How to save over £1300.00 on your B&B insurance!
When your B&B insurance comes up for renewal I suspect like me you usually bite the bullet and pay up wondering why the premium always appears much higher than the official inflation figure?
This year I decided to become a little more proactive (and professional) and try understand why this business necessity, which no right minded business owner can afford to do without, rises in price disproportionally every year.
As a direct result of this research I achieved:
- A reduction in my premium
- An increase in my cover
- The respect of my insurance broker.
Can you do the same?
I spoke initially to a Chartered Surveyor, my current insurance broker, a solicitor and a business advice agency to examine every aspect of business insurance to ensure I had the knowledge to make an informed decision.
My first action on completing my research was to pay for a property valuation because my enquiries revealed that I had actually no idea how much I needed to insure my property for. A point worth making here about a business premises valuation is that you are not insuring the net value of the property i.e. what you might be able to sell it for, rather what it would cost to rebuild.
There is a difference and the industry norm for that difference is plus 22-25%. So the reinstatement value of your premises (what it should be insured for) needs to be 22-25% higher than the market value (what you might sell it for) to allow for such items as:
- Site clearance
- Planning Permissions
- Building Regulation Compliance
- Architects Fees
- Quantity Surveyors
- Any many other smaller items
So having decided what I needed to insure the buildings for I examined all the other insurable risks and put a monetary figure on them. I then prepared a chart with the different aspects of the insurance I needed clearly listed and the amount of the insurance required on that part of the policy. It looked a little like this:
I then faxed, emailed and posted up the information on my website and invited brokers and direct insurers to view the information, come back to me with any questions and then supply a quotation based on my figures.
When I received all my quotations I asked all the organisations who had quoted if that was their best price and all but one said it was. The one who didn't asked me some more questions about my claims history, where my property insurance figure came from, and why I had asked questions about employees liability insurance in particular about husbands and wives working in partnership.
I answered all the questions and the broker agreed to make contact again with the underwriters and ask them to re-examines their price. The result? A reduction in last year's charge, higher value cover on the premises, the deletion of some of the packages in the policy that were inappropriate to us and a new rapport with my broker who I think was impressed that I had not taken the easy option (again) this year.
The finished chart of quotations is shown below, the savings I quoted of £1300.00 are the difference between the most expensive, who I initially though might come up trumps, and the broker, who went the extra mile, I chose.
Finally business insurance is important. With a little research it is easy, not to become and expert which is impossible in a short period of time, but to acquire an understanding of the issues from both sides of the fence and to come out with a policy and a premium which if fair to both sides.