Pub insurance - spreading the cost
Pubs, restaurants, nightclubs and takeaways are still feeling the after effects of the recession
. Whether we like it or not, most of us have less money to spend and given the recent austerity emergency budget, this is not going to change for a few years.
If you run a pub, you will be hit with a bit of a double whammy. Not only is your income reducing, you will find that some of your costs are slowly starting to creep up. One of these costs is your
pub insurance. No-one likes it when the costs of anything go up, but as far as business insurance is concerned, things have gone very well over the past 5 or 10 years. In real terms, since 2001, the average premiums, for a particular trade, have increased by around 5%. Spread this over ten years, and premiums have been increasing, year on year, by less than inflation.
Now though, even the insurers are starting to feel the pinch. Not only are there less businesses around, those that are left are choosing to either cut their cover down or even, in extreme circumstances, not even insure at all.
You know though, that your pub can be faced with any number of claims, whether for flood, fire, smashed windows or a range of different liability losses. You need to have the right insurance in place, all the time. Without it, your business could face financial ruin. Instead of considering reducing your cover or sums insured, there is an alternative option.
We have seen the adverts for years about using direct debit to spread the cost. But, as far as your insurance costs go, this has not always been a good option when interest rates of up to 10% have been charged to spread the cost over 10 months.
2010 has seen, not a sea change, but a small tide change, from the insurers. They realise that they have to pull out all the stops to get you as a customer. As a result, more and more are offering interest free instalments. They want you as a customer and they do realise that you will want the best possible payment option. So, you will be able to spread the cost, to save money, instead of having to reduce your cover.
Yes, your bank may charge you 20 or 30p for each direct debit that you pay, but it is worthwhile. Cash has been, is and will always remain King. The more cash you can keep in your business, the better. Rather than paying your annual 1,000 premium in one go, accept the few pounds it is going to cost to pay by direct debit, and take this option.
You will need to speak to your broker and ask them what the direct debit costs are. The best option is always to get some advice first, before you go ahead and make a rash decisions which could affect the business survival (ie not having insurance in place). You will also be faced with certain legal responsibilities, one of which is employers liability insurance. Without it, you not only face the prospect of having an EL claim against you (which can run into tens of thousands of pounds, even for a minor accident) you can get fined up to 2,500 per day that you do not have the cover.
Pub insurance - spreading the cost
By: Jack Brown
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