Is your business fully covered?

Operators must guard against the unexpected, say commercial insurance firms

Largs seafront
Extreme weather has battered Scotland in the last couple of years, making commercial business insurance more important than ever before.

IN the last couple of years, pubs across the country have suffered at the hands of freak weather incidents – namely, flooding. And while events like this can be devastating in their own right – causing temporary closure – operating without comprehensive insurance can add insult to injury and result in a business failing to reopen, warned insurance firms.

Companies told SLTN that a robust policy is a must-have for all operators, especially as the festive season draws near.

Anthony Glancey of Evalee Insurance Brokers said: “It’s really important that policyholders ensure that they are adequately covered over the Christmas and new year period.

“Some insurers give an automatic increase in stock cover over the festive period, but it is vital to check this.

It’s really important that policyholders are adequately covered when it comes to insurance.

“Also, make sure cash cover is sufficient as there will be an increase in takings over the festive period.”

Bob Hannah of Business Insurance Bureau agreed, warning that operators who fail to take out adequate cover for their business “risk loss of revenue and business failure”, which “could result in licensees losing their business completely”.

He added that publicans who operate without commercial insurance could run into legal trouble too.

“A licensee [who wasn’t properly insured] would run a large risk of being held personally responsible for any damages resulting in bodily injury or material damages, which could be held against his/her personal assets,” he said.

“Legal implications could quickly arise also, which in some cases could result in custodial sentences and/or heavy fines, as well as exclusion from the ability now and in the future to operate as a licensee.”

Therefore, operators need to be able to identify a robust commercial insurance policy, reckons Hannah.

“To determine a good policy, you would first need to understand the risks to the business,” he said.

“Every risk is different, regardless of trade; a robust policy for a licensee would cover potential issues like security guards, dancefloors, an ATM machine on site, or child’s soft play area – these and many more may not be covered in some insurance policies.”

Checking that the insurer is A-rated and not based overseas are also important considerations, according to Glancey of Evalee Insurance Brokers, who said: “Clients would be amazed to find their insurers are based in Gibraltar or Liechtenstein.

“A robust policy should always have liability insurance, with a reasonable excess. It should also cover things like loss of licence and, most importantly, business interruption.”

Glancey added that business interruption is especially pertinent as “it provides cover for the ultimate loss of business after an insured event – for example, a fire”.


Top tips

Do not buy an insurance policy based on price – only purchase an insurance policy that is comprehensive to the needs of the business.

Speak to an independent insurance broker with experience in your industry. They are best to advise on the necessary coverage which would be appropriate.

Read and ensure you understand the agreed coverage in place with your broker for your business; this is essential as it will clearly define the protections in place and what your expectations of the insurance policy are.

– Business Insurance Bureau.