AA Insurance has expanded its commercial insurance offering through an exclusive arrangement with Bollington, one of the UK’s leading independent business insurance brokers.

The deal means that the AA is launching new products to add to its commercial range, including insurance for recovery operators, the taxi trade, motor traders and repairers and self drive hire companies.

Andrew Strong, the AA’s chief executive, points out that these motor industry products align well with the AA’s motoring pedigree.

“The AA is a household name for roadside assistance as well as motor insurance, including van and commercial vehicle cover. Adding specific motor trade insurance is a natural extension to the range and, in addition, forms a perfect fit with the AA’s fleet business breakdown cover.”

As part of the deal, Bollington is offering AA fleet cover to its own commercial customers.

Paul Moors, chairman of the Bollington Group said: “We have worked extremely hard to win this imaginative and creative relationship with the AA. We have over 40 years’ experience in the commercial broking sector and I believe that this is one of the most significant new ventures in the commercial market.

“Our broking experience, coupled with the AA’s marketing ability, is a perfect arrangement. It offers huge potential including development of new services created through AA’s financial services such as business credit card or fuel cards.”

Strong said that in the past, the AA has concentrated on distribution of commercial insurance through customers who buy other insurance products and, while that has been growing steadily, it represents a small part of the total business market: “There’s a greater need today for advice and tailoring products to suit individual requirements.  Now we have that opportunity through our new relationship with Bollington – not just in the motor sector but amongst small businesses of every sort.”

Apart from the motor trade, the AA offers cover for pubs, restaurants, hotels and guest houses; small businesses such as traders, contractors, landlords, consultants and shop keepers; and van and small commercial vehicle fleet cover. Risks include buildings and contents, liability, employers’ and professional indemnity, tools and goods in transit.

Several banks have announced measures that will help SMEs affected by the recent riots in London, Manchester, the Midlands and elsewhere.

NatWest and RBS will offer customers a range of solutions:

Fast-track requests for temporary credit increases provide short term financing to cover cost of repairs and replacement stock while businesses wait for insurance claims to be paid offer repayment holidays on existing loans to give businesses the breathing space they need to get back on their feet refund or waive overdraft fees incurred as a result of the riots on a case by case base basis. Other banks have announced similar schemes.

Meanwhile, businesses who have suffered damage as a result of the riots need to claim on their insurance quickly or they risk not being able to recover their losses, warns City law firm Reynolds Porter Chamberlain LLP (RPC).

RPC explains that most insurers require claims for riot damage to be notified within a very short period – typically seven days – otherwise the claim may be rejected.

This is because the insurer can make a claim in the policy holder’s name against the police to recover their losses under the Riots (Damages) Act 1886 (RDA). However, to do so that claim must normally be lodged within 14 days of the damage occurring.

Businesses that have suffered riot damage that do not have property insurance can also make a claim to recover their losses directly from the police under the RDA.

Stuart White, partner at RPC, comments: “Riots have caused millions of pounds worth of damage over the last few days.  Businesses that have suffered riot damage should notify their insurer as soon as possible so as to avoid being left without insurance cover. Any delay is an unnecessary risk.”

“Some independent retail units have been completely destroyed by the rioters, making them dependent on recovering the value of the damage to start trading again.”

“The good news for some of the smaller retail units that have been damaged is that even if they do not have a property insurance policy they may be able to recover the value of any damage sustained because of the rioting directly from the police.”

“However the compensation under the RDA will not normally extend to the financial losses of the business while it is unable to trade.  Trading losses are likely to be recoverable only by businesses with business interruption insurance.”

Stuart White adds: “Given the scale of these riots and the current pressure on police budgeting there will doubtless be calls to reform a law that compels police forces to compensate businesses and individuals for riot damage.”

“We will see whether insurers who cover police forces for the cost of RDA claims respond to these riots by pushing up the cost of their insurance.”

 

Accidents and crimes do happen, so it’s worth making sure your business won’t suffer in the case of loss.

For the most part, insuring the possessions of your business is much the same as insuring your personal possessions. Simply tot up what they are worth, get a quote, and if you suffer a loss, claim on the policy. But there’s a little more to it than that.

When it comes to the possessions of your business, insurers broadly divide the categories up into three separate areas: buildings, stock and business equipment.

Vehicle insurance is considered completely separate. Usually you can get a policy that covers everything, but it’s worth considering what’s involved in each.

And in these credit-tight times, financial institutions are finding it harder than ever to make any profit out of lending money.

So they’re searching around for something else, and insurance is right at the top of the list. For SMEs, this is fantastic news. The more institutions that want your business, the fiercer the competition. And this will hopefully mean better policies at lower prices.

Banks earn huge commissions from selling insurance to customers – often the bank you have your current account with will offer insurance, even though it is not the company that actually provides it – and these costs, often as much as 30 per cent of the premium, are sure to be passed on.

Buildings insurance

If you have a mortgage on your property – and in most cases if you have a business lease – this will be a compulsory product.

While the lender retains an interest in your property, it will expect you to protect it.

If your premises are burnt to the ground, repaying the mortgage will be the last thing on your mind, but it will be the first thing on the lender’s agenda.

There is no industry-wide definition of what buildings insurance comprises, but basically it is what you would leave behind if you metaphorically tipped it upside down. So in addition to the walls, windows and roof, this should include fitted kitchens and bathrooms. It should also cover any outbuildings, such as garages or sheds – although you need to inform your insurer of their existence.

