The thing with commercial insurance is that some people don't normally start off by saying this is something they want. They consider first of all whether it is something they are legally obliged to have. This can be a sensible starting point. In an effort to keep costs to a minimum you only arrange policies for the insurance cover you are legally obliged to have.

In the UK, this is usually limited to vehicle and employers liability insurance. But, sticking to just what is legally required does expose your business to some serious risks. There is no requirement to arrange commercial property insurance, but in the past 8 weeks we have seen a substantial increase in water damage claims from defrosted burst pipes to buildings. Not one of the claims we are dealing with is less then £10,000.

So, you don't have to arrange the cover but which commercial landlord really wants to foot a £10,000 plus bill in the winter? What you do need to do is to seek some professional advice. There are over 2,000 business insurance brokerages in the UK, every one of them is able to provide you with free advice as part of their quote process.

When it comes to commercial liability insurance, many businesses are asked to prove cover as part of a larger contract they are taking part in or tendering for. They don't have cover in place and call us for a quote. We do tell them that, under UK law, there is no obligation to have a combined policy which includes the three liabilities, employers, public and products. The key is though, that a sensible and prudent business will of course have these covers in place as a minimum.

This way the business is protecting itself not only from valid insurance claims but also from the spurious ones. The UK is becoming more litigious, it is easy than ever to submit a claim against someone else or another business. Just because someone makes an allegation against you (that you have damaged their property or injured someone) it does not mean they are right.

It is not unheard of for a claim to be submitted for a few thousand pounds, in the knowledge that the insurers will simply pay out because it is cheaper than paying the legal costs to fight it through the courts. Many businesses do not know that even if they have the most outlandish claim made against them, they can simply past this onto insurers to deal with.

It all boils down to how risk averse you are. No-one, except those that want their business survival to be on tenterhooks, should have a trading business without cover. Free advice from a broker should help you identify exactly what cover you need to have.
 


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