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SPN DEC 2010 Pool&SpaIndustry
www.swimmingpoolnews.co.uk
Keith Bull from specialist brokers Nsure Limited looks at the dangers involved in reducing the cover on your business during any recession
last thing you need is an unexpected and uninsured burden on your cashflow. Many businesses take the decision not to insure certain risks on the basis they are considered too remote in relation to the premium, or if they did happen, it would not be too onerous and the cost could be absorbed. Others opt for limited self insurance by taking higher excesses or only buying a limited amount of cover. That’s fine when times are good and there is spare cash to deal with the unexpected, but when times are hard a one off event or series of smaller uninsured incidents can send a business over the edge.
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There is a tendency to cut out what are considered to be ‘luxury items’ such as Business Interruption, Contract Works, Group Personal Accident and Professional Indemnity when these covers are in fact a vital part of a businesses protection and the decision is not always made with a full understanding of the cover provided or the risk involved. This is particularly so with Business Interruption, where statistics show that few companies survive a serious claim at their premises without adequate cover.
There is also an inclination to cut sums insured on property or liability indemnity limits to unrealistic levels, leaving a company under insured when a claim does occur. Property claim payments are then reduced by insurers applying the average condition and liability claims can simply exceed the cover purchased. It is essential to ensure that your business is fully protected and you may in fact need to consider additional insurance during times of recession. Legal disputes can be more likely in hard times and various covers are available to protect against costs incurred involving employees, suppliers or customers.
hen times are tough businesses look to cut costs and insurance can be high on the agenda. However, when money is tight the
Professional Indemnity cover is not just for companies with a specialist design department, any business providing design or advice as part of their service to customers is at risk if something goes wrong or when it is alleged something has gone wrong.
Bear in mind that you are more likely to be a victim of crime during a recession. Figures from the British Crime Survey show that during the last recession there was a spike in domestic burglaries reported in England and Wales between May 1990 and March 1992.
It is unfortunate that the economic downturn has coincided with insurers wanting to increase their premiums. They have suffered a significant downturn in investment income and many have started to try and increase rates, which in turn will inevitably mean some businesses look to cut their cover.
Some companies will also be attracted by cheap offers on the internet, but be warned. Buying insurance over the internet is a ‘non advised’ sale where you are given details of the insurance contract and it is up to you to decide if it is suitable for your circumstances. Few offer the opportunity to discuss the cover or information you have provided and if you get it wrong you may well not be covered if a claim occurs. The information provided by internet insurers at the time of the sale will be a summary of cover that is supposed to include all significant exclusions (they don’t) and most very cleverly get round this by forcing you to tick the box that you have read and accepted their terms and conditions before they quote a price. This frequently includes the full policy wording and by ticking the box, you have just confirmed that you have read it and understood the contents! They know very few read it, but there is very little comeback once you have ticked the box. At Nsure we offer a free Insurance Health Check where the risks faced by your business are
identified and checked against your current insurance protection. We often see examples of inadequate cover with some companies undertaking work that falls outside the scope of their policy business description or is specifically excluded. Examples include the use of heat equipment or exceeding depth limits. Understanding both your business and industry are key when it comes to arranging insurance protection that suits the needs of your business and Nsure have over 15 years experience of dealing with clients in the wet leisure sector. During that time we have developed Poolsure, a bespoke insurance scheme with numerous additional covers designed to protect against the risks faced by the wet leisure industry. It is also competitively priced with rates on the scheme not increasing over the last few years and no increases are planned for 2011. Nsure have also negotiated discounted rates for members of SPATA or BISHTA.
It is understandable that all businesses will be reviewing their costs and ensuring they are obtaining value for money, but if you are inclined to cut insurance cover, at least consider the risks carefully so that you make the decision fully aware of the potential implications. If not, it could prove to be a false economy.
For more information or to arrange an Insurance Health Check please contact Keith Bull at Nsure using the details below. spn
i FOR FURTHER INFORMATION
F NSURE ( 01903 520200 :
keith.bull@nsure.co.uk
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