For any business, controlling operating costs is essential for maintaining healthy profit margins. But insurance premiums are just one of many costs to consider, so are you using your money wisely to cover the biggest risks to your company? Or are you simply maintaining the same coverage year after year hoping the price may come down eventually?
A good insurance broker will evaluate your coverage against what you need. You may be worried that taking out more policies, increasing limits, or upping the amount insured could cost you more if you haven’t reviewed your insurance in a while. But there are ways to re-engineer your spending to make it work harder for you.
Consider a business that produces electrical equipment components. Their materials don’t tempt thieves, and the fire risk is minimal. They aren’t based in a location susceptible to flooding, and the company has only ever filed a few claims for accidentally damaged office supplies.
Their property and business interruption insurance premium is £50,000, with a £500 excess. They’ve read that one of the main risks facing SME businesses now is cybercrime, and they’re aware they should have a cyber insurance policy. However, they’re on a limited budget and unable to afford the additional £3,500 for the policy they’ve been quoted.
After reviewing their current property and business interruption policy, their new broker suggests that since they rarely file claims, they raise their policy excess, also known as a deductible. After speaking with the insurance provider, they learned that if the business increases the policy excess to £10,000, the insurer will provide a 7.5 per cent premium decrease (£3,750).
The customer agrees this makes sense. Based on past experiences, it’s unlikely that they’ll incur significant losses on their property policy. The saved money can now be used to purchase cyber insurance, which is considerably more pertinent to their business’s most pressing risks.
This is just one example of how a skilled broker can assist you in analysing your risks in a new way, offering tailored coverage to suit your business requirements.
Author: Alison Waters, Commercial Placement Manager at Howden
This article comes courtesy of Howden – an expert insurance group that does insurance differently – offering flexible, high-quality cover, and reassuringly straightforward service, while using insurance as a tool to increase resilience. United by a no-limits mindset, Howden is a powerful and passionate team, rising to any challenge to do right by your business.
