Can I save money on my business stock insurance during lockdown?
Business Stock Insurance (and goods)
Have you, or are thinking of, moving your stock to more secure locations during this lock-down?
This could well be a good idea for some businesses – say a high street fashion shop or a workshop that is remote and unattended.
Here are three things to think about – and if this could result in a saving on insurance premium?
First, a question.
Are you fully insured?
When you renewed your insurance you made a declaration on your stock value. This will be shown in the Statement of Facts sent with your Policy Wording and Policy Schedule.
Insurers understand that stock values rise and fall during the year, but it is important that you are not under-insured. If you under-declared, you may well suffer a further reduction in the loss amount you can recover in a claim.
Two tips on stock:
- Go over your stock values regularly and while there may be a small change in premium, only a significant upward change in value would concern your insurer who may just note it for renewal. You will however have protected yourself by having the conversation.
- If, of course, you have too much business stock insurance because you haven’t been supplied and lockdown is going to prevent you holding normal stock levels then you should ask for a revision of the premium!
Is there a new or better place to hold your stock during lock-down?
Professional warehouses and storage often have better security than your premises. Relocation of your stock could make a difference to your insurance costs!
How much difference is tricky to calculate because:
- Many small businesses buy “packaged insurance” and it may not be clear what the stock protection element of your premium costs. So ask.
- How much do your specific security measures (or adding them) impact the premium and what you could do to save overall.
It would be worth while discussing with your broker/insurer if ‘your’ new secure site has security measures which are:
- significantly better,
- is permanently manned (your house possibly but remember there are insurance issues with stock at home and your residential insurance),
- the storage location is a much safer postcode.
Two tips on storage
Check the insurance that the warehouse offers or your home cover. Sometimes lower limits might apply – any savings may then be a false economy.
- Your stock cover is set down in the policy Schedule and should match or be higher than the declared value in the Statement of Facts. This means you will have enough protection in case of a loss.
- Check that your insurers will cover your stock if it is no longer at your premises. If you are taking some stock or business equipment and storing it at home, it may not be covered. Speak to your Home insurers.
How will the transportation of the stock be insured?
Hauliers often offer a good price because they do not, or only barely, offer insurance for the goods they carry.
Your small business insurance will often include or ‘add-in’ Goods in Transit (GIT) cover so check your business stock insurance cover in the Schedule. Subject to the terms your policy may cover your stock PROVIDED you use your own vehicles (not the hauliers).
Transport stock needs ‘Cargo insurance’ – this is easily obtained but can appear expensive for a short period of cover.
Speak to your broker or your insurer explain what you are doing and why. As you are trying to improve the security of the risk the insurer might be willing to give an extension of GIT for this operation to move your stock away from the premises and if you use hauliers instead of your own vehicles.
Like us, you’ve probably got some time on your hands. Review your business insurance and to see if you can save a few pounds or get the right cover!
So, if appropriate:
- Talk to your broker or insurer directly and ask for a mid-term adjustment or new quote if your risk has changed. If a substantial part of the insured period remains, 3 months of lockdown or reduced/changed activity could make a significant difference to your premium.
- Check your insurance to see if you can reduce your premiums on premises.
- Look at the security and location of your stock and see if you are over-insured for the amounts you require.
- After all of these measures, if it makes sense to cancel the insurance then check your policy to see what rights to return premium you have.
Always be ready to have a constructive conversation with your insurer. Tell them about your circumstances and what you should pay or help you may need. Read our blog about getting the best personal and business quotes.
While it is not easy to forget the vital work going on by many people during this lockdown, we must also remember the importance of micro-businesses to our economy. If you’ve read this, you may be thinking about not returning to self-employment after lockdown – just remember, when it is time to, let’s all get back to 100%!