We see a diverse range of companies both in terms of size
and type of business undertaken and sometimes there can be an element of fear
when it comes to their insurance and actually understanding what exactly they
are covered for and how their premium is calculated.
With this in mind, we thought we’d try to put together a
basic guide to explain the ins and outs of a standard Commercial Combined
policy. We’ve tried to keep it simple and not dazzle you with jargon, but if
you’ve got any general queries, please feel free to run them by us!
The “Combined” policy has been in existence for a while now,
before that the different sections of a policy used to be placed with different
insurers, however as premiums have become more competitive and suppliers more
plentiful, it soon became apparent that it would be easier all round if the
various sections were combined under a single policy. Hence, Commercial
Combined.
Material Damage &
Theft
These are the section(s) under which your tangible assets
are covered. You determine the limits by providing us with a new
replacement value of your Plant, Machinery, Computers, Contents, Electronic
Office Equipment etc.
Most policies will work on a “new for old” basis unless you
have agreed otherwise with your insurer.
Stock would also be covered under this section but usually
on an indemnity (like for like) basis with the cost price being used to
calculate the premium.
Specified All Risks
Under this section we place your portable assets that are
based at your business premises, but also taken away from site, such as
laptops, phones, equipment etc.
You can specify the geographical location of these: UK / EU / Rest
of the World
We would also specify any individual items if they were
particularly valuable and portable, for example
“Canon Digital SLR
Camera - £1,000 (EU)”
Business Interruption
(BI)
Arguably one of the most important sections of a Combined
policy. This section covers your loss of Gross Profit (sometimes Revenue or
Increased Costs of Working) following an incident that is covered under the
Material Damage section.
The interruption to your business has to be as a direct
consequence of a material loss.
BI cover has been the difference between some businesses
recovering or going under after a large claim.
There is much more depth, breadth and scope to this cover
(too much to go into here), but talk to us and we can ensure that this section
is tailored to suit your specific needs.
Goods in Transit
If you are moving goods around in say, a van and that van
happens to have an accident and in so doing you lose the goods that were in
said van, you can insure against this event! Theft from the vehicle would also
be covered (subject to certain terms and conditions).
We just need to know the maximum amount of goods in your
vehicle at any one time.
Money
This section covers physical cash held on site during
working hours or in the safe overnight or in transit to the bank and more.
Employers Liability
(EL)
If you are a Limited company then by law you must have EL cover
in place (there are a couple of exemptions, which can be found on page 3 of
this document:
http://www.hse.gov.uk/pubns/hse40.pdf
The government insists on a minimum of £5m, but insurers
give you £10m as standard.
The premium is calculated based on either the number of
employees or your estimated wageroll (broken down between Clerical, Manual,
Labour Only Sub Contractors and Work Away etc.).
The cover is in place to protect your Employees should they
suffer an injury and/or financial loss as a result of the Employers negligence.
Public Liability (PL)
This protects your company in the event that you damage
someone else’s property or cause a third party (ie. not an employee) bodily
injury.
The most common limits of cover are £1m, £2m or £5m –
sometimes this limit can be governed by where you are working. ie. If you are a
tradesmen carrying out general maintenance on a hotel, that hotel may insist on
you having a £5m limit in line with their own.
Public Liability is the absolute bare minimum cover that
anyone in business should carry!
Commercial Legal
Expenses
Historically sold as an add-on, but now more and more
insurers are including the cover as standard. Amongst other things, this
section provides you with cover to recoup the costs of any tax investigations.
Arguably one of the most useful facets of the cover is the
Employment Disputes cover. This means that should you have to let an employee
go in slightly contentious circumstances ie. you suspect they have their hand
in the till, you can call the legal helpline number and the “Legal Eagles” will
advise you on how to deal with the employee in question and as long as you
follow their advice with regards to correspondence etc. should the claim reach
tribunal stage, the insurer will cover your costs and expenses (up to a certain
limit, which is usually £50k or £100k per claim)! As a sidebar and blatant plug
for our own in-house product, if you wanted to purchase Legal Expenses cover
separately, our premiums start from just £29.68
incl. Insurance Premium Tax.
Insurance Premium Tax
Payable on 99.99% of policies (some Marine Cargo policies
are exempt) and currently charged at 6%. This goes straight into the
pocket of Mr Osborne and Co, but if we had our way we’d refund it back to you
lovely people!
So, there you go a very brief whistle-stop tour of a
Commercial Combined policy. If you would like to discuss this or any other
insurance-related matter further, please do not hesitate to contact us!
