Breaking down a Combined policy...

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!