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A brief guide to arranging business insurance

Does the idea of arranging business insurance seem like a daunting task? Are you confident that you’re adequately insured?

Insurance is an important part of any business, and it’s the foundation of a solid Business Continuity Plan, or BCP. A BCP is the process by which you really get to know your business, and plan for the future, so that whatever life throws at you and your business, it can be possible to weather the storm and survive.

Although insurance is often seen as a purchase motivated by negativity, because the benefits often don’t become really apparent until disaster strikes, it can give you the peace of mind to get on with your day, safe in the knowledge that your business is secure.

A brief guide to arranging business insurance

Legally required insurance for businesses

Most insurance cover that is a legal obligation will come with a certificate of insurance, which you are required to keep as proof of cover for at least five years.

Examples of possible legal requirements related to your insurance:

  • If you employ any staff, you are legally required to hold an Employer’s Liability policy. Employer’s Liability covers your legal responsibility for the safety of your employees, and should they be injured and awarded damages, Employer’s Liability will cover this cost.
  • Motor Insurance for any motorised vehicle that runs on a public highway (must cover third party property damages of at least £1 million under the Road Traffic Act).
  • If you have plant and machinery involved in your business it legally requires an engineering inspection, covering items such as forklift trucks, lifting tackle and pressure plant.

Certain insurances are a contractual requirement, such as insuring a building on behalf of your landlord, or holding a public liability policy when working for third parties. This is very likely to come up if you are bidding for a public sector contract as a service provider.

Beyond legal duties, it’s also important to consider what else you may need insurance cover for to make sure you’re not left out of pocket should a loss occur. As a business owner, you may want to consider cover for your building, contents and other liabilities. It is often useful to discuss your individual business circumstances with an expert small business insurance broker so they can advise you.

Ways to reduce your insurance premium

There are a number of ways you may be able to reduce the premium of your insurance policies. Some insurers may be happy to reduce your premium if you have suitable risk management strategy in place to help protect the business. Again, this is something an expert insurance broker can advise on. It may also be possible to arrange to pay a higher excess that will reduce your premium, which would mean you pay out more in the event of a loss to cover the damages before the insurer pays the claim.

It is worth discussing this with your broker or insurer and finding out what options are available to you.

Ways to purchase insurance

There are a number of ways to purchase insurance. The internet has revolutionised how the industry operates, especially for self-service users purchasing directly from insurers.

There are three main channels you should be aware of for purchasing insurance: aggregators, brokers and direct insurers.

Aggregators are common for personal insurance such as private motor or home and contents insurance. Aggregators don’t sell insurance themselves, but provide a way to get quotes from multiple insurers in one go.

The drawback of aggregators, especially for commercial and business insurance, is that they require a limited, set number of answers to questions which, although may be enough to get a quote, may not create an accurate picture of your individual needs.  Aggregator sites are only able to provide ‘non-advised’ sales within limited insurance markets. With anything more complex you may struggle to get the right cover through an aggregator.

Another way to purchase insurance is through a broker. Insurance brokers liaise between the customer and the insurer, making sure the customer’s needs are met and assisting them in the case of making a claim. A broker will make sure the required information is communicated and may be able to provide quotations from multiple insurers. Brokers are also sometimes able to provide discounted premiums through their relationships with individual insurers.

Insurance can also be purchased from direct insurers which, as the name implies, sell direct to customers. However, with this method, you will only be able to purchase an ‘off the shelf’ policy and not one that is tailored to your individual business circumstances.

How can FSB help with insurance?

The new FSB Insurance Service (FSBIS) has been created by FSB, for FSB members, and is owned by FSB. With an emphasis on providing outstanding customer service, the team’s expertise can advise FSB members on a whole range of insurance issues, as well as on business continuity planning, and assist them in finding the most appropriate cover at the best possible terms.

FSB members are able to register with FSB Insurance Service at no cost and will have access to a wealth of services and assets, including the insurance advice line.

FSB Insurance Service from FSB

Hassle free - a dedicated team removes the hard work of searching for insurance, we work as a broker to find you a policy for your circumstances.

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