When calculating sums insured for commercial combined, what do I need to include?

It’s really important that your sums insured reflect the total value at risk – this means the cost of replacing everything at today’s prices on your buildings and contents, including machinery and stock if all were totally lost or destroyed.

 

If I have a burst pipe – what is covered?

For an escape of water claim, it is the cost of repairing the damage caused by the water that is insured. It does not include payment to the plumbers for the repair. Insurers will however need to see the plumber’s invoice or report to establish that the insured peril has occurred.

 

If my roof needs to be repaired is this covered by my insurance?

For buildings insurance it’s really important to remember that your policy will respond to an insured event that happened at a particular date and time. It is not a maintenance contract for wear and tear and gradual deterioration from rainwater or defective guttering etc.

 

What do I include in my calculations for Business Interruption Insurance?

Business Interruption protects a company’s net profits, over a pre-defined time (the indemnity period) following a loss, such as fire, flood, explosion etc. The cover is designed to return the business to the same trading position that it was in prior to this event.

The indemnity period is very important because it relates to how long the insurance will make up a short fall in profits and therefore needs serious consideration. A minimum of 24 months is usually recommended to provide enough time to re-establish your enterprise.

Think about how long it would take your business to recover, including re-building restrictions that you might face, finding and training new staff, servicing existing clients, the lead time for specialist equipment, new stock, business promotion, advertising etc.

Once you’ve decided on the correct indemnity period, consider gross revenue/profit projections over this time, including changes in price of any raw materials you may use.

Then moving costs, including the set-up of temporary premises, and potential staff compensation. And also how quickly you could do this.

Know the terms of your lease, you may still have to pay your rent even if the building is inaccessible or badly damaged and if so, these costs need to be included.

There may be saved expenses, such as building service and maintenance charges and perhaps reduced staff numbers until you get back to normal. Put this all together and this is what your premium costs will be based upon. Your Flint account handler will be able to discuss common pitfalls for these calculations to help you get it right.

 

Does Bankruptcy or County Court Judgements against me prevent me from getting insurance cover?

No! We work with many different insurers and can find the right cover, at market rates. However, the most important thing is that you must tell us about your circumstances. Insurers take a very dim view of non-disclosure and will inevitably throw out your claim for this type of dishonesty.

 

What insurance do I need for sub-contactors?

Labour only sub-contactors are supervised by you, use your materials/tools and in some instances may even wear your company livery. These workers should be treated as employees, and are legally required to be insured under your Employers’ Liability cover.

Bona-fide sub-contactors tend to work without supervision, are paid for a specific job, use their own materials and would be liable to correct any work that was deemed unsatisfactory in their own time. You do not need to provide Employers’ Liability for these workers, but you must check that they have appropriate Public Liability cover, as well as their own Employers’ Liability cover if they employ staff.

We have seen instances where some employers get sub-contactors to buy their own liability insurance and then invoice them for the costs and treat them as bona-fide sub-contactors, however, if they are using your tools/materials and wearing your logo – they are usually deemed as working for you.

 

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