Workshop contents insurance

leveller2911

Hi all, I'm looking for some advice re workshop contents insurance.I have a small Joinery workshop which I share with a good friend.We both run our own businesses and both registered for vat.We share all costs (rent,electric,rates etc) and own most of the machinery 50-50 but also own some machines individually.

As mentioned we run separately and join forces on larger contracts.The problem we are facing and have done for years is finding companies who will quote for contents insurance.Currently we have only found 1 company "Towergate Insurance Brokers" who will insure us.

Neither of us have ever made a claim but it seems the sticking point is that there isn't a brick wall separating our work benches, seriously thats the reason given.So currently we both insure with TI seperately for roughly 50% of everything so I really can't see any reasosns why other companies just aren't interested.

Lastly why is commercial insurance so much more expensive than house contents?.Currently I am paying around £1,000-00 a year for £30k worth of cover for the workshop but £50k worth of house contents cost £145-00 a year. The workshop has CCTV and will soon have a security guard ,at home no CCTV just an over friendly Border Terrier Security guard.


We have tried NFU,too many brokers to mention and some commercial insurers.Never made a claim in 18yrs and getting a annoyed.

Many thanks in advance....
Leveller

dacouch

The way to cover the two businesses is via a broker as Towergate are acting. The best way is for both of you to be covered by the same Insurer, the reason for this is if there were separate Insurers they would argue as to whose liable if there was a claim. There will not be many Insurers willing to cover you on this basis which is partly the reason for the expensive premium.

The other reason is joinery is a high risk for an Insurer due to the increased fire risk, fire scares Insurers especially when there's plenty of combustable material such as wood and sawdust.

I assume you have some kind of Public Liability and possibly Employers Liability. Joinery is high risk for an Insurer from a liability aspect due to the powered tools and lathes and possibly also due to the saw dust.

Have you tried "Commercial" Insurance brokers in your local area for quotes, don't bother with normal insurance brokers and avoid Swintons although £1k premium for the cover you have got is not that bad.

leveller2911

Thanks for the reply Dacouch, we both have Public Liability , no employers liability as there is only the 2 of us.Fire hazard I guess I understand ,although we are very careful (colleague is a Retained Firefighter) and I'm sure there are far more combustable products in the home.

We are covered by the same insurers (Allianz,DAS Legal and Brit Insurance).We have tried a few Commercial Brokers but its always rejected by underwriters.

As a layman I still don't understand why house contents is a fraction of the cost, far more chance of my home being burgled or catch fire than my workshop..Guess I will have to bite the bullet and pay again.

It does annoy me in that I have asked for someone to come to the workshop and check that we are complying with the details of the insurance. Having paid them close on £15,000(£30k between us) you would hope they would send a rep out but I suppose the cynic in me would say they need a "get out" clause if we ever made a claim.They are only 35 miles away.

Many Thanks Dacouch.......

dacouch

They tend to be triggers for an Insurer to send out a surveyor eg the size of the premium and / or the amount of contents at risk to the Insurer. I guess our amount of contents does not alarm the Insurers sufficiently for them to send a surveyor and your premium is too small for them to really warrant it.

If they sent a surveyor out it's unlikely to reduce your premium, they would be likely to come up with a list of improvements that they would require you to carry out within a set period along with recommendations which you would probably complain about the cost of implementing them so I would not push them for a surveyor to come out.

With regard to them refusing to pay out you need to ensure you abide by the policy and especially any extra terms they have applied. If you're not sure about anything ring Towergate and ask them to clarify

House premiums are lower as there are more companies competing for the business (Because of your set up you have a very limited market) and house fires would not normally result in a total loss. A fire in a joinery would normally result in a total loss due to the combustable materials you have there.

Does your policy include Business Interruption ? This is probably more important than the actual contents cover because if you have say a fire. The Insurers will pay your claim possibly after 6 weeks or so or more likely later. During this period you probably would not be able to trade and there's a good chance you will go bankrupt. BI Cover provides cover for your loss of Gross or Net Profits with interim payments which should ensure you do not end up out of pocket.

I strongly recommend you check to see if you have BI cover and if not add it, the cost may be a few hundred pounds but if you ever have a large claim you will thank yourself for taking it.

leveller2911

I don't currently have BI cover and if its a few hundred pounds a year I really can't afford it, only a one man band,lol.

I will look into it though. Cheers

vaio

Get a broker to have a look at the RSA combined business policy for you, seems to be tailored to a greater extent than normal policies in that we can pick & choose what cover we want so maybe flexible enough to do what you want.

We have one and it covers everything mentioned above. Cost is just over £3k but we have 4 employees, workshop, tools, site work, product & public liability etc etc.

Having said all that it might well be the sharing that is the problem, someone I know has a holding company which owns the building & machines and rents workshop capacity to the trading company. This also isolates the building and machines in case the trading company becomes insolvent. Suppose it depends on the scale of your operation

dacouch

leveller2911 wrote: »

I don't currently have BI cover and if its a few hundred pounds a year I really can't afford it, only a one man band,lol.

I will look into it though. Cheers

At the very least ask for a quote as it may be considerably less.

Imagine if there was say a flood or fire at your premises, you may not be able to access it for many months and possibly all or some of your tools would be written off. Could you support yourself for months possibly as much as a year while the workshop is rebuilt or you find alternative premises.

Getting your tools replaced would be the least of your worries, BI would cover your lost Gross or net profit and would even cover your losses if you lost a contract due to not being able to trade.

People often economise and don't take BI cover and just cover tools. If you have a major claim which is after all what you've decided to cover your tools for you will either thank your lucky stars you took out BI or rue that you did not. Something like 40% of businesses do not reopen after a major disaster.

dacouch

vaio wrote: »

Get a broker to have a look at the RSA combined business policy for you, seems to be tailored to a greater extent than normal policies in that we can pick & choose what cover we want so maybe flexible enough to do what you want.

We have one and it covers everything mentioned above. Cost is just over £3k but we have 4 employees, workshop, tools, site work, product & public liability etc etc.

Having said all that it might well be the sharing that is the problem, someone I know has a holding company which owns the building & machines and rents workshop capacity to the trading company. This also isolates the building and machines in case the trading company becomes insolvent. Suppose it depends on the scale of your operation

I would be very surprised if RSA took two entirely separate companies on in the same premises with no separation. The holding companies you describe is different in an Insurers view than the OP's situation.

It's worth trying RSA but if they did offer cover it would be through a very large broker such as Towergate or someone with a scheme for Joinery firms.