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A lost profit, or a loss of profits?

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One of the most complex parts of insurance cover is business interruption, so maybe a short explanation is in order?

For most business the cover will be based on “Gross Profit” and that is turnover, less the cost of raw materials with nothing else deducted, especially wages, as you will need to pay your staff.

For service businesses its “Gross Revenue”, which equals turnover and for landlords it can be loss of gross rental income.

The next thing to understand is that in 99.9999% of cases you cannot have a claim for business interruption, unless physical damage has occurred.

This has to be for one of the identified perils, such as Fire, Lightning, Explosion, Flood, or Storm!

There are a number of extensions, but these vary greatly between policies. In some cases the cover is as little as £25,000.

These extensions normally include the following:

  • Failure of public utilities.
  • Denial of Access – Physical Damage.
  • Damage at supplier’s premises – Can’t supply you with what you need.
  • Damage at customer’s premises – Stops buying from you.
  • Murder, death or suicide – Premises closed whilst police investigate.

In some cases, there are other extensions, but these vary greatly with very low sums insured.

If you really want to know, you have, talk to a professional and take the time to understand what cover you need, #becauseaccidentshappen to nice people all the time.

Feel free to message me or call the office on 029 20 470 375 for a free, no obligation consultation.

It could be the most valuable phone call you ever make 😎

 

Important numbers

Top Tips

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Here are 2 top tips to keep the cost down, when arranging your business insurances.

There are 3 numbers which are used to calculate the premium, they are:

  1. Physical sums insured
  2. Gross Profit
  3. Turnover
  4. Wages

Top Tip 1

Both (1) & (2) need to be accurate as these are values on which your claims will be based. If they are too low, your claims will be reduced by the amount of under insurance as a percentage %

They should be the replacement cost ITEMS or the cost to reinstate BUILDINGS.

Top Tip 2

Both (3) & (4) are simply used to calculate the premium once a year. They are not sums insured, so whilst they need to be reasonable, they should not be overstated. If they are, you are simply going to pay an increased premium based on something which hasn’t yet happened. Last years actual is a perfectly good number.

Brokers working on commission will want the higher figures, because they will earn more money.

Because we work on fixed fees, not commission, we will never ask you to overstate these numbers.

We want to keep your premium as low as possible, because we know that will make you happy.

Have a great day 😊

Design

Corporate Continuity – Part 4

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A solution designed for the specific business.

Once we have management buy in to business continuity objectives, have embedded the concept with staff and managers and have identified the key vulnerabilities, we go on to design the solution specific to the business.

The solution will of course depend on the nature of the organisation and the products and or services that it seeks to deliver. The solution designed for a manufacturing company, will differ dramatically from that of a home nation-based charity.

We will look at risk and threat assessments before we decide on the appropriate business continuity solutions. We will consider interdependencies within the business, especially where solutions may rely on suppliers and their supply chains.

We may look at existing arrangements and adjust them according to the “Minimum Business Continuity Objective”. Cost effectiveness will always be a consideration. Top management will of course need to sign off the appropriate solutions.

Solutions should be consolidated by resource type to ensure they are consistent across the organisation and do not conflict with other objectives.

Finally, we will establish the projects required to implement the solutions, so the organisation can #justkeepgoing.

When all is said and done designing the correct solutions is essential if the final plan is to be fir for purpose.

Have a great day

 

 

Cyber Risks

Cyber risks, are they real?

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Cyber risks are very real, but it’s a very old story. Criminals will take advantage of any situation if they think there is an angle where they can make money and if that means stealing yours, digitally or remotely they will. Its just another opportunity to them.

But what should you really be worried about!

Common threats include:

  • Hacking or disabling a website, particularly if its an E-Commerce site that generates income.
  • Ransome ware, that can disable your systems and prevent you running your business.
  • Damage or destruction of physical IT hardware and critical infrastructure.
  • The loss of personal data, especially if you hold payment details.
  • Social engineering including invoice fraud.
  • The cost of rectifying any of the above or the fines that might follow for failure to keep data safe.

The first thing in business, is to make sure you have the most robust IT security system it is possible to have, after all if you can stop the criminals at the door, they never get inside your systems or have the opportunity to wreak havoc or impersonate real people in the business.

Make sure you engage with a professional who understands the risks and can set up and importantly monitor all of your systems in real time. We use Supporting Role Ltd | IT Support Services (supporting-role.co.uk) and I can highly recommend their services.

Then you need to train your employees, most importantly so they are constantly aware of the evolving threats and the common scams that criminals use to get inside your business and your systems. If the email looks fishy just delete it, or at the very least question its validity with the apparent sender or a senior member of staff or even a director. Don’t feel foolish, you will get far more praise for potentially saving the business £1,000s.

Cyber Insurance can deal with the cost implications of some of the above, as well as helping with IT tools that can help secure your systems, but it is unlikely to pay the fines levied by government or other regulatory bodies, as this is seen to be against public policy. These fines can be significant and running to 10’s of thousands.

Cyber insurance is a good backstop to costs, but it won’t avert the serious disruption to your business that might follow a significant criminal cyber event, remember:

  1. Professional IT Security systems first.
  2. Staff training and awareness refreshed regularly.
  3. Cyber insurance to cover off potential costs.

If you want to know more about cyber risks, then call for a chat on 029 20 470375 or message me here.

Prevention is always better than cure.

Have a safe and thoughtful week 😊