RENEWING BUSINESS INSURANCE FOR SMES

Now is a good time for small businesses across South Yorkshire to prepare for renewing their business insurance, according to Alister Smith a director at IFM Insurance Brokers in Sheffield.

Over recent years many firms have changed and adapted their business model to cope with new ways of working and dealing with customers. Many firms have moved to online delivery, working from home and in some cases, are using existing equipment to manufacture new products.

Rising inflation has also increased the cost of goods and materials which could mean a business is underinsured when making a claim. For example, construction and building material costs remain high, although annual house building cost inflation slowed slightly at the end of last year to 12.8%, as the latest quarter- on-quarter rise fell to 1.7%. The annual rate of increase, as measured by the BCIS Private Housing Construction Cost Index, now looks to have peaked at 15.3% in the second quarter of 2022.

It is therefore important that insurance policies provide the right protection, especially if a business has made changes to the way it operates and to combat rising inflation.

Preparing for renewal in advance is particularly important when the insurance market enters a ‘hard’ cycle, as it is now. This is when insurance premium rates begin to increase, underwriting standards tighten and some insurers reduce their coverage capacity.

There are three simple steps for local SMEs to take when renewing their business insurance.

1. Make sure you allow plenty of time before renewing your insurance and don’t leave it to the last minute.

2. Provide as much information as you can to help the insurer understand your business and it’s exposure. Your broker can help you present this information in the most comprehensive manner.

3 Allow your broker to navigate the insurance market to provide the best possible coverage based on your risk profile and circumstances.

In these challenging economic times, a broker’s duty and value is to remind business owners of the consequences of underinsurance and more importantly how they can take the right actions in a cost effective and efficient manner. What’s more, if a business does need to reduce its insurance cover to save money, its vital to engage with a broker well before the next insurance renewal to discuss which elements of cover can be reduced, and which elements must remain for their ongoing protection.

Many local firms are looking to better understand the risks their business faces, and to ensure they are getting the right bespoke cover rather than a package of unsatisfactory covers, which may not be effective in managing the risk or saving money. Therefore, it is vitally important to prepare for insurance renewals early, as it could deliver significant benefits, both in terms of cost and level of coverage.