Some Insurance Terms

Premium

The cost of insurance is known as a premium and is calculated by insurers taking into account their keenness to insure your type of business, level of risk, claims history and your approach to risk management. Many insurers feel that pubs with children’s play areas, those running entertainment or located in certain postcodes, are of a higher level of risk and will charge higher premiums for these type of pubs as a result.

Some insurers allow you to spread the cost of your insurance over 12 months by allowing you to pay by direct debit. This can help your cash-flow though you may end up paying more for this option.

Premiums can vary widely between insurers but it is important to check the extent of your insurance cover. A lower premium may mean that cover is not as comprehensive or that you are required to pay a higher excess figure.

Excess

Excess is the first part of any claim that you are responsible for paying yourself. For example, ‘a policy excess of £ 250’ means that for a claim of £ 1,000, you would be paid £ 750 (if a successful claim were made) as you are responsible for the first £ 250 of the claim. This also prevents insurers having to pay out on small claims.

All Risks

Policies with ‘all risk’ cover provide more cover than given under a normal insurance policy. ‘All risk’ covers any loss or damage apart from exclusions stated in the policy. Such policies may attract a higher premium.

Under Insured

Being under insured is where you do not adequately cover items to their full value. An example of this would be only insuring your fixtures and fittings and equipment at £ 15,000, when the true cost of replacing these as new would be £ 45,000. If you claim to replace all these, your insurer will limit the claim to a maximum of £ 15,000. For smaller claims, for example to replace part of your fixtures and fittings, a claim may be reduced pro-rata in line with how much you are under insured.

Inspection Prior To Cover

An insurer may instruct their representative to inspect your pub prior to arranging cover. Their purpose is to inspect the premises in order to assess risk. It is best to organise your insurance cover in good time to take account of this eventuality.

Conditions And Exclusions

Insurers may place certain conditions on covering you. They are likely to insist on working burglar alarms and fire alarms. They may ask you to upgrade door and window locks or add extra sensors throughout the pub. You may have to confirm that fabrics are fire retardant and internal doors are up to the required fire resistant standard. In a small number of cases, they may require CCTV to be installed. They may also exclude cover for certain things. It is important to understand any conditions or exclusions that may apply to a policy and attend promptly to any issues that have been raised by your insurers.