Recent research from Aviva, the UK home, car and business insurance company, shows that there are nearly 15% of businesses operating without insurance. This is nearly 1 in 6 businesses, and is an increase on the last few years when it was around 1 in 8. Whilst there are always going to be businesses that are foolish enough to trade without cover, there are many different options available to you if you are simply considering not renewing or canceling your cover.

The research does not specify whether there are businesses that are trading without any form of cover, or whether they are trading without the right levels of cover. There are certain legal covers, such as employers liability insurance, that we all know we need and should have, otherwise you could face a daily fine of £2,500. But, in addition to the legal covers, there are other sensible, prudent covers that everyone should have simply to protect the business.

It can be tempting, given the nightmare economic situation we are living it at the moment, to simply ignore your business insurance renewal notice when it lands on your doormat. Here at Businessinsure, we work for all types of small business and the average annual premium is around £750. When you are faced with an annual bill for this amount it will always be difficult to find the cash to pay the bill.

This is probably the situation facing many businesses that choose to go without cover. They think they will trade for a few weeks until things get better and then the weeks turn into months and before you know it, you are faced with a loss and there is simply no insurance cover in place.

We have just renewed a shop insurance policy that had a small increase applied because of previous claims. The client was unsure whether he could afford it and we offered him a few different options. Low and behold, two days after the renewal there was an attempted break in, the shutters to the shop were damaged. The bill, including the call out was £1,800. The insurance bill was less than a £1,000 and he is of course pleased that he had the correct cover there.

Instead of trading without the cover, there are different steps you can take.

Step 1

Trade without cover. We have to mention this, because it is an option. However, we would never recommend this as it is simply not worth the risk. You always expect never to have a claim, but when you do, it is never for a small amount. Crime is in the increase and as we have seen over the past few days, the spectre of National flooding in the UK is never far away, and this is in the summer! Wait until we get to the winter.

Step 2

Review your sums insured. This is a step we go through with every commercial insurance customer at renewal. A simple, single page, declaration is issued which contains all of the current sums insured. The customer then returns the form with details of their current figures, IE stock levels, turnover, gross profit and wageroll. If business is down on previous years, it is likely that these figures are reduced as well. This results in a reviewed, and reduced, insurance premium.

Step 3

Take the monthly option. If you are faced with a big bill or even just an unchanged premium from last year, there is always the option of paying the premium monthly. Many insurers will offer installments over 6, 10 or 12 months. A reducing number will also offer interest free installments. Sure, there is a cost from your bank for paying installments but this is only a few pence every month. If, as you should do, you deal through a business insurance broker, speak to them about the payment options available.

Step 4

Get a different quote. Each insurer has different relationships with their different broker partners. Just because insurer A offers a quote at a certain premium, this does not mean that insurer B won’t be able to offer a better price for comparable cover. The danger here is that you just visit a website that offers to compare business insurance. These sites are designed with one thing in mind. To offer you the cheapest price. Whilst this may sound good and the headline flashing amount they offer you on their site looks good, as with everything, you only get what you pay for. You could save yourself ten percent but then when you have a claim, such as the one above, you realize that you do not have a £100 excess, but it is £500. This is where you need to speak to a broker. If they offer you different deals then they are obliged to tell you about any significant terms, conditions, limitations, warranties and excesses.