Insurance checklist – Introduction
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When it comes to insuring your business, it’s important to get the right cover with the right company for the right price.
Some business owners may not see the point of having insurance cover but they may learn the hard way if their business is affected by fire or flood.
Insurance should cover every part of the business from premises to machinery and computer equipment. Think of every aspect of the business and if this was affected, would your business processes be able to continue in the normal way?
This guide was assembled by Cumbria Business Link and contains information from Morgan Clark Claim Consultants. It details the priorities for action in the event of a loss as well as top tips for insurance cover. Visit the Morgan Clark website to learn more about insuring a business. (www.morganclark.co.uk)
Priorities for action in the event of a loss
Fire – flood – storm – impact
- Don’t panic! Don’t appoint any professionals who come offering their services in the immediate aftermath of the incident
- Notify your insurance company or Claim Consultant immediately
- Allow yourself some time to calm down before answering any questions from insurers or their representatives (what you say and do in the early stages of a claim could prejudice the outcome)
- Seek professional advice before making/signing any witness statements
- Take photographs and keep a record of everything that happens (do not dispose of or move anything until advised to do so by your Claims Consultant)
- Secure the site (NB smoke and soot is corrosive and damaging to health; consider all floodwater to be contaminated)
- Take action to mitigate your loss e.g. have engineers clean and protect machinery to prevent damage from soot corrosion; move undamaged property to an area where it cannot be damaged by floodwater
- If your insurance company appoints forensic scientists to examine the site, do likewise
- Retrieve all insurance documentation and supporting evidence that will be required to substantiate your claim
Make sure you are aware of any/all policy conditions and warranties you must comply with.
Top tips on getting your insurance cover right
Buildings cover
- Consider the cost of completely rebuilding your premises, including costs for demolition, planning and professional and local authority fees.
Contents, fixtures & fittings and stock
- Ensure sums insured are based on current costs to replace items, not what you paid for them or their book value.
Business Interruption (BI)
- Make sure you have material damage cover in place. Without it you have no BI claim
- Ensure your insurance policy is declaration-linked. It can eliminate the risk of underinsurance
- Make sure you know the policy definition of gross profit and calculate the sum insured accordingly
- Remember that a loss could occur on the very last day of your policy. Don’t forget to look ahead far enough when setting the sum insured
- Don’t underestimate the time required to rebuild lost custom and/or reinstate property, specialist machinery etc. (err on the side of caution when selecting the appropriate length of the indemnity period)
- If there are seasonal trends in your business, check that your broker has taken this into account
- Ask your broker about the benefits of additional cover for “Increased Costs of Working”
- Make sure your policy recognises the interdependence of various locations along your customer/supply chain
