Commercial Package Insurance was put together by insurance companies who wanted to simplify small to medium business insurance contracts. Their thought process revolved around a standard offering of essential covers onto which a customer could bolt on optional extensions to meet their individual requirements. In the early days the first products were in the retail sales areas for various shop trades. However, this soon extended with similar products for restaurants and takeaways, hotels and offices and in more recent times a small business package for trade business with a turnover up to £2,000,000. Indeed, some package policies have been developed specifically for areas such as charities and heritage based risks.
The basic cover is for contents split between stock, customer’s goods in trust, machinery and plant and fixtures and fittings. You are asked to provide a separate sum insured for each item and these are shown within the policy. Most packages offer automatic cover for business interruption (loss of profits); this valuable cover allows payment to be made to ensure the business can continue to trade and meet its obligations following a loss.
Without this income most businesses would fail, so you need to ensure the indemnity period is sufficient to allow a damaged property to be rebuilt should it suffer from a major loss.
With the package, insurers have included Public and Products Liability, Employers Liability, Glass, Goods in Transit and Loss of Money all for standard limits which would normally cater for the vast majority of needs. Policyholders are asked to make a decision between standard cover i.e. damage by a listed peril such as fire, theft etc. or full accidental damage which gives wider cover. At BH&S Insurance we would normally recommend the accidental damage option to enable us to get the majority of losses covered by the policy. Most policies offer a seasonal increase on the stock sum insured and you may need to adjust this to reflect the busiest time of the year for your particular trade.
The optional covers on a package contract are Buildings, Employee Dishonesty, Frozen Food, Loss of Licences and Legal Expenses although some insurers do include the latter as part of their standard cover; again to differentiate their contract.
As with any insurance it is important to disclose any criminal convictions, bankruptcies or CCJs and previous claims or losses as failure to do so may invalidate the policy cover. Please answer the questions set carefully particularly those relating to flooding or subsidence issues in the vicinity of your premises.
Insurers look for a well run business that carry out risk assessments and comply with health and safety legislation; many policies now include an electrical inspection warranty as electrical faults are a common source of fire claims.
Our advice can be invaluable on aspects of security, heating, handling of money and money security and many other issues affecting small to medium sized businesses. The insurers no longer tend to visit risks preferring to conduct telephone bases surveys; however we would be more than willing to call and discuss all your insurance options so you can take advantage of the wealth of experience at BH&S Insurance Services Ltd.
Policies expect a minimum standard of security to be installed and the policy is warranted that this be operational for the cover to operate. If you need alarm protection this will once more be warranted within the policy wording. It is a condition of cover that the alarm be operational at all times when the business is closed. Should this not be the case you must advise the insurer immediately.
Generally to avoid small claims you will be asked to pay the first £250 by means of an excess on all claims. Some insurers have either a lower excess to differentiate their policies or are imposing a £350 excess on certain losses to avoid increasing the premiums but maintain their profitability.