Shop & Retail Insurance

This covers everything you might naturally expect plus some things you might not have considered.

Your stock in trade, money, public and employers liability are all included, plus electronic equipment such as cash registers, computers etc.. If you carry high theft risk stock such as spirits, tobacco, car radios you must declare a separate sum insured for these because they will affect insurers view of what is adequate security in your case.

If your premises are not your own but have improvements paid for by you these need to be covered under your policy because the landlords building insurance policy (which you will be paying for either in full or in part) will only reinstate the landlords property prior to your improvements.

If you do own your premises then they can be covered in the usual way but do not forget to tell us if any part (e.g. a flat over the shop) has been sublet or sold on a long lease to a third party.

Loss of profits is another standard feature and the purpose of this is to replace your income should you be unable to trade because of an insured peril occurring. In plain English, if you have a fire and you are insured for fire damage and as a result you are unable to open for business your insurers will pay you your lost gross profit (income less cost of purchases sold), thus allowing you to maintain your drawings, pay staff and the rent etc.. Remember that you will have to provide proof of your turnover and profits at the time of a claim. Unrecorded sales do not count.

Generally speaking the lower the premium the higher the level of security required by insurers. A burglar alarm fitted by a NACOSS (National Approval Council for Security Systems) installer with central station signalling by BT Redcare is always the preferred choice, even when it is not mandatory. However, tell us what security you have and we will endeavour to work with you.

Office Insurance

If you are in a service industry or another business that does not sell a physical product, you need office insurance, even if your premises are in a shop. Accountants, solicitors, financial advisers and estate agents are all examples of businesses that need this type of insurance.

Public and employers liability, money and your contents are all included. The contents sum insured will reflect the value of your office contents, furniture, computer equipment etc. The value must be based on their replacement as new.

If your premises are not your own but have improvements paid for by you these need to be covered under your policy because the landlords building insurance policy (which you will be paying for either in full or in part) will only reinstate the landlords property prior to your improvements.

If you do own your premises then they can be covered in the usual way but do not forget to tell us if any part (e.g. a flat over a shop) has been sublet or sold on a long lease to a third party.

Loss of profits is another standard feature and the purpose of this is to replace your income should you be unable to trade because of an insured peril occurring. In plain English, if you have a fire and you are insured for fire damage and as a result you are unable to open for business your insurers will pay you your lost gross profit, thus allowing you to maintain your drawings, pay staff and the rent etc.. Remember that you will have to provide proof of your turnover and profits at the time of a claim. Unrecorded sales do not count.

Generally speaking the lower the premium the higher the level of security required by insurers. A burglar alarm fitted by a NACOSS (National Approval Council for Security Systems) certified installer with central station signalling by BT Redcare is always the preferred choice, even when it is not mandatory. However, tell us what security you have and we will endeavour to work with you.

Surgery Insurance

Doctors, dentists, acupuncturists, Chinese herbal, and other alternative medicine practitioners are all examples of businesses that need this type of insurance.

Your contents sum insured will reflect your office contents, furniture, computer equipment etc. The value must be based on their replacement as new. Public and employers liability will be covered but not treatment risks which are normally covered through a trade body such as the BMA (British Medical Association).

If your premises are not your own but have improvements paid for by you these need to be covered under your policy because the landlords building insurance policy (which you will be paying for either in full or in part) will only reinstate the landlords property prior to your improvements.

If you do own your premises then they can be covered in the usual way but do not forget to tell us if any part (e.g. a flat over a shop) has been sublet or sold on a long lease to a third party.

Loss of profits is another standard feature and the purpose of this is to replace your income should you be unable to trade because of an insured peril occurring. In plain English, if you have a fire and you are insured for fire damage and as a result you are unable to open for business your insurers will pay you your lost gross profit, thus allowing you to maintain your drawings, pay staff and the rent etc.. Remember that you will have to provide proof of your turnover and profits at the time of a claim. Unrecorded sales do not count.

Generally speaking the lower the premium the higher the level of security required by insurers. A burglar alarm fitted by a NACOSS (National Approval Council for Security Systems) certified installer with central station signalling by BT Redcare is always the preferred choice, even when it is not mandatory. However, tell us what security you have and we will endeavour to work with you.

