So you have business insurance. But is your policy fit for purpose now you’ve diversified? Scott Williams of First Insurance Solutions highlights considerations that might have escaped your notice.
1. It’s the law
If your employee is injured at work, or becomes ill as a result of the work they do for you, insurance covers the cost of compensation and legal fees. By law, your insurance must provide cover of at least £5m for any one claim, but most policies offer at least £10m so it’s worth checking.
Your policy should cover all employees, including seasonal staff as well as temporary staff, students or others on work placements. If your organisation involves volunteers or you should tell your insurer.
The Health and Safety Executive is responsible for enforcing the law on Employers’ Liability Insurance. You can be fined up to £2,500 for each day that you do not have appropriate insurance.
There are very few exceptions to the rules, but there are two main ones. The first is for family businesses, i.e. if all of your employees are closely related to you (as husband, wife, civil partner, father, mother, grandfather, grandmother, stepfather, stepmother, son, daughter, grandson, granddaughter, stepson, stepdaughter, brother, sister, half-brother or half-sister). But, be aware that this exemption does not apply to family businesses that are incorporated as limited companies.
The other exemption is for companies employing only their owner where that employee also owns 50% or more of the issued share capital in the company. If you have no employees but multiple directors, you still will be required to hold Employers Liability.
2. In the event of…
Under the Property Damage section, the policy will cover you for specific risks or cause of loss such as a fire, windstorm, flood, or theft. These are known as perils. A named-peril policy covers the policyholder only for the risks named in the policy. In contrast, an ‘all-risk’ policy does just that - covers all causes of loss except those specifically excluded.
3. Make the sums add up
Ensure you have got an adequate plant/machinery sum insured. Many companies have just the depreciation value insured so check you also have cover to replace/re-instate and deliver, fit and calibrate etc.
4. Get your business interruption right
Most manufacturing businesses will insure on a gross profit basis. An accountant’s gross profit calculation will subtract any cost that varies in proportion to production - but for insurance purposes they must vary in direct proportion. This is a key distinction and the source of much underinsurance. One typical example of what should be included is wages, as a company will need to continue to pay staff following a loss.
5. Time to reschedule?
Ensure that you have got provision for all the types of printing and work you do. They all need to be disclosed to your insurer. The typical rule goes that if it’s not noted on the schedule then it’s not covered.
6. Going up in flames
It might be less of a concern to printing companies now than it was a few years ago, but most policies will still have a ‘flammable liquids’ condition, stating that no more than 50 litres should be stored on the premises. And there can often be further conditions about storage in metal cabinets, etc. so have a look to double check you are meeting your policy’s conditions.
7. Unattended processes
Unattended print production may becoming an attractive option for many reasons, but be warned that it is often unacceptable to insurers - largely due to the risk of fire. Your policy wording will almost certainly have an unattended machinery or processes condition so check for restrictive clauses.
8. Get professional indemnity
Have you got professional indemnity cover? With the best will in the world things can go wrong with any print job, and perhaps more so if you’re also handling the design/job creation.
9. Alarm bells sounding?
If you have an alarm on your premises is the right clause for your alarm applied to your insurance policy? Is it annually maintained by an accredited security company? Is it actually a digital communicator or redcare system? An alarm condition can invalidate your claim if it transpires that the alarm was not properly set or was not up to the insurer’s specification.
10. Standard class or a bit special?
Is your premises classed as a ‘standard construction’? And what does standard even mean? Well, traditionally this would mean brick with a slate or tile roof, but nowadays what this refers to is combustible material. If your building is constructed of wood or has composite panels used in its construction or any areas of flat roof it must be disclosed to your insurer and noted on your insurance policy. That said, not all composite panels are bad, and some are more fire resistant than traditional materials (wool rook for example).
11. Don’t sell yourself short
Insurers love good risk information and ultimately it can lead to some considerable discounts on your policy. If you have a written health and safety policy, are ISO9001 accredited, hold health and safety audits or conduct regular employee training, tell the insurer!
12. Make your broker work for you
A broker works for you, so make sure they are carrying out a market review each year and getting you the best deal. Rates change regularly so you could save money. But also, a review of current cover requirements is often when companies realise that there are gaps in their policy - or that they aren’t covered as well as they thought they were.
Sometimes getting alternative quotes from your broker can actually make it clear that you really are getting a great deal with your current company. You may have discounts, great coverage for a good price, and a company you trust and know. Sometimes it takes shopping around to give you the peace of mind that you really are in the right hands already!
13. Cheap won’t always make you cheerful
Don’t be tempted to get cheaper insurance by reducing the levels of cover. With cover like public liability it’s the most obvious way to get a lower price, but remember this may be a false economy and you need to be sure you are buying enough cover to meet possible claims.
Pay attention to the different levels of cover that each insurer provides and what conditions and exclusions they are putting on, and relate this back to the price.
Some policies may look like they will save you money, but they may require that the business makes some fundamental changes to the way it operates, such as when waste should be removed, what use of heating is required or where fork-lift trucks are charged.