When looking at your cash flow and expenses, business insurance premiums can be costly, especially after you add up all the other costs associated with running a small business. There are many types of business insurance cover you can buy to improve your business resilience. Some you are legally or contractually obligated to hold, such as commercial motor insurance or Employer’s Liability, while others can offer added peace of mind.
Just like your home or car insurance, shopping around for the best deal may help to reduce how much you’re paying in premiums and the overall cost of your business insurance. However, before you simply pick the cheapest option, it’s important to make sure you have the right cover for your business as well. This can vary depending on your industry, size and operations.
The cost of doing business crisis and hardening insurance market means it’s more important than ever to ensure you’re getting the best deal for your business. Experts from FSB Insurance Service share five key questions you can ask yourself to make sure that you’re protecting your bottom line - and your business.
1. What does your insurer need to know?
The amount you pay for your insurance policy is based on several factors, like the type or amount of cover, any previous claims, or the excess you choose. When you’re getting a new insurance quote or renewing your existing cover, give as much detail as you can and talk about what your business does. Keep it accurate and factual, and don’t forget any changes you’ve made to your business model recently, like hiring staff or moving into a new space.
If you’re just getting started, our handy guide to setting up business insurance walks you through the entire process. Different insurers may require different information but take the time to get all the relevant paperwork ready so that when you speak to your broker you can give them the necessary information in one call. This will also speed up the overall quote process.
2. What makes you a well-run business?
Showing your insurer that you’re a well-run business with a risk management strategy in place can go a long way towards protecting your business for less. Remember to highlight the areas in your company that insurers would like to hear about, for example:
- How do you manage health and safety in your business? From risk assessments to policies and procedures for your employees, make it clear how you identify and mitigate risks in your business.
- Have you or your team undertaken any training? Training courses don’t just help with skills development and legal compliance – they may also contribute towards reducing your premiums. CPD certified training, whether it’s food hygiene or fire safety, demonstrates your commitment to creating a safer work environment.
- Do you have a Business Continuity Plan? Creating and regularly reviewing this document can help you to prepare for the unexpected and minimise disruption to your business if the worst should happen.
- What security measures do you have? This could range from alarms and CCTV cameras in your premises, to data privacy policies and anti-virus software.
3. What protections have you put in place?
If you’ve had a claim in the past, explain the steps you’ve taken to make sure that it won’t happen again. Preventative measures could include:
- Extra flood protections, for example, flood-resistant property upgrades, moving essential business equipment to a higher level, or preparing a flood plan
- Implementing additional security throughout your premises, such as locks or cameras
- Resilient repairs, like moving electrical sockets higher up a wall or installing floor tiles instead of carpet
4. Could you consider a higher excess?
Arranging to pay a higher excess means that you would pay out more in the event of a loss to cover the damages before the insurer pays the claim. Think carefully about the level of risk you’re prepared to take on. It’s always best to get professional advice on this and a good broker will be able to advise you.
5. Are you getting the right cover for the right price?
“There’s no point in going cheap on business insurance if your claim won’t be paid,” advises David Perry, Chief Executive at FSB Insurance Service. This is known as underinsurance, and it’s a growing problem as businesses face increasing costs and supply chain disruption. Don’t forget to review your policies when they’re up for renewal, too.
Ultimately, getting advice from an insurance broker is the best way make sure you’ve got the right protection for your business. FSB members can register with FSB Insurance Service and access a free insurance advice line.
FSB Insurance Service Limited is authorised and regulated by the Financial Conduct Authority (FCA Registration No: 788654) Registered Office: 20 Fenchurch Street, London, United Kingdom, EC3M 3AZ. Company Number: 10831