Most insurers require you to set an insurable value for your property and this can be where problems arise. The insurable value is not the same as the value of the property – part of that is the land, which you will still own even if there is nothing left on it. This is true even for office blocks, as you still retain the right to use that particular space.

The figure that needs to be insured is the rebuild cost. This is what it would cost to return the property to its existing condition if it were completely destroyed. It’s much less than the value of the property, but it’s almost impossible for

non-insurance specialists to work out themselves. There are so many variables to consider – the type of materials, the location, surrounding buildings and so on.

Insurers nowadays don’t really expect you to put a figure on it. Many insurers nowadays will work out the figure for you, based on the location and type of the property, and how big it is. They will then guarantee to cover any claim if a disaster does take place.

Buildings insurance can be comparatively cheap. The most common causes of insurance claims is crime-related, and most burglars tend not to steal the fixtures and fittings.

What the premises are used for will be key – if you’re just insuring an office, you’re not going to have to pay too much, for example, but if it’s a factory where gas cylinders are kept, or a restaurant – with a high possibility of fire – then you’re going to be paying more. If you have a regular stream of customers coming on to the premises, that will add to the cost, as damage is more likely to happen.

There is also likely to be a higher price if you are the type of business that attracts criminals – your windows are less likely to be broken in a burglary if you are an estate agent compared to a jeweller, for example.

Contents insurance

While no-one is going to force you to take it out, only a fool would fore-go the security of contents insurance.

Contents insurance is supposed to cover everything to do with your business that that you use to run it – not what you sell. So computer equipment, fixtures and fittings in a shop, machinery in a factory and so on.

Virtually all contents policies nowadays are written on a ‘new for old’ basis. This means that if you claim for an item that has been lost or irreparably damaged, you will get the replacement value, not what the item was worth before the claim.

But insurance companies don’t like handing out cash to claimants; they believe it encourages fraud. What companies do is attempt to replace the items for you. To save money, they have agreements in place with major retailers to provide them with claimed items. So if, for example, your computer equipment was stolen, the insurer would request a list of the products and would acquire them on your behalf.

Stock

This is essentially everything you plan to sell as part of your business – whether it’s the contents of a shop or warehouse, or even the output of your factory. Again, the price of the policy will depend on the value of the stock you typically hold, but also its fragility and its attractiveness to crooks.

Again, jewellers are likely to pay more. It’s not only a good thing from a cost control point of view to maintain as low a base of stock as possible, it’s also going to make it less expensive to insure.

Business types

Some insurers don’t insure certain types of business. Restaurants often need specialist cover, as do hairdressers and bookmakers.

Even those that promise to insure all businesses will often load the premiums onto firms they’re not particularly keen on.

So it makes sense to shop around.

Specified items

If you have any particularly valuable items – the amount depends on the insurer, but check if anything you own is worth more than £1,500 – then these will have to be specified on the policy. You may be required to provide photographs or serial numbers of the items.

Cut costs

Your insurance policy will be priced according to the risk the insurer sees of having to pay out. So anything you can do to protect your business will reduce the cost of the policy. Most of these are security related – installing a burglar alarm or a window locks will lower the premium, for example. Different insurers have different criteria, so it’s worth contacting yours to see where you can make savings.

Bundling

While it is not always possible most insurers recommend that you take out your buildings and contents insurance together.

By doing so, you could save money because many companies offer discounts for taking out both products. But also, if one company insures both your building and your contents, there is far less chance that in the event of a claim, certain items slip through the net. Most companies have very similar definitions of what constitutes buildings cover and what comes under contents, but if there are any grey areas it could cause a lot of heartache when you least need it.

Allianz Commercial has secured a multi-year partnership with Farleys Insurance Brokers to provide specialised SME packages to one of the broker’s key client sectors – dental and general practitioners.

Allianz will provide tailored solutions, designed to meet the specific needs of this market. The packages will cover a wide range of risks including property, surgery contents, liability and business interruption.

David Martin, head of SME, affinity and broker markets at Allianz, explained: “The package we have developed for Farleys offers a strong and specialised solution which is ideal for niche client markets. Our SME business is thriving as we continue to develop our proposition and we aim to expand into other client sectors in the near future.”

Marilyn Armitage, director of claims & schemes at Farleys Insurance Brokers, added: “Allianz understood our objective of offering an exclusive portfolio of cover and services, designed and costed specifically to suit the changing needs and strategies to small businesses.”

 

Sponsored article

Whilst making sure the right insurance is in place is important for SMEs, as a specialist small business insurer, Hiscox understands that business owners want to focus on what they do best – running their business.

So it has created a Business Insurance Decision Tree in the form of an infographic to help steer small business owners through the different types of insurance available to them. The Decision Tree looks at variables such as whether you work from home or in an office, how many employees you have and what type of property you own, suggesting applicable cover which best suits an SME’s needs.

So whether it is office contents insurance for damage to property, employers’ liability for those with employees, professional indemnity insurance when offering advice, or public liability insurance, the Business Insurance Decision Tree can help clarify which insurance is suitable.

Hiscox SME underwriting manager, Deepak Soni, commented: “SMEs are experts in their area, but we don’t expect them to be experts in insurance, that’s what we are here for. No two businesses are the same, so the Business Insurance Decision Tree is a useful tool to help SMEs understand the risks they face and get the right cover in place.”

The Decision Tree is available on the Hiscox website at http://www.hiscox.co.uk/business-insurance/tips-and-information/which-business-insurance-is-right/

Hiscox insures more than 100,000 small businesses in the UK, offering a range of business products, visit now for further information.