How many brokers to approach? What to include in your policy? Who to choose? Leon Bosch explains all.
GALLAGHER Automotive Team has been protecting a full spectrum of motor trade businesses across the country – from small family firms and independents up to the largest franchisees – for over 30 years.
Our nationwide team of specialist brokers places over £33 million of premiums annually with a wide range of specialist motor trade underwriters. If your business is looking to arrange automotive cover, the Automotive Team recommend the following:
1. Hire a broker
Deal with brokers who know the industry as they are more likely to understand the issues affecting your business and the level of cover you need. They can then negotiate with providers to get you a competitive deal, but one that still leaves your business protected.
2. Start your renewal process in good time
In order for an insurance broker to do the best job possible, it’s important to give them adequate time to analyse your risk, market your risk to the insurers, compare the various quotes received and report back with an appropriate available option.
3. Don’t focus solely on the premium
The most important thing is to safeguard your business and make sure you are adequately covered. We have seen garages remove key coverages in order to reduce premium, which has left them short following a claim which would have been covered had they not removed it from the policy to reduce the premium.
4. Protect yourself and your business
A standard motor trade policy won’t cover everything, which is why you need a reputable policy with a good insurer. Their policy should include road risks, material damage/business interruption and public/employer’s liability as a starter for 10, but there are many other areas which may pose a risk for you and your business, for example management liability, cyber issues and crime. You should use a broker that goes beyond covering your basic risks and advises you on other areas and potential gaps in cover.
5. Read the small print
It is important to get the right cover in place, but has your broker made you aware of the exclusions, subjectivities, warranties and policy excesses applicable? These should all be confirmed to you prior to taking out the policy. Ask yourself: do you know what your policy excess is for each section? Do you have a co-insurance clause on your policy? If you are not aware of these, then in the event of a claim, you could receive a settlement much lower than you were expecting.
6. The condition of average
Not everyone is aware that insurance policies may include an ‘average’ clause. This clause means that if you are underinsured, your insurance company could reduce any claim in proportion with the gap. For example, if you had £100,000 of machinery and plant cover, but should have had £250,000, then after the application of ‘average’ a £20,000 claim could be reduced to £8,000.
7. Don’t use too many brokers
You may believe that by using multiple brokers you are certain to come up with the best premium, however this can have the opposite effect. There are a limited amount of reputable motor trade insurers, and some of them may simply ‘no quote’ if they see a quote request for the same business from more than two brokers, which means you’ll receive no quote instead of a potentially great quote.
We would suggest you consider using your holding broker and no more than one other to obtain alternative quotes. Any more than that and you could simply block the market.
• To learn more about the Automotive practice, and how it could help you and your business, contact the Automotive team on 01582 542 330 or [email protected]