Commercial FAQs

Q1. Why do I need business interruption cover?
Q2. I have got Public liability insurance, why do I need professional indemnity?
Q3. My policy says my limit of indemnity is £2M aggregate - what does that mean?
Q4. How do I calculate the sum insured on my buildings?
Q5. Why are UK insurers afraid of providing liability coverage for Products supplied to the
       North American market by UK companies?
Q6. I reduce the limit of indemnity from 10m will my premium be reduced accordingly
Q7. Why do I need Directors and Officers insurance?
Q8. Why opt for a fleet insurance as opposed to insuring vehicles individually ?


Q1. - Why do I need business interruption cover?

A - Clients focus on protecting their assets however, what about the income and anticipated profit for the period that your business is not operational following an insured loss? Who's going to continue paying the salaries of your valuable staff?

Business Interruption cover ensures that the company is able to continue paying its way and make a profit until it returns to the position it was in prior to the loss.

Q2. - I have got Public liability insurance, why do I need professional indemnity?

A - Because Public Liability does not cover mistakes or errors in providing advice, design or specification. As organisations, we all have a duty of care to the people we provide services to. If we breach that duty we will be sued for financial losses and/or damages.

Q3. - My policy says my limit of indemnity is £2M aggregate - what does that mean?

A - You have a limit of indemnity of "Aggregate" or "Any one claim". Aggregate means this is a pot of money used throughout the year to meet any and all claims that come in. As each claim comes in the limit reduces by the amount of the claim.

"Any one claim" means that you have a limit of indemnity for each and every claim that arises during the period of insurance.

Q4. - How do I calculate the sum insured on my buildings ?

A - By obtaining a Surveyor's valuation of rebuild cost or by using the rate supplied by the Building Cost Information Service. The sum insured should represent the rebuild cost and not market value.

Q5. - Why are UK insurers afraid of providing liability coverage for Products supplied to the North American market by UK companies?

A - Lawsuits made against your company by domiciles of the USA/Canada for bodily injury or property damage potentially caused by your products will be pursued under US/Canadian jurisdiction rather than in the UK even if you have no local presence over there. Their Civil Liability System is plagued by frivolous lawsuits, which seem to be part and parcel of their culture, the awarding of excessive punitive damages and exorbitant legal defense costs.

Q6. - I reduce the limit of indemnity from £10m will my premium be reduced accordingly?

A - You are legally required to effect £5M limit however, most Insurers provide £10M as a minimum and will therefore not provide a reduction in premium for reducing.

Q7. - Why do I need Directors and Officers insurance ?

A - To personally protect against claims brought against directors, officers and senior employees for breach of duty, neglect, misstatements, errors or omissions.

Q8. - Why opt for a fleet insurance as opposed to insuring vehicles individually ?

A - Open driving is available on all vehicles rather than perhaps named drivers being restricted to some vehicles. Temporary vehicles can be included without a fuss.

All vehicles have full business use by all drivers, not restricted use by some.

It is often possible to make a saving in premium by combining the different vehicles, but a definite advantage is the time saving of dealing with one renewal rather than throughout the year.