What’s in a business pack?
- Published: October 28, 2019
One of the most common insurance solutions for small businesses is known as business pack insurance, which provides a suite of different insurance policies for entities that take out this type of cover.
These policies typically include cover for building and contents, general property, theft of contents and stock, public and products liability, machinery breakdown and business interruption. By bundling a range of difference insurances in a pack, many risks can be covered in a single policy. Policy holders may also be able to access more affordable premiums than if the policies were taken out individually. It’s important to talk to an insurance broker to find out what could be included in the policy to ensure it covers the typical risks faced by businesses in your industry.
Policies do tend to vary, depending on the industry in which the business operates. It’s also possible to add or subtract different elements from this type of insurance, depending on what’s important to the policy holder and their risk appetite. For instance, cover for machinery breakdown may not be applicable for a retail store. Whereas, it may be essential for a manufacturer that may be exposed to the risk of a power surge causing machinery to break down, resulting in a loss to the business.
Business pack policies generally won’t include insurance to cover vehicles as well as damage to property as a result of general wear and tear or gradual deterioration. The cost of routine maintenance, deliberate acts of terror are also outside the scope of this type of insurance and events covered by a business pack policy need to be unforeseen.
Let’s take a look at a typical claim under a business pack policy. In this case, a fire ravaged a bakery, destroying its ovens. The contents section of the policy may cover the replacement of the ovens or baking equipment. The business may not be able to earn an income until it was able to replace the ovens and other equipment. So business interruption insurance may cover the additional cost of setting up the bakery in a temporary location with hired equipment and may also cover lost business expenses and gross profit while the bakery was unable to operate.
It’s worth noting the market for business pack insurance has tightened recently, thanks to a high level of claims across all insurance lines. This means the cost of premiums are rising and are expected to continue to do so until the market settles and insurers expand back into the policy areas that are currently causing losses.
The information contained herein is of a general nature only and is not intended to be relied upon nor is it a substitute for appropriate professional advice. Whilst all care has been taken in the preparation of the material, it is not guaranteed to be accurate. Individual circumstances are different and as such require specific examination. Asparq cannot accept liability for any loss or damage of any kind arising out of the use of or reliance upon all or any part of this material. Additional information may be made available upon request.