Business insurance can be a minefield, so it is important that you know what your exposures are and how to manage them. Our sponsors TechInsure explain this in more detail in this week’s blog.
The different covers available
When it comes to insurance, there are plenty of different types of covers available. To start off with, here are the main types you need to be thinking about:
Property damage for losses to buildings, machinery and plant, office machinery and contents.
Business interruption for financial loss as a result of damage to your property causing an interruption to your business.
Employers’, public and product liability for claims brought against you by employees or third parties for injuries or property damage.
Professional indemnity for claims brought against you for breach of contract, negligence, transmission of viruses, defamation or infringement of intellectual property rights. It provides cover for errors and omissions, breaches of contract and financial loss. Therefore, if you are providing advice, training or involved in design then we would recommend you purchase this cover.
Management liability including directors’ and officers’ liability, corporate legal liability and employment practices liability to cover claims or investigation against individuals or the company and employment tribunals.
Intellectual property insurance provides cover for your defence and pursuit costs in respect of intellectual property litigation/disputes and breach of licence agreements.
Cyber liability provides protection against the consequences of a cyber-attack or data breach.
What are the compulsory insurances?
Employers Liability Insurance is required by law (under the Compulsory Insurance Act 1969) if you run a business to provide cover in the event that one of your employees is injured or becomes ill as a result of working for you.
All drivers are required by law (under the Road Traffic Act of 1930) to have in force an insurance policy to cover their liability for bodily injury to or damage to third party property which arises from the use of a motor vehicle.
Although not a compulsory cover we would highly recommend that most businesses also purchase this cover.
Should you buy direct or via a broker?
Contrary to popular consumer belief it has been found that broker pricing was actually better than direct insurance pricing.
The reason for this seems to be principally due to insurers providing different rates to brokers, in order that premiums are lower. Why would insurers provide special broker pricing? Simple: because the risk is lower for the insurer. Brokers are professionally trained to choose the right policy for their customers, therefore avoiding unnecessary claims while maintaining the correct premium income.
Whilst the online experience usually proves more pleasant than the phone, most brokers offer an online service, and are far more pro-active after they receive the initial quote request from the customer, often answering queries by personal email or call and helping to reassure customers with a human service. Furthermore, most direct services completely fall down when queries or changes are required that are less common, particularly later in the policy life cycle.
In the case of the time taken to generate initial quotation figures, direct services are consistently very quick, while brokers answer quote requests by personal follow up.
The difference however is somewhat reversed when it comes to mid-term changes, documentation requests and one off queries. The direct services often fall back to large call centres whose staff have little or no real insurance knowledge. In this area brokers are more efficient, making suggestions that consumers find highly useful, saving them lots of time.
Peace of mind that everything is covered
Brokers are professionally qualified and trained to guide the customer through the purchase of their insurance taking the time to understand the risk presented and ensuring that your exposures are fully covered.
Direct insurers put too much focus on the consumer doing the work themselves and are therefore unable to match the service level provided by brokers.
Our recommendation to all would be to use a broker, let them shop around for you, and you will likely reap the benefits of their knowledge, whilst knowing that the correct covers are in place.
This blog was sponsored by TechInsure. You can content them via their website or by calling 03330 43 11 33.