The Business Efficient Annual Diet keeps you fully covered
A word from Robert Marshall
Thank you for taking the time to visit this post, I would like to give you my thoughts on (BEAD) Business Efficiency Annual Diet and the recent High Court judgment ruling that potentially will affect thousands of business.
As with so much in today’s world the notion that the internet makes things happen faster is limited to thing’s we don’t do a lot of unless you are on social media all day.
Everything that does seem to matter takes forever, as internal structures are stuck in a time warp or business managers believe you can’t reinvent the wheel, so stay with what’s tried and tested.
Talking about insurance crosses so many barriers from total boredom to antiquated approaches of securing the best price by not having access to all markets, being required to keep to the way it’s done and not upset the apple cart because you will hit a brick wall.
With that in mind all the insure-tech and hyped up alternatives still have to follow the same approach to risk.
It doesn’t matter what we talk about, there is risk attached to everything and there always will be. There is very little that insurance companies don’t have statistics on insofar as underlying worth.
A house is not valued on its market price but its re-build cost, clothes on replacement value from the Insurers designated supplier, and rings at the Insurers jeweller not yours.
Business Efficiency Annual Diet
For business related insurance, somehow there is a perception that only the business to be insured knows best and insures can go whistle. In some cases that maybe true but rarely will insures concede to that and most will have an answer which is in effect “he who pays the piper calls the tune”.
But whilst you pay the premium, the insurer pays out and so they become the piper!
For business insurance, wanting to downgrade the value of stock and machinery but up the value of the buildings cover looks good but it’s just a waste of time. Buildings are only valued on a rebuild cost basis and stock has to be in relation to turnover.
So, pretending its lower than it should be will come back and kick you where it hurts most.
If the Broker questions you, it’s not to get smart, but to protect you simply because if you don’t supply meaningful and true information at inception, in the event of a claim the Insurer reserves the right not to pay a penny and you can forget anything on a pro-rata basis. If you under insure they will take your money and walk away when a claim comes in, as its all in the exclusions of the policy which I bet you have never read.
Also remember that Insurance online has the same protection for Insurers and under insuring gets a big fat zero. Please don’t think Insurers won’t talk and cross reference risk, because they all do as no one wants to be bitten twice.
It may sound harsh but see under insurance as fraud. It’s really costing YOU not the Insurer as you end up cutting off your nose to spite your face or in this instance your business.
So, when you value everything and it ends up costing you more than you wanted to pay. For sure, check the market, but look at how you are running the business. Do an inventory of what you can legitimately economise on, be it things you thought you needed but in reality don’t and dare I say look at staff numbers.
That’s why the Business Efficiency Annual Diet (BEAD) is a necessary event, just like a wardrobe clear out at home the BEAD will be saving on next years expenses and allow you to stop under insuring for good.
As with the wardrobe clear out, there is a certain peace of mind when you have done it and a small shot at how ruthless you can be and most of all it will pay dividends for the business.
Being properly covered looks like a wasteful pain but I promise you it’s not simply because it alerts you to overall costs which can be shocking. If you are prepared to be honest with yourself it will be enlightening and actually end up making you more efficient.
High Court Judgment
Finally, on the Business Insurance fiasco, the decision that came out from the High Court, resulted in Insurers for the majority of cases having to pay up. Some have accepted and will do so where they haven’t.
Others look set to appeal and that may drag out their respective cases until next spring. Certainly, those who reduced pay outs because companies took Government Furlough money have been told to make good in full.
The downside will be that all polices will now be looked at with a microscope more than ever, and we can expect tightening of words and the occasionally sneaked in new exemptions so Insures get their money back.
You don’t win with Insurance, it is a bogeyman cost, but it also can be the catalyst that makes your business address expenses which can be removed and sometimes surprisingly more profitable.
Stay safe and please be careful out there.
Robert D Marshall
Direct line: 020 8911 1405