During an unprecedented event such as COVID-19, a number of individuals and businesses might understandably be looking at ways to reduce their costs. Ben Hastie, Director of Sales and Distribution at Resilium Insurance Broking, says that while cutting costs and protecting your cashflow is understandable in times of uncertainty, one cost that you should not consider cutting is insurance.
“COVID-19 has actually made it more important than ever to be insured,” explains Mr Hastie.
“There are more risks to business disruption due to COVID-19 and many of us now working from home which has resulted in a huge surge in Cyber attacks that can hold your business to virtual ransom.”
“However, the Coronavirus has also left some areas of insurance where you can reduce your coverage without leaving yourself exposed risk,” says Mr Hastie.
“We’re living in different times due to COVID-19 and there are many insurers out there offering some fantastic initiatives to help reduce insurance expenses,” he says.
“You’ve just got to do your research or have a Resilium Adviser do it for you.”
Here are a number of insurance expense reduction initiatives that you can consider right now.
1. Increase your standard policy excess – consider a higher excess as this can result in great savings, while still ensuring you remain protected for significant losses.
2. Consider premium funding on renewal – this will allow you to spread the cost of your insurance out over a 12-month period, as opposed to one significant payment upfront.
3. Review your Sums Insured – whilst we don’t advocate reducing the sums insured on your key areas of cover protecting your assets, it is worth reviewing them to check if the current levels can be reduced. Always however ensure that your sums insured still represent the replacement value of your assets.
4. Consider the covers you have in place – particularly those that in the event of a loss, will not largely impact your business in the long term. You still need to consider your individual circumstances and not leave yourself exposed to a substantial loss, however some possible examples are:
- Glass Insurance – assess your level of exposure to glass breakage and if this is an absolute requirement in your case.
- Money Insurance – this typically covers cash which may be stolen. Do you have significant quantities of cash in your business at the moment?
- Equipment Breakdown – this can be an expensive component of your insurance given the nature of cover provided. Whilst machinery and electronic breakdowns in your business can come at a significant cost, it may be worthwhile considering a good maintenance agreement with your servicing agents to assist in avoiding breakdowns.
5. Deferred Premium Payments for businesses (with some insurers) – Several insurers have recently introduced a number of measures to assist clients experiencing financial hardship, offering the option to defer premium payments for up to six months on renewal of their existing policy. Please note that insurers have made it clear that it is only a deferment of the premium due for up to 6 months –the full premium applicable for the 12-month period will need to be paid in 6 months’ time.
6. See if you can lock in some price guaranteed insurance – this means your premiums will be protected against any increases. COVID-19 has affected insurance companies too, with reducing premium pools and increased claims which could see some significant increases in price in the years ahead.
7. Unoccupied premises – most Business Package and other property insurance policies generally have an exclusion in them for property unoccupied for a period of time (normally between 30 and 60 days), meaning cover will be excluded for most claims. Talk to your insurer to see if they can offer continuity of cover for business premises unoccupied due to COVID-19, with no changes to premiums, terms or conditions. Talk to your Resilium Adviser to find out more.
“COVID-19 has occasioned many changes to the way we live and work,” says Hastie. “Now is the time to ensure your insurance will cover your goods or business despite the changed circumstances due to COVID-19.”
“Talk to a Resilium Adviser today to find out how we can keep you covered for risk, while at the same time potentially reducing your costs.”
The information provided in this article is of a general nature only and has been prepared without considering your individual objectives, financial situation or needs. If you require advice that is tailored to your specific business or individual circumstances, please contact Resilium directly.