On the 1st of July, we were proud to be EleVAte’s headline sponsor for a second year. Our insurance experts, Kerri-Ann and Lisa, hosted a roundtable discussion to talk about all things VA insurance-related. Here’s a round-up of what we discussed.
Has your business diversified over the last year?
Some businesses have had to adapt and change, taking on different revenue streams because of the pandemic. If you’ve diversified, it’s important to let your insurer or broker know, so you’re still completely covered if something goes wrong.
Your insurer will tailor your policy to your needs. The cover you get takes into account what your business does and your company turnover.
Are you now visiting clients where you didn’t before or visa versa?
Things changed because of the pandemic, and there’s been a shift in where people are working. It could be you’re now able to work virtually, or new ventures mean seeing clients face-to-face.
Public liability (PL) is a good idea if you’re meeting customers, clients or suppliers face-to-face. PL covers you if a third party has an injury in your workplace or if you accidentally damage their property. For example, if a visitor slips on a wet floor in the office kitchen, or you accidentally break a supplier’s laptop during a meeting – either at your office or off-site.
On the flip side, if you were out and about but no longer have contact with other people, you may want to remove PL from your policy. You don’t want to pay for something you don’t use.
Have you taken on, or are you considering taking on employees?
If you don’t have any employees but are thinking about it, you need to know a few things.
First, it’s a legal requirement to have employers’ liability (EL) insurance if you employ people. EL protects you if a staff member hurts themselves while working and then claims against you because of the injury. And an accident or a long-term issue. For example, if they tripped over a left-out ladder or suffer from a back problem after not having the right office chair.
It’s also important to consider how your other policies cover people who work for you. Your public liability and professional indemnity will cover any staff and the work they do as standard. But, your policy might not include freelance or contractors, so it’s worth checking your policy wording.
Can I buy employers’ liability insurance as an add on to my current policy?
Most insurers will offer employers’ liability (EL) if you purchase public liability (PL). You can add EL to your existing policy at a later date if you need to. However, EL is usually bought as part of a package, so it’s not always easy to purchase it independently. It’s best to give us a ring if you find yourself needing to add on EL and we can adjust your cover.
EL can be priced competitively, and most insurers will offer £10 million cover as standard. However, the amount you pay as a premium can vary depending on how many employees you have and how much you pay in wages.
Have you bought more tech equipment over the last year? What are the implications for your insurance?
The pandemic has seen a lot of businesses purchase more equipment to allow for flexible working. It’s worth checking your policy wording to see how much equipment cover you have.
When you consider your business equipment, make sure you don’t underestimate the value. And be sure to include all your portable equipment on your cover – phones, laptops etc.
It might be worth considering writing an inventory of the items you have. It’s surprising when you write everything down how much it can total. Some insurers have value brackets, so that’s worth checking.
When you tell your insurer the value of your items, be as accurate as you can. And don’t underinsure yourself.
As an example, you might have £10,000 worth of items in your business, but you only ever take £2,000 with you on a job. In that scenario, some people may be tempted only to insure their equipment for £2,000. The difference in value would mean you’re underinsured, and some insurers have an ‘average clause’ to deal with this.
This means if your insurer discovers you’ve got more equipment than you’ve said and you make a claim, your insurer could pay you less. And the amount they pay you will most likely be a percentage based on how much you’re underinsured.
Most insurers won’t ask for evidence of the items you’re covering. But It’s worth keeping your purchase receipts and proof of ownership as if you claim it can move things along quicker.
Have you outgrown your level of cover?
Your level of cover’s always worth checking.
Employers’ Liability is the only business policy with a standard limit (£10 million), so there’s no option to increase or decrease your level of cover. The amount you pay as a premium may change based on the number of employees you have and your total wage bill, but your level of cover will remain the same.
Public liability, professional indemnity, cyber etc., all have different ranges or levels of cover. If things have changed within your business, it’s a good idea to check your cover limits, just in case.
When you’re thinking about how much cover you should have, think about your day-to-day work. If you were to make a mistake, what could the financial knock-on effect be? That won’t give you an exact answer but should give you an idea of the levels of cover you might need.
Sometimes you might need a minimum amount for a contract, i.e. £1million professional indemnity could be specified. You can change your level of cover due to contract requirements midway through your policy if you need to.
What do you need to think about, insurance-wise, if you work in a converted shed/garden office?
First, are you keeping equipment in your garden office when you’re not there, for example, overnight? Second, does your insurer know there’s equipment kept in an outbuilding?
It’s worth checking your policy wording, as some cover may have restrictions on the type of buildings where items are kept or stored.
Personal home insurance may or may not cover you for business equipment – it depends on your cover, as it’ll vary. Some policies don’t cover business equipment despite your work kit being in your home (or outbuilding). But it’s worth checking as you don’t want two policies to do the same thing.
Something else to think about is if you’re having clients visit you in your garden office. You may need public liability to cover any mishaps that occur while they’re on the premises.
Can you explain what a ‘hardening market’ is?
A ‘hardening market’ is insurance jargon. And there are two different types of “markets” in insurance.
- A soft market’s where premiums are low and on a downward trend.
- A hard market (or hardening market) is where premiums are on the rise.
Hardening markets tend to happen when claims are on the increase. These claims push insurers out of the market. So fewer insurers are covering similar risks. These insurers then put up their premiums to cover risks for the claims they might see. Recent events also have an influence – such as Grenfell and other natural disasters.
There was also something called the Lloyds review that happened a couple of years ago. Lloyds is essentially a marketplace for insurers. They found insurers were undercharging for premiums. And if things didn’t change, there wouldn’t be enough money to pay for potential claims in the future.
The effect of the Lloyds review, unfortunately, also coincided with the start of the pandemic.
We hope we’ve managed to answer all of your VA insurance-related questions. If you have more, talk to an expert on 0345 222 5370 or email [email protected].
For a quote, visit www.policybee.co.uk/APVA. APVA members get up to 10% off professional indemnity and public liability insurance, and up to 5% off cyber insurance