Commercial Insurance Brokers: directory of firms

If you employ anyone, you generally need employers' liability insurance from an authorised insurer covering you for at least 5 million pounds. The fine for not being properly insured is 2,500 pounds for every day you are not.

You must also display the certificate where employees can see it, which can be at the workplace, on your website or on an intranet, and show it to inspectors on request. Failing to do that can bring a fine of 1,000 pounds.

There are narrow exemptions. Cover is not required where the only people working for you are family members, including a spouse, parent, grandparent, child, sibling or step-relation, or where they are employed outside England, Scotland and Wales. Treat those exemptions carefully: taking on one person outside the family brings the obligation into force immediately.

Before a non-consumer contract is entered into, the insured must make a fair presentation of the risk: disclosing every material circumstance it knows or ought to know, presented in a manner reasonably clear and accessible to a prudent insurer, with representations of fact substantially correct and representations of expectation or belief made in good faith.

Knowledge is not limited to the person filling in the form. It extends to what senior management and those arranging the insurance know or ought to know after a reasonable search of information available within the business. That is why a broker will ask to speak to operations and health and safety, not only to the finance director.

The remedies for a breach turn on whether it was deliberate or reckless and on what the insurer would have done had it known the full picture. Disclosing more than seems necessary costs nothing; disclosing too little costs the claim.

Business interruption cover is where commercial policies most often fail to respond properly, and the cause is nearly always the figures rather than the wording. The indemnity period is the maximum time the policy will pay for, and it must run from the date of the damage until the business is trading as it would have been, not until the building is repaired.

For a manufacturer with long lead times on replacement machinery, or a business needing planning consent to rebuild, a short indemnity period is a decision to be underinsured. Gross profit for insurance is defined by the policy and is not the accounting figure, so it should be calculated with your accountant and your broker together.

Extensions matter too: damage at a key supplier's or customer's premises, loss of access because a neighbouring building is cordoned off, and failure of public utilities are all separate grants of cover that have to be bought.

A packaged policy for a recognised trade is quick and usually cheap, and works where the business really does look like the model behind it. It breaks down when a trade has an unusual element, such as hot work, work at height, exports to certain markets, or a single contract far larger than the rest.

Schemes negotiated by brokers with an insurer for a particular trade sit in the middle: broader than an off-the-shelf package, narrower than a bespoke placement. Open-market placement, where the broker presents the risk to several insurers and negotiates wording, is what larger or unusual risks need.

The disclosure rules apply whichever route is used. A broker must tell you whether it is giving a personal recommendation on the basis of a fair and personal analysis, whether it is obliged to place business with named insurers, or whether it is only providing information.

FSCS protection for business insurance depends on the type. Employers' liability is compulsory insurance and is protected at 100 per cent for failures after 8 October 2020, as is professional indemnity. Public liability and most property and package covers are general insurance protected at 90 per cent.

For complaints rather than failures, smaller businesses can use the Financial Ombudsman Service. From 1 April 2019 the tests are a micro-enterprise with fewer than ten employees and turnover or balance sheet not over two million euros, or a small business with annual turnover under 6.5 million pounds and either a balance sheet under five million pounds or fewer than fifty employees. Charities with income under 6.5 million pounds and trusts with net assets under five million pounds also qualify.