Insurance FAQs

May 30, 2022

Insurance is essential to any individual – homeowner or tenant – as well as business owners.

Here are some frequently asked questions relating to various elements of both general and business insurance.

Is insurance a legal obligation for my business?

There are just two types of insurance you are under any legal obligation to arrange:

Employers’ liability insurance

you must have employers’ liability insurance of at least £5 million the moment you employ anyone else (with a few limited exceptions) to help in your business;

this is to ensure you have sufficient funds to meet claims from employees – or even former employees – who have been injured during the work they do for you or who have contracted a longer-term illness or condition; and

Motor insurance

you are almost certainly to have a vehicle or vehicles – for either personal, business use, or both – and the law insists that every one of them must be insured as a minimum against third-party risks. You may choose car/van insurance or motor fleet insurance.

But the protection of insurance extends well beyond those legal requirements – and is likely to be necessary to safeguard your own and others’ financial interests:

if you have a mortgage, for example, your lender is almost certain to insist on adequate building insurance;

if you provide professional advice or services in your business, you may need the protection of professional indemnity insurance; and

you will want to insure any plant, machinery, equipment, or stock in trade against theft, loss, or damage.

This is to name just a few areas in which the appropriate form of insurance could save you money – and the very viability of your business.

How do I know my rebuild value?

Talking of building insurance, you may often see references to insure the building to the value of its reconstruction costs – how do you calculate that value?

The total building sum insured needs to be enough to cover all the costs of clearing the site and rebuilding your premises following a significant event that results in a total loss.

For residential properties you can use the ABI/BCIS residential rebuild calculator.

For commercial properties you may need to seek professional advice.

How do I make an insurance claim?

Citizens Advice provides a handy step-by-step guide to making any insurance claim (In England) – and their advice applies equally to any claim you might want to make in connection with your business.

The golden rule is to let your insurer know as soon as possible after any loss or damage – or suspected loss or damage – occurs. Then, after taking an outline of the details by telephone, they will send you the appropriate claims form, and you must take it from there.

If you have an insurance broker, they typically provide invaluable help in completing what can sometimes be a complicated claims procedure.

What is a loss adjuster?

Where a larger claim is made, sometimes a loss adjuster is employed to investigate. They are not there to try and “catch you out” or reject a claim. They are there to protect your interests.

The Chartered Institute of Loss Adjusters (CILA) explains that these are the “industry experts” in handling insurance claims.

They will assist an insurer by tackling two of the most basic issues of any claim:

is the loss or damage covered by the insurance policy; and

if it is, what is the fair value of any settlement?

Why hasn’t my premium gone down if I haven’t made a claim?

Your insurance premium may go down if you haven’t claimed in the preceding year – typically, you may qualify for a no claims discount (NCD).

But there are a host of other factors determining the price of your premiums, and, although you might not have made a claim, other factors are likely to have prompted an increase in the cost of premiums by your insurer.

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Insurance FAQs

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