Don’t take any risks with your livelihood

A robust policy is imperative, say commercial insurance firms

OPERATORS across the country put their blood, sweat and tears into their businesses, so it’s absolutely vital that any premises is fully insured and protected against the unexpected.

• Trading without insurance leaves operators vulnerable to the unexpected, firms say.

That was the message from insurance firms, who stressed the importance of a robust insurance policy for any on-trade business.

“Your business is your livelihood; it pays your bills, puts food on the table and supports your family,” said Andy Armstrong, underwriting manager at commercial insurance firm Morgan Richardson.

“For these reasons you need to ensure that you have suitable insurance cover in place should the worst happen.”
He explained that, with adequate cover in place, operators have “the peace of mind to concentrate on making your business a success rather than worrying about the ‘what ifs’ of an off the shelf, run of the mill insurance policy”.
Sharing this view, Lee Tetley of insurance broker and risk management firm, Marsh, said a robust insurance policy is “a crucial requirement”.

So what are the key factors a policy should cover?
Armstrong of Morgan Richardson said the first insurance consideration for operators in the licensed trade is contents – make sure the likes of stock, fixtures and fittings are insured for the “full replacement value to protect against a catastrophe, such as a storm, flood or fire”.

Insurance gives you peace of mind to concentrate on making your business a success.

“Hand-in-hand with that goes your business interruption cover that will pay for your outgoings should a catastrophe occur and you are unable to trade for a period of time,” said Armstrong.

Echoing this advice, Tetley of Marsh urged operators to remember that insurance is “designed to put the policyholder back in the same financial position as they were before the loss”.

“Not only does a good insurance policy cover the cost of replacing or repairing any damage, there will be a business interruption section which will provide cover for loss of profit or revenue whilst your business returns to its normal level of trading,” he said.

“It is worth noting that some events, such as fire or flood, may take months to fully recover from; the importance of this section of cover should not be understated.”

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Ensure you’re insured

When it comes to basic insurance policies, there are a number of factors to watch out for, according to Lee Tetley of Marsh Insurance.

• High excesses: you will have to pay out a higher portion of each and every claim.

• Onerous conditions: the ‘small print’. A good broker should bring any significant or unusual conditions of cover to your attention.

• Failing to ask enough questions about the business: if the broker or insurer doesn’t go into detail about various areas of your business activities or cover requirements, how can they be sure that they are meeting your cover requirements?


It’s in these instances that the risk of operating without insurance are highest, according to Tetley, who warned that it not only opens up the possibility of costly repairs, it can threaten the entire business.
“All the hard work and time spent in building and growing a business can be undone by a variety of events such as fire, water leaks or floods,” he said.

“Even smaller events such as minor thefts can cause financial loss for the business.”
In the worst scenarios, particularly for smaller or newer businesses, Tetley said it could lead to “difficult decisions in whether to continue [trading]”.

As well as protecting against unexpected costs, Tetley added that the business owner “may well have a legal obligation to insure if it has employees”.

All the hard work building a business can be devastated by a variety of events.

This was underlined by Armstrong of Morgan Richardson, who stated that the need for adequate employers and public liability cover is “most important in this day and age”.
But when it comes to taking out insurance, not all policies are born equal.

Armstrong warned against more basic policies, saying they “would normally not include full theft cover but would restrict it purely to ‘signs of violent or forcible, entry or exit from the premises’”.
“This would mean that there is no cover should a theft occur during opening hours, which happens more than you’d think,” he said.

“It would also be unlikely to cover accidental damage, which could be costly should you drop a till, for example, while cleaning.
“There would also be a shortage of any legal defence costs.”

Therefore, Armstrong reckons it’s important that operators discuss their specific needs with their insurance provider.

“Our top tip is to speak to your insurance provider about what you want or need from your policy and don’t make do with a stripped down basic policy which will not meet your expectations of service or cover, should you find yourself in a position where you need support,” he said.