Business Review Through Covid-19
Business Review Through Covid-19
Posted on 14th October 2020
What insurance areas should business owners be reviewing during the current situation? Like most businesses we had to react quickly to the change in circumstances that COVID-19 brought. As we look after many different businesses across many different trade sectors, there were some common areas that all business owners can (and still should) review.
The first revolved around equipment. Many offices were stripped as staff took computers, screens, printers, scanners etc home. It is important for business to keep an inventory of all items that left the building and where they went. Many insurers extended cover to employee’s homes (most did not charge) however this was for a temporary period, so check with your insurers to see if this cover is still in place and if not, put those measures in place. Have these items now been returned? we now see many businesses (especially offices) in a split position between working from home and in the office. Ensuing your insurers know your circumstances will enable them to tailor the cover to your current situation.
The second area revolved around unoccupied properties. Most policies had an unoccupancy warranty for periods of over 30 days. Most insurers extended this period (but it is always worth checking with them to ensure yours was extended). However, although many businesses have returned there are still many who have not. Check with your insurers to see if your current occupancy situation is triggering this restriction in cover.
Thirdly - the pivot, or adaptation of businesses. Many of our clients diversified into new trade items, market sectors, switched from wholesale to retail or started deliveries. All of these things can impact cover. Make sure your insurers are aware of your revised activities.
Next, financial changes. Company turnovers, gross profit and wages all drive cost of premiums (and are linked to cover). If your business had been negatively affected in these (or any other) areas, ensure you update your insurers as this could result reduced premiums (always a good thing!). Conversely, we have seen some businesses experience unusual growth, again it is important to make sure your insurers have the most up to date figures to ensure adequate cover.
Cancellation of Cover
Avoid unnecessary cancellation of cover. We did see incidents of clients removing cover to save costs, only to find that the unusual set circumstances we are all operating in this year has actually increased the risk of loss. Now is a good time to review your arrangements and consider what your business is planning on for the year ahead and modify your insurance to help provide protection for this period. Certainly, removal of cover should come with an awareness of what that leaves the business exposed to.
Risk identification, management, avoidance. Call it what you will, but this area is about recognising what risks your business faces (insured or not) and then doing what you can to minimise that. With some practice nearly all risks can be reduced in some way. We do provide our clients with access to many templates to help in this area. From full multi-page risk assessments to simple infographics or documents to help with working procedures. Our library is truly huge in this area. Not only does this help a business owner recognise the threats they face but also helps to set out plans to reduce them.
A well-managed business, and one that can provide evidence of this is often easier to insure and can bring reduced premiums and/or superior terms.
Finally, talk. I know, everyone wants their insurance to be cheaper and often that is their focus, which I totally understand. I've lost count of the times a potential new client will hand me a schedule and ask me to make it cheaper. I'm happy for every opportunity but if that current schedule is wrong or missing some key covers, wouldn't you want that to be highlighted?
However, as your professional advisors, often the best way that we can protect your business is to understand it. What markets are you breaking into? Are you thinking of buying more machinery (or selling). Are you tendering for larger contracts? Are you making staff redundant (or hiring). Are your clients outside the UK and is this increasing or decreasing? All these and so much more can impact which insurers we would approach and who would be best for you for the year ahead. It never fails to surprise me how much we can discover from a discussion.
I hope this is useful to some, and if anyone wants to see more of our risk management documents we have put a few examples our LinkedIn page:
Aspire Insurance LinkedIn
Alternatively, if there's something specific you'd like me to help you with, drop me an email at: firstname.lastname@example.org
Tristan Webb - Managing Director