Property Owners

You can get a good indication of the cost of insuring a Let Property here.

You can get a good indication of the cost of insuring an Unoccupied Property here.

If you own a property that you do not occupy, you need property owners insurance. Whether the property is a private house, commercial premises or combination of the two, property owners insurance will cover physical damage and in addition your liability should someone by injured which on the premises through your fault or negligence.

It is vitally important that insurers are given accurate details of the trade of all business occupiers and in the case of private tenants whether they are paying the rent themselves or it is being paid by a third party such as the DHS. If your insurers have been misled you will find that your insurance is rendered null and void – just what you do not want following a major fire.

Finally, do remember to tell your insurers when the premises are wholly or in part unoccupied because while this may be acceptable for a short while, particularly during renovation work, any longer and they may decline to continue the policy as it stands. Cover will still be available but possibly only through a specialist insurer and at a higher price than you were paying previously.

Public and/or products and employers liability

Whatever your business you must have public liability insurance (PL). This insurance protects you in the event that someone other than an employee is injured or property damaged as a result of something that you have done or caused or allowed to happen. Premiums start at less than £100 for a self employed individual in a low risk business, but will be very many times this for a high risk occupation such as welding or scaffolding.

Products liability is usually included with PL where you are manufacturing or supplying a product which if faulty or used incorrectly without proper instruction, could cause injury or damage. Although recall of a product is not covered, only the agreed injury or damage, product recall as a separate class of business is available.

Once you employ anybody you must by law have employers liability insurance (EL) which covers the employer for any injury that befalls the employee in the course of their employment. While there is no legal requirement to take out PL and therefore no minimum level of indemnity, EL must provide a minimum of £5 million of indemnity (although £10 million is more common) and the certificate proving that the cover was in force kept for at least 40 years. This is because in the past is has often been almost impossible for employees, employers and often insurers to establish who was responsible for the origination of long term illnesses such as industrial deafness, asbestosis and emphysema.

Following many years of over capacity in world insurance markets which resulted in unrealistically low premiums, reduced profits, reduced reserves necessary to pay for major catastrophes such as September 11th and ever increasing personal injury claims both in number of claims and size of payment, all insurers are now looking at the liability business they are insuring very closely. We have seen a premium of £4500 in 2000, become £9000 in 2001 and £60,000 in 2002. This example is not unusual, but also not to be taken as an example of typical year on year increases.

Small businesses requiring liabilities only in low risk industries can generally be quoted within an hour or so. Large business and especially those operating in high risk areas take time, often a week or two to place depending on their claims experience.

Finally, do not confuse pubic liability with professional indemnity insurance. If you are paid to provide advice you must have professional indemnity cover.

Excess public liability

Sometimes a public liability insurance limit of £1 or 2 million is not enough for your customer but your existing insurance company may decline to give you a higher limit. Local authorities, other public bodies and large contractors may demand that you have £5 million pounds of cover but this does not have to be provided by a single insurer nor will it cost the same for each million. Because the majority of claims are for significantly less than £1 million this limit is usually the most expensive with subsequent millions costing rather less.

We can arrange to top-up your basic limit to virtually any level necessary using an additional one or more insurance companies depending on the limit required and your trade.

Directors & Officers

With UK and EU legislation increasingly affecting most aspects of corporate management, it is all too easy for directors, quite innocently and with no dishonest intent or criminal motive, to breach their duties - with potentially disastrous consequences for both themselves and the company. Frequently, the mistake they make will not be uncovered for some time. Then, armed with the wisdom of hindsight, a zealous shareholder, group of institutional shareholders, liquidator or other interested person may use that mistake as a hook on which to hang a legal action against the individual director or officer.

No longer can directors rely for protection on the separate legal personality of their company -'piercing the corporate veil' has become an increasingly common occurrence. 'Limited liability' is protection only for the shareholders - not for the director, whose personal liability is real and unlimited. Legislation, as well as judicial opinion, confirms that not only are onerous responsibility and duties imposed by law on directors, but also that there is a significant risk of personal liability attaching to them.

