Make sure you have the right level and type of insurance cover for your company needs. Danielle Hodgins, team manager, commercial schemes, RKH insurance Services, tells you how.
Despite the positive reports coming out of the print industry trade shows in the first half of 2012, the UK economy shows no sign of moving decisively out of the recession. When one eye is firmly on the bottom line and the other on ways of staying ahead of competitors it can be easy to dismiss insurance as an unavoidable outgoing on the profit and loss account. However, in this unstable economic climate, this security could be what your desperately business needs.
Insurance is all about getting the best value – taking into account service and coverage as well as price. Each industry and each business has its own individual risk profile, so below are ten things that printing businesses should think about when they buy insurance.
Know the law
It may sound obvious, but all businesses have to meet the minimum statutory requirements for insurance. If you have any employees you are obliged to buy Employers’ Liability insurance, covering your business against its legal liabilities to its employees for accidents or illnesses that occur in the course of their employment with your business. It is also a legal requirement to hold a minimum level of Third Party Motor insurance for all company vehicles.
Value your assets correctly
Being under-insured may result in a reduced claims payment from insurers. Most businesses do not deliberately under-insure their property and as a rule of thumb businesses should make certain that buildings are insured for their full rebuilding cost (not market value), including professional fees and the cost of site clearance. If you have not reviewed these figures for over five years it is worth contacting a local surveyor for a valuation. Most good policies will allow you to insure your contents on either a reinstatement basis (replacement as new) or indemnity basis (like for like) or even a combination of both. It is important that realistic values are provided when insuring on an indemnity basis – the deal you waited many months for before deciding to purchase that second hand piece of machinery may no longer be available at the time an incident occurs so you should allow an adequate sum insured to replace all such items.
Ask about umbrella limits for contents and stock
The fast-moving, deadline-driven nature of the print sector means that you may not be able to accurately predict what stock you’ll have on site. This means that the value of a printing business’ contents and stock can fluctuate in a short space of time. It is your responsibility to keep your broker informed of these changes, as it may otherwise invalidate your coverage. However, to cut down on the phone calls and the admin, you may be able to establish an umbrella limit, which means that as long as the total value doesn’t exceed that figure then you don’t need to keep making calls to your insurer.
Specify your supplier
An ‘unspecified suppliers’ extension may cover your business in the event of a key supplier being unable to supply you with materials due to loss or damage at their premises. Cover under this extension is often limited, so if you are heavily reliant on one supplier it is usually recommended you specify the supplier, as this may provide wider coverage. The insurer will be able to look at your supplier’s business in greater detail to assess the risk of something happening to them. This option may lead to you paying a slightly higher premium, but it may also offer considerably more coverage.
Remember the stock that’s not at your premises
Do you outsource? Whilst in the majority of instances off-site stock - say that at a finishing house - would be protected by that finisher’s own insurance, there is always a risk they could be underinsured or, worse still, not insured at all. In such circumstances you could be left to foot the bill to replace your stock if it was damaged or destroyed whilst at their premises. The first action you should take is to check the insurance cover in place at the finisher to ensure it would cover your stock. As a back-up, you should ask whether your policy includes ‘temporary removal’ which provides a limited amount of cover for such a situation.
Don’t pay for cover you don’t need
You don’t need to be told that repairing print machinery can be very expensive, but it is still worth thinking carefully about exactly what you want coverage for. Our experience shows that many print businesses perceive breakdowns costing less than £5,000 as part of the usual costs of running their business - it is the breakdowns that cost more than this that can cause the serious cashflow problems. If you hold that view, you might find that it is more cost effective to secure a policy that just insures you for the costs over £5,000. This will relieve you of paying the substantial costs of insuring more routine incidents.
And remember to insure your computers...
The print industry’s ever increasing reliance on technology means you should ensure your policy adequately covers any computer equipment. Cover for computer equipment is limited under the contents section of some policies. You should look for policies that include additional cover for damage not insured with your contents, in addition to reinstatement of data and increase in cost of working. When buying this cover it is also important to ensure items such as Rips are covered as many policies will exclude them.
Covering your employees
After insuring your printers and other equipment, you need to make sure you still have people able to work them! There are some insurances you can take out that are specific to risks faced by employees in the print industry, such as personal accident cover for injuries sustained during the inching and crawling cleaning process.
Depending on the nature of your business, you might want to look further to address the implications of what would happen if you lost a key member of staff. An ‘essential employees’ extension on your policy may protect you against loss of gross profit arising from accidental death or permanent total disablement of one of your key members of staff. Cover will usually only be provided for a three month period, giving you time to find and recruit a suitable replacement.
Good risk management practices reduces premium
One of the best ways to get a good deal on your insurance is to demonstrate that your business is aware of its potential risks and has taken steps to protect against incidents occurring. For example, to prevent or limit the risk from fire have you considered installing an inert gas fire extinguisher for key items of equipment or for larger printing firms the installation of a sprinkler system? Could improvements be made to the physical security of the property to prevent access in the first place? If you are looking for ways to save money it is advisable to talk to your broker who will be able to advise you where potential investment in risk management may reduce your insurance premiums.
Judge your insurance on value not price
It is good practice to go out to tender every three to five years but remember you should be judging your insurance on more than just price. You should look at the quality of advice you get from your broker as well as the coverage and the scope of the protection.