How package insurance protects your business

September 11, 2023

You’ll know that appropriate insurance is one of the best ways of protecting against risks of loss or damage. That’s all well and good, but if you are running a business, those perils tend to be many and varied – including everything from property insurance for the premises where you are based, cover for your employees, public liability, business interruption, cover for stock in hand, any plant and equipment you use, and a host of other risks.

Even though the list might seem relatively disparate, cover against that whole package of risks can be helpfully combined in a single insurance premium. This type of business insurance is aptly described as package, packaged, or combined insurance – for fairly obvious reasons. Indeed, the Association of British Insurers (ABI) remarks that business insurance is typically sold as a “package”, combining several different policies under a single premium.

The evolution of package insurance

Insurance is a financial services product that has evolved through several stages over the years.

Whereas risks once needed to be insured one at a time – one policy for fire, one for storm damage, another for escape of water and so on – each could be brought under a single umbrella – a comprehensive offering that would combine multiple insurance policies within a single package. Package insurance was born.

Package insurance for your business

Depending on the nature of your business, you are likely to have quite wide-ranging insurance needs. The structure and fabric of your premises may need suitable building insurance, for instance, and you will almost certainly want the protection of public liability insurance. If you employ others to help run your business, the law requires that you have a minimum of £5 million in employers’ liability insurance.

Then there is your stock to protect, along with any equipment or machinery used in your business operations.

The purpose of a business insurance package is to provide your enterprise with a convenient and cost-effective way of managing all these insurance needs within a single policy. Instead of buying separate policies from the same or different providers, a package lets you bundle together the multiple types of cover you need – effectively a pick-and-mix blend of the cover needed for your particular business.

Such a business insurance package also has the advantage of:

• just the one point of contact for any issues or claims that you might later need to make on any aspect of your business cover;
• a single annual renewal date for all your insurance needs for the business – typically more cost-effective as well as avoiding the potentially disastrous omission or oversight of failing to insure some vital aspect of your business.

Seasonal changes

Within your particular business package, you will typically find the flexibility you need to adjust the limits of cover for specified risks along with the excesses that apply to claims under each heading.

That flexibility may be especially useful when you prepare for seasonal changes – such as Christmas, Easter, and other public holidays – when you are likely to be carrying more – or seasonal – stock in trade.

It is important to note that some (but not all) commercial insurance policies automatically offer a temporary seasonal increase in their respective total sums insured – if you are unsure if you have this element of temporary increased cover, please speak to your insurer or broker.

Further reading: Seasonal sum insured increases – is it enough?

Finally

Naturally, you will want to understand and give careful consideration to the scope and limitations of your business insurance package so that the terms, conditions, and exclusions are clear from the outset.