Business Insurance: Why the Cheapest Quote Isn't Always the Right Cover

When you're running a business, keeping costs under control matters. So when your insurance renewal comes around, it's completely understandable to look at the price first.

But after more than 14 years working in commercial insurance, one thing I've learned is that the cheapest insurance quote isn't always the cheapest option in the long run.

The real test of an insurance policy comes when you actually need to use it.

Small independent business representing business insurance in Eastbourne, East Sussex

Are you really comparing like for like?

It's easy to put two insurance quotes next to each other, look at the premiums and assume they're offering roughly the same thing.

Often, they're not.

There can be differences in cover, excesses, limits and exclusions. But just as importantly, has the insurer actually been told what your business does?

I regularly come across businesses where a simple description doesn't tell the whole story.

Take a property maintenance business. They might also undertake decorating, carpentry, minor plumbing and electrical work. Those are exactly the sorts of things I want properly declared to insurers when I'm arranging the policy.

I'd much rather have that conversation before a claim than during one.

The details that don't seem important can be the ones that matter

Business Interruption is a good example.

You might have Business Interruption included, but how long would it actually protect you for?

If a serious fire meant you couldn't trade from your premises, would 12 months genuinely be enough time to rebuild, replace equipment, deal with suppliers and get the business back to where it was before the loss?

For many businesses, it may not be.

That's why I regularly discuss whether a 24-month indemnity period would be more appropriate rather than simply accepting 12 months because that's what has always been on the policy.

The same applies to things like stock, tools, equipment, wage rolls, turnover and liability limits.

Your business changes. Your insurance needs to keep up with it.

Cheap insurance isn't bad insurance

I'm certainly not saying you should choose the most expensive quotation.

Part of my job as a broker is to approach insurers and get the best terms I can. If I can save a client money while still arranging the right cover, that's a great result.

But I won't remove cover I believe a client genuinely needs simply to make my quotation look cheaper.

For me, the right cover comes before the cheapest price.

The important bit happens after you've bought it

Buying business insurance can take a few minutes online.

But when something actually goes wrong, you don't want to discover that an important part of your business wasn't declared, a limit wasn't sufficient or the cover you thought you had isn't actually there.

That's one of the reasons I started Flintwise Insurance Brokers.

I want to understand the businesses I insure, explain the cover in plain English and be there to help when my clients actually need their insurance.

I'm based in Eastbourne, East Sussex, working with business owners locally and across the UK.

If your business insurance is coming up for renewal, or you're simply not sure whether your existing policy is covering you properly, feel free to get in touch.

For insurance that's wise, think Flintwise.