All directors should now be reassessing the full extent of their duties in law and their exposure to personal liability. The number of occasions when actions could be called into question, and subsequently regarded as wrongful, is far greater than one might at first imagine. They include negligent advice or misstatement (particularly in the context of a merger or takeover, when, for example, a failure to understand economic trends results in a poor forecast of the company's performance), any act which goes beyond the limits of the company's constitution (such as excessive borrowing), unauthorised payments (however innocently made), failure to disclose the full extent of the director's interests, as well as the failure to comply with a myriad of stringent statutory requirements.

Exposure to personal liability may also arise from a director's unavoidable conflict of interests, the making of loans, imprudent investment, the negligent supervision of delegated responsibility - or just plain error of judgment, particularly in allowing the company to carry on trading at a time when, with hindsight, it should have ceased.

Clearly, all directors need to exercise due diligence in avoiding, as far as they can, such personal liability.

But they will never be able to eliminate risk of loss totally - their safety net should be the protection afforded by directors and officers liability insurance ('D&O').

Claims examples

• A director of two companies who allowed the businesses to become closely mingled, failing to set up formal financial and structural arrangements, was found in breach of his common law duty of care when one of the companies became insolvent.
• A director of a wine importing company was disqualified for 12 years and ordered to pay £1.3 million for wrongful trading in a precedent setting case which could allow liquidators and the DTI or Official Receiver's Office to save time and costs by jointly pursuing their claims where there is a common interest.
• Directors of a well-known hotel chain who relied on accounts which they knew to be inaccurate when authorising payment of dividends, were found personally liable to repay £26.7 million in respect of those dividends authorised, even though they had not benefited from the payment themselves.
• A director was disqualified for four years after a liquidation in which the company had prioritised its payment of debts, with the aim of trying to continue trade and ultimately to be able to payoff the other creditors.
• Two directors of a road haulage company were convicted of corporate manslaughter, both receiving suspended sentences, where a driver employed by the company fell asleep while driving one of the company's trucks, killing two motorists.
• The co-founder of a well-known visitor attraction who registered the company trademark in his own name was found to be in breach of his fiduciary duty as a director, since he knew before registering the mark that it was being used by the company and that the company was generating goodwill in the mark by and on behalf of the company.
• Fourteen directors of a privately-owned delivery business were banned after the company became insolvent last year. This is the largest number ever to be banned in one company. The company had a turnover of £3 million and losses of just under £1 million. The books and records were found not to be up to the necessary standards and there was a lack of adequate working capital.
• Three former directors of a well-known residential estate agency and provider of financial and property services were fined by the Securities and Futures Authority for their roles in the £1.2 billion aborted hostile take-over bid for a family of co-operative businesses, after they were found to have failed to act with due skill, care and diligence in their receipt of confidential information in the preparation of the hostile bid.
• A UK company and named directors face a class action suit in the US alleging breaches of the Securities Exchange Act 1934 following issuance of press releases. The suit alleges these contained "material misrepresentations to the market".
• The former chairman of an auction house faces a class action suit in the US alleging price fixing. The suit was filed after another auction house disclosed it had been granted conditional amnesty by the US Justice Dept with respect to the government's antitrust investigation into anticompetitive conduct involving the two auction houses.
• The managing director of a clothing manufacturer faced a £2.5 million libel action over comments he was alleged to have made when asked his opinion about some material being put on the market. Despite winning the case he was unable to recover £250,000 legal costs.

Commercial Legal Expenses?

As ever following the lead of the United States, Britain is becoming increasingly litigation minded. The encouragement to sue and make a few thousand pounds could come from a television advertisement, newspaper or even a legal agent waiting outside the school gates asking if there have been any accidents that day.

Employers are vulnerable to claims that can cost thousands of pounds to administer (and much more to ignore), arising from employment disputes, legal defence, tax investigations, VAT disputes and more. Your legal costs can be insured at reasonable cost but if you think it could not happen to you, take a look at these examples:

CLAIMS EXAMPLES

CONSTRUCTIVE DISMISSAL

Following the unexpected resignation of our policyholder's head housekeeper to take up alternative employment, our policyholder was surprised to be the subject of a claim for alleged Constructive Dismissal on the grounds of sexual harassment. The ex-employee alleged she had been subjected to sexual comments and advances from the hotel manager, which had made her situation intolerable.

