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BUSINESS BANKING & FINANCE


Business insurance


– is online or old school the way to go?


Peter Blanc (pictured), Group Chief Executive Officer at Aston Lark


In many parts of business life there are online ways to solve challenges. Online banking? Tick. Online accounting? Tick. Digital VAT returns? Tick. Online insurance for your business? Not a great idea just yet. Every business needs insurance.


It’s a legal requirement to have Employers Liability Insurance and extremely sensible to have Public Liability Insurance and Business Interruption Insurance, as well as a whole host of other covers including Directors and Officers Liability, Cyber Insurance, Contents, Stock, Motor, Personal Accident – the list goes on. So, given that you can buy


nearly everything else for your business online, why not your insurances? In a nutshell, the risks of doing so can be huge. Car Insurance (and to a lesser


degree Household Insurance) is bought successfully online by millions of customers each year. This works because the products are well understood by the consumer - nearly everyone that drives a car can describe what Comprehensive Motor Insurance does, what an Excess is and what No Claims Bonus means. Just because you own a business


however doesn’t mean that you know what Products Liability is, or what limit of indemnity is sensible for Public Liability, or what indemnity period means... or a hundred other questions in jargon. Insurance is a strange


combination of products that have been created over hundreds of years in response to problems and risks facing businesses and society. Many of the complexities of insurance exist because the policies are covering legal liabilities – and these are based on English Law,


which of course is hugely complex. Every business’ needs are


different. Whether you are a wholesaler, retailer, manufacturer, distributor, contractor, adviser, consultant, a butcher, baker or candlestick maker, the insurances that you need to consider will be many and varied. Several insurers have tried to


create online solutions but in my view it’s extremely dangerous for any business owner to rely on these. They ask questions that you simply won’t know how to answer. For example, one website asks simply: “What Limit of Indemnity do you require for your Public Liability insurance?” and the options given are £1m, £2m or £5m. Many people would think that £1m sounds like quite a lot of cover and should be fine – but in fact, it is nowhere near enough. If you or anyone working for you manage to injure/harm someone through your actions then the amount that you could be liable to pay will depend entirely on how severely injured the person is, whether they will need long term care, whether they were a breadwinner for a household etc. Courts are regularly making


awards of damages in excess of £10m for severe injuries and amounts over £1m are very commonplace indeed. If you have no experience of such matters then answering such a question appropriately will be impossible. Do you need Directors and


Officers Liability? Environmental Liability? Contractors All Risks? Professional Indemnity? Cyber Insurance? I could go on. So what’s the answer?


Fortunately there is a quick, simple and easy solution and that is to find an insurance broker and ask for advice. Most brokers don’t


‘Several insurers have tried to create online solutions but in my view it’s extremely dangerous for any business owner to rely on these’


business network November 2019 63


charge for initial advice and a good broker can very quickly and easily tailor a package that exactly matches the needs of your business. Brokers have access to the whole range of insurance companies and Lloyd’s syndicates, and most brokers have an online quotation engine to speed up the process. Crucially though, you will


receive advice – simple, impartial, expert advice on what covers you need to buy to protect your business.


It can be really tempting to “do it


yourself” but in this particular area of business the “old school” approach is safer, quicker and, in the long run, can be much cheaper. We are actively working to find


ways of providing advice digitally and I have no doubt that in the future the insurance industry will successfully enable businesses to buy proper protection online, but for now the risks are, arguably, far too great. A good broker will cover your back and in business that’s a big help.


FEATURE


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