asset values and plans for the future.
In addition, it will be worthwhile for you to show your broker around your premises so that they can see what you have and ask the appropriate questions. If you have a longer-term relationship with your broker they will also be able to spot if there have been any significant changes since previous years.
If you would like any additional information or if you would like an independent review of your insurance provision please don’t hesitate to get in touch.
