In the same way as setting the cost of a self catering holiday includes many factors, so the way in which an insurance premium is calculated takes into account many of the ‘personal’ factors unique to your business as well as wider geographical and social issues.
When you apply for insurance you will be asked for your all important postcode and it this that helps to determine the ‘natural’ risks that your property may experiences, such as flood, storm, subsidence as well as the social aspects of theft and malicious damage. The age and construction materials of the property are also important – a stone built building can experience weather related incidents better than a timber building.
Costings will include a charge for the public / product liability and employers’ liability insurances and reflect that not only – for very genuine and essential reasons – may the claim take a long time to settle, consideration has to be given to external factors such as the Ogden Rate which is set by the Government.
Your claims history can also affect the premium as a regular claimant will pay more (or not be able to obtain cover) should they have had a poor experience.
Will the premium be the same as last year? Almost certainly not. Your insured values will increase by index-linking, and changes outside of your control, and outside of the control of the insurers, may have happened – eg storms and floods. The cost of claims increases year on year.
The most important point to make is to have the correct and widest cover at a sensible cost from a provider who specialises in your sector – and across the country there are only four or five of us!
David J Morris ACII
Chartered Insurance Broker
J L Morris (Insurance Brokers) Limited