cowens commercial insurance - five things that could be wrong with your insurance

INSURANCE …THE FIVEESSENTIALS

Correct InsuredWhilst this may seem obvious, you should ensure that the entity insured is the same as that which owns the asset in

question or is capable of incurring a liability. A simple matter such as VAT registration and ownership of a property can

have a major impact on a claim.

Adequacy of Sum InsuredMaterial Damage policies issued in the UK have an 'Average Clause'. This means that you will take your own risk for the

proportion of any underinsurance. If you insure your plant and machinery for a Reinstatement Sum Insured of £1,000,000

and at a point of loss it turns out that it should have been £1,500,000 you will receive only two thirds of your claim.

Policy Warranties and ConditionsThe vast majority of insurance policies include warranties and conditions. As you will appreciate compliance is vital if the

insurance policy is to operate correctly and it is therefore essential that you understand the warranties that are written

into the policy and that you are capable of compliance.

Business Interruption - Indemnity PeriodApproximately 67% of businesses that suffer a major loss fail commercially within two years of that loss. The indemnity

period should be long enough for the Insured to return to the same trading position as they were in before the loss, not just

back up and running. Experience tells us that most businesses in the SME and mid-market sector will carry 12 months

indemnity and for a significant proportion of these, it will be inadequate for their business to survive a major loss.

insuring your future today ... ensuring your future tomorrow

Business DescriptionThis is fundamental to the operation of an insurance programme, however, the devil is in the detail. You will only be

insured for the Business Description stated on the face of the insurance policy. It is therefore crucially important that the

business description is both accurate and complete.

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