Solicitors were appointed who, finding the ex-employee's representative evasive on the details of the alleged incidents, undertook a considerable amount of investigative work to try to establish the dates of the alleged incidents and the names of witnesses. This was a highly complex claim with the ex-employee seeking £12,000 in compensation.

On the day of the Employment Tribunal the case was settled before the hearing started, when the policyholder agreed to pay the ex-employee the sum of £2,000. This was considered to be an extremely satisfactory conclusion, particularly as there was every indication the case could have gone on for 4 to 5 days. Legal expenses insurers paid the costs involved which amounted to £12,810.

UNFAIR DISMISSAL

Following the failure of their accounts manager to transfer accounting information on to computer, despite assurances that the job was under way and deadlines would be met, there was a disciplinary hearing at which he was invited to resign and work one month's notice or have his employment terminated. When he refused to resign, our policyholder terminated his employment and paid him only what he was due up to the day he left their employment. The ex-employee alleged Unfair Dismissal and applied to the Employment Tribunal. Legal expense insurers appointed solicitors to act on the policyholder's behalf.

After a full day's hearing, the claim for Unfair Dismissal was rejected. However, the Employment Tribunal did find that in fairness, the policyholder ought to have paid the ex-employee up until the end of the month. Therefore an award of £1,328.00 in compensation was made. Fortunately for the policyholder, the insurer paid both the solicitors' costs of £4,206.86 and the £1,328.00 compensation award.

TAX PROTECTION

IN-DEPTH INVESTIGATION

Following receipt of a policyholder's year-end company accounts, the Inland Revenue decided to carry out an in-depth investigation. The reasons given for this were the erratic business performance judged by gross profit and the general level of directors' remuneration. Although the policyholder's own accountant was initially appointed because they had already carried out a lot of work and were familiar with the policyholder's tax affairs, when matters did not seem to be progressing; the policyholder requested a change of accountant. Legal expenses insurers appointed a panel accountant who could see immediately that the Inland Revenue's position had become very entrenched during the 3 years the investigation had been running. They arranged several meetings with the policyholder and Inspector of Taxes and undertook a considerable amount of work analysing and preparing the policyholder's statements.

Following this, the acting accountants were able to refute all the Revenue's arguments, and eventually the case was settled on a minor technical adjustment. The policyholders expressed themselves as delighted with this outcome. Legal expenses insurers paid the costs incurred by both accountants, plus those of the self-employed company director, whose assistance had been instrumental in reducing costs, which totalled £12,721.

Club Insurance

We insure a broad range of clubs - from Golf Clubs to Lap Dancing and Nightclubs to Social Clubs. We use a number of different insurance companies because no single insurer is able to provide cover for every type of risk.

We can insure as little as public and employers liability, or provide a comprehensive package of benefits that could include premises, tenants improvements, stock in trade, lighting and dance equipment etc.

Some of the common issues are discussed here:

If your premises are not your own but have improvements paid for by you these need to be covered under your policy because the landlords building insurance policy (which you will be paying for either in full or in part) will only reinstate the landlords property prior to your improvements.

If you do own your premises then they can be covered in the usual way but do not forget to tell us if any part (e.g. a flat over the shop) has been sublet or sold on a long lease to a third party.

Loss of profits is another standard feature and the purpose of this is to replace your income should you be unable to trade because of an insured peril occurring. In plain English, if you have a fire and you are insured for fire damage and as a result you are unable to open for business your insurers will pay you your lost gross profit (income less cost of purchases sold), thus allowing you to maintain your drawings, pay staff and the rent etc.. Remember that you will have to provide proof of your turnover and profits at the time of a claim. Unrecorded sales do not count.

Generally speaking the lower the premium the higher the level of security required by insurers. A burglar alarm fitted by a NACOSS (National Approval Council for Security Systems) installer with central station signalling by BT Redcare is always the preferred choice, even when it is not mandatory.

Make sure that you provide a correct sum insured for high theft risk stock such as spirits and tobacco. You will need to declare a separate sum insured for these because they will affect insurers view of what is adequate security in your case.

However, tell us what security you have and we will endeavour to work with you.