Until one Thursday afternoon the importance of Business Insurance had always passed me by.
By the end of the day I had found out that I was throwing away big bucks that I could ill afford to lose.
Are you doing the same?
Examining your Business Insurance may be worth Thousands
I had life insurance cover that was taken out several years before Thursday the 29th.
Most of the cover that I had was put in place through my IFA after my arguing to keep the cost down had been discussed into submission.
Then one Thursday I began to feel ill. Actually I had worked on for several days with chest pains that I believed were indigestion.
This was supported by the fact that antacid tablets appeared to ease the symptoms.
If you’ve ever had this I’ sure you’ll understand and I bet you can guess what comes next.
Yes Thursday November 29th was the day I had my heart attack.
I survived after having a stent placed in the left side of my heart and was back at work within two weeks.
You could say I got away lightly, not that it felt that way at the time.
My ignorance revealed
It was about four months after my return to work when the phone rang it was my IFA (Independent Financial Advisor).
He kicked off the conversation by asking how I was, which is probably what he says to everyone and I replied I’m fine.
That was force of habit although I did feel very well.
“OK” I added “apart from the heart attack” I just about managed to add.
He asked what had happened and so I explained. After listening for a minute or two he interrupted
” how come I didn’t see the claim”
“What Claim” I didn’t know what claim there could have been.
” Well for a start you have critical illness cover,and then there could be loss of earnings”
I went quiet.
“The claim for critical illness that you took out with your life insurance”
Well bugger me.
It had never even dawned on me for one minute that I could claim.
It turned out that I could and that one phone call prevented me from losing £ 32,000 which I received in due course.
Examining Your Business Insurance
This incident opened my eyes to the value of Insurance in general, so I decided to examine my personal and business insurance.
I had accepted the Insurance offered by my bank when I started up and was afraid to upset them by changing.
This is a big mistake.
Use the four Tips to re-examine your situation and get the right cover for the best price.
Insurance Tip 1
Make sure that you have a summary sheet for every policy that you have and review them when any unfortunate incident occurs.
If you rely on reading the policies regularly you just won’t do it.
They are so long and difficult to understand that short summary notes are invaluable. It may be that your Insurance agent, IFA or the insurance company will provide this for you.
If you go to a good specialist Business Insurance comparison site, I used Quotezone, you will not only get good prices but all the information on your cover.
If all else fails prepare a summary yourself, it’s time well spent.
In the light of my ignorance on this occasion I ask myself am I the right guy to be telling anyone about Small Business Insurance?
Well, I’m no expert and that’s for sure but I learnt a lot, the hard way.
Perhaps you can learn form my mistakes and save yourself the “agro” of getting it wrong.
Insurance Tip 2 Renegotiate your policies regularly
I don’t know about you but when I started my business, now some 18 years ago, I took out the business cover offered by my bank.
Well quite honestly I was too frightened not to. I had managed to get a loan from them for my equipment and also an overdraft facility and I didn’t want to upset the apple-cart by refusing their insurance.
It was several years later that I was sat watching the money man on tv and listening to him say over and over again that we should visit a comparison web site such as Go Compare or Compare the Market ( .com) or visit a specialist comparison site such QuoteZone.
I can’t remember how often I’d heard this but for once it sank in and I did it.
I was bombarded with a shed load of questions that I couldn’t answer.
From the value of everything in the business to the type of locks and security I had.
That started an alarm bell ringing. Since I had taken out my current policy I had moved premises twice and no one had ever asked about the security. may be I wasn’t even covered despite all the premiums I was paying.
So if you do nothing else important today find out what your current premiums and exactly what is covered and for how much then get some comparison quotes.
It’s quite possible that you could be paying far more than you need to or even that you are not protected.
On that subject:
Insurance Tip 3 – Check the policy before you claim
This is yet another Tip that I learned the hard way.
In April of 2009 I had a window at the back of the premises broken, kids wouldn’t you know.
I called a local glazier and got it fixed. The bill was £ 75 and it was done in one day after my phone call.
Six months later the same happened again. A different window but identical in every other way.
This time I was awake, or so I thought, and I decided to claim it on my insurance.
It took three days fro a man to come out and look at it, the a further week for someone to turn up with the glass.
I phoned the insurance part way through this waiting time and asked if I could get my local guy to do it and claim the cost.
No, was the answer it had to be the approved glass company.
I went along with it and had forgotten about it until, one day a bill arrived.
It was fro £270.00 !
I phoned up to find out why. Part of it was for the waiver of £ 65.00 on glass damage and the rest was because I was responsible for paying the VAT content.
I know , your probably thinking it wasn’t a lot and I agree.
But it could have been a lot more if the item was expensive and the VAT an appreciable amount it could have been a problem. This is especially true if you are one off the many businesses who pay VAT as fixed percentage of turnover rather than claiming VAT back on all purchases.
So please beware. Had I known this would happen I would have simply got my local guy to do the job.
It would have been cheaper and quicker.
Insurance Tip 4
My business uses a lot of computer equipment and so I insured myself for the value of the gear plus a percent for what I thought I would buy during the year.
Most accountants depreciate computer equipment very quickly. So you could find it worth nothing after two years.
If you over insure and then claim you can be penalised and not get the amount that you expected.
You may take the opposite route and insure your equipment for less than it’s worth assuming that not all of it will ever be claimed for. This is possibly true especially if it is located in more than one building. again there’s a big BUT!
If you insurers find that you are under insured the payment you get will be reduced by the percentage that you were in error.
This happens even if say £ 2,000 worth of kit was lost and your overall insurance at £50,000 was 20% under insured you would only get 80% of your £2,000 i.e. £1,600. It seems unkind when you have far more overall cover but that’s the way it goes..
So whatever you do, have an audit and get the most accurate, up to date, figure that you can and adjust it every year.
This way you can avoid unnecessarily large premiums or claims that fall short of the amount you’ll need for the replacement of kit.
Follow the four tips and avoid these problems.
Whate3ver you do make sure that you check your current insurance levels and get quotes from a small business comparison site.