Is Your Insurance Cover Correct?
There are some Brokers and even some insurers who will provide an insurance quotation even though they must be aware that the cover they are providing is not fit for purpose.
Business interruption is often miscalculated and under insured, and in the event of a major claim, leaving the client with a large loss which could result with the business failing.
Brokers in order to compete with an existing renewal will try every trick to reduce the premium in order to gain the business. The client is completely unaware and quite happy to pay a lower premium.
We have found that one way to reduce the premium is to quote business interruption on a gross profit representing 12 months when the existing indemnity period is 24 months. This can roughly reduce the premium by about 30% but in the event of a claim the client will be underinsured. Brokers will also obtain quotes on reduced turnover and wages. This leaves the liability cover underinsured. Although this does not affect the cover it will produce a large additional premium at the end of the term.
There has also been an instance of a broker reducing material damage cover to indemnity only. This would only show up if there was a claim and the payment would not be on a replacement basis but on the basis of the value of the goods at the time of loss, less wear and tear.
If an insured is offered a premium well below their existing premium examine this very careful as it may not be worth the paper it is written on.
We are happy to discuss your Commercial Insurance queries with you – call us on 01707 883377 or email us on info@bromwall.com
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