The things you need to think about when Renewing your Insurance
Towergate Insurance | 13th September 2018
When it comes to renewal of your insurance, our insurance partner Towergate believes it is important that care sector businesses are aware of the things they need to think about to make the right decisions for the protection of their business.
We all know that renewing insurance isn’t exactly a job that you count down the days to. However, with the future sustainability of your care business at stake, it is very important that you spend some time thinking about the different elements of insurance cover and how you can make sure you have the protection you need for your business, while still being mindful of keeping premiums down in today’s economic climate.
We’ve all been there – moving the policy excess up and down on a motor insurance renewal to see the impact it has on the overall cost!
So, Towergate Insurance have shared some insight into insurance cover, and the areas in particular that you shouldn’t scrimp on - and why they ask the questions they do, to ensure their customers have sufficient cover.
The best place to start, they say, is to understand what cover is essential or mandatory – either due to law or contractual obligations.
What is required by law?
You may not be aware that there are only two types of insurance that are required by law. One is motor insurance and the other is Employers’ Liability for businesses with any number of employees. Legally, you are required to have a minimum indemnity limit of £5m, but most insurance brokers would provide £10m as standard as this has a minimal impact on overall premium, if at all.
What do you mean by contractual obligations?
Quite simply, these obligations are typically required by those who have a financial stake in your business, for example your landlord if you rent your premises. They would typically include in your tenancy contract any requirements they have in relation to insurance and what you are expected to evidence. It is therefore very important that you check this contract and discuss these requirements with your broker. As a care provider, there may well be certain insurances that your local authority requires you to have in order to meet their provision of care contracts. At inception or renewal of your insurance, your broker will ask you about these requirements and should be able to work with you on meeting them, including speaking directly to your local authority on your behalf if required.
Towergate also point out the importance of having regular insurance reviews.
One element of cover you should consider is business interruption, which gives financial support should your business face an issue that means it can’t carry out its usual activities. Your broker should be asking you about your annual turnover in order to work out your interruption exposure. This is often the main element of a care business that is most likely to change from year-to-year as contracts and service-users change. It is therefore very important that you review this with your broker on a regular basis, and certainly upon each renewal of your policy, to ensure you have the correct level of cover. While it may incur an additional premium, it reduces the risk of finding yourself under-insured should you be faced with an interruption to your business.
Having regular reviews of your policies also means you can have open and honest conversations with your broker about the things you are insuring, that you may actually be able to self-manage (for example, if excess amounts outweigh replacement costs) and those areas that you may not have cover for as part of your standard business insurance that could be business critical, such as motor or cyber insurance. It is important you understand exactly what you are and are not covered for, so challenge your broker to spend time explaining this to you if you are unsure.
What else can you do to ensure you have the levels of cover you need?
Your broker should always recommend that you review your buildings and contents valuations to ensure you have the correct cover in place regularly, at least every three years. Checking the rebuild cost of your property can make sure that you are not undervaluing, or overvaluing your premises, so your cover levels are more accurate. In addition, doing the same with contents will give you the peace of mind that if you were to suffer a total loss, you have been paying for the cover you actually need.
Budget challenges in the care sector
As a care provider, it’s nothing new that budgets are being ever-challenged and often providers are looking at ways to reduce their financial outgoings. While there may well be an opportunity for you to reduce the amount, you are spending on insurance, Towergate recommend that you always do this with the support of a broker who has specialist knowledge of the care sector, to ensure doing so doesn’t leave you exposed.