Back to Basics: Insurance for pubs
While publicans are tightening their belts and looking for ways to reduce overheads it's important to spend a little time checking that your business insurance policy delivers value for money.
Business insurance is seen as a necessary pain. You know you should have it but may not have considered the actual risks your business faces - that is until the time comes when you need to make a claim and you realise you don't have the adequate cover.
With an array of insurance providers to choose from and policies varying between companies, there has never been a better time for publicans to dust down their policy, take a closer look at its detail and shop around for a better deal.Your insurance needs can change over time
If the same policy has been in place for a few years it is likely it no longer provides adequate cover. You need to check cover limits for each element of the policy. Don't be afraid to extend them where necessary - be realistic.
One key area is business contents, which covers trade contents and stock in the event of an incident such as a fire, malicious damage or theft. Consider whether the value of the stock has increased since the business started or whether the premises has been expanded and now contains more furniture. Check what the standard cover includes
Make sure it has what you need. While some policies have cover such as employer's liability because it is a legal requirement, others may offer further protection as standard which are just as valuable to a publican.
For example, loss of liquor licence covers against any depreciation in the value of the premises and loss of profits if you lose your licence because of circumstances beyond your control.
There may also be extras that can help in the smooth running of the business that can prove invaluable. For example, these could be automatic extensions of cover for damage to fixed glass and sanitary fittings, loss of money and personal accident and assault. Some insurance providers automatically increase cover for seasonal fluctuations such as summer and Christmas when the pub industry's profits and customer footfall increases.
Public and products liability protects your business in the event of customers being injured or their property damaged, or for damage or injury caused by defects in your products.
Cover for business interruption may sound unnecessary but don't take a risk in the hope that it will never happen. Seven out of 10 small firms would go out of business if they experienced a major emergency, with more than two-thirds having no contingency plans to deal with it.
Finding a policy that covers these situations as standard can provide peace of mind. Check out optional extras
While some insurers include what may be seem unnecessary extras in the standard policy, others allow you to choose exactly what cover you require and charge accordingly.
One instance is commercial legal protection that protects against legal defence, property protection, employment disputes, compensation awards, tax investigation and VAT disputes which. according to the Federation of Small Businesses, are on the rise.
If you own your pub you can choose to take out buildings cover, which will compensate for the cost of rebuilding the premises in the event of a disaster. If you live on the premises you could include household contents cover to protect personal items in a similar way to home insurance.Take the correct security precautions
Most insurers will state a minimum level of security. This could involve having a certain type of alarm and specific locks on external doors, installing CCTV and metal gates across entrances and fitting smoke detectors. Failure to comply can invalidate the policy. n
Chris Little is chief executive of insurance firm Premierline Direct. Go to www.premierlinedirect.co.uk or call 0800 107 9373 for more advice
