Prepared for anything
January 2, 2023
Running a business means knowing your risks and planning ahead to avoid negative impacts. But with spiralling inflation having knock-on effects across every part of the business spectrum, it can be hard to keep up with the danger zones. Here, Glenn Cue, director of Chartered independent insurance broker Todd & Cue, tells North East Times Magazine why insurance is one area where businesses cannot afford to fail to prepare.
Proper preparation and planning prevents poor performance.
That old adage may have its roots in the military, but it’s never been more important for firms operating in the metaphorical minefields that make up today’s business landscape.
Inflation, workforce shortages and global delays in supply chains are all having an impact on companies in every industry, whether across their day-to-day operations, or in planning for the future.
The six Ps are particularly relevant when it comes to making sure a business has the right insurance cover, avoiding the risk of being underinsured and penalised in the event of a claim.
And, as Glenn Cue, director of Team Valley-based Chartered independent insurance broker Todd & Cue, says, no stone can be left unturned when it comes to making sure your business is prepared and protected.
He says: “Everyone is all too aware of inflation, everything is costing more, whether that’s buildings, materials, labour or the price of the stock a business might hold.
“So it is imperative to make sure a business has insurance cover that will counter those rises.
“It’s never been more important to insure on the correct basis.”
Glenn is armed with stats that make for sober reading.
According to industry experts, within the last four months to December 2022, some 83 per cent of UK properties – both commercial and residential – were underinsured.
In the commercial property sector alone, it is estimated the figure equates to £375 billion of underinsurance.
Glenn says: “Unfortunately, some will take the view that if they underinsure for a certain amount, it means they’ll pay less for their premium.
“But that is short-sighted, and it’s what we work to avoid for our clients – we make sure they are insured for the correct amount.”
Index linked policies, where the insurer allows for the effects of inflation in the event of a claim, are the most straightforward way to avoid being underinsured due to spiralling costs.
But again, as Glenn warns, preparation is key.
He says: “Generally, a client knows their business inside out – they know what things will cost to replace, and how long they might have to wait for a key piece of plant.
“But the important thing with index linked policies is to start them from the right valuation position.
“At Todd & Cue, we encourage clients to get regular assessments of value – buildings should be surveyed, and contractors should look at their plant and lead-up time for replacement, for example.
“If a firm makes a claim and the insurer sends out an adjuster, the starting valuations that the insurance cover is based on need to be correct to ensure the policy compensates the insured properly.”
Shortages and delays across the supply chain are also adding to firms’ inflationary woes.
The North East is facing an acute shortage of new vehicles, with a computer chip supply issue impacting manufacturers.
The knock-on effect is that prices for used vehicles are spiralling and choice is squeezed – an example of the lateral thinking a business needs to employ when considering its insurance cover.
Glenn also stresses the importance of business interruption cover, which again must take into account the specific factors facing the sector a client operates in.
He says: “Business interruption cover typically comes with an indemnity period of 12 months, but we are advising our clients to extend longer, even up to 36 months, such are the issues in replacing plant and stock and, most importantly, getting the business back to pre-loss position.
“As a broker, through our client discussions, we seek to understand these and other issues to ensure all covers bought are adequate.”
There has never been a more important time for business owners to take a pragmatic approach to insurance cover, and to speak to an expert who will help them work out exactly what they need to ensure their business is protected.
Glenn adds: “Year-on-year, clients come in and say, ‘no changes, keep our cover at the same level as last year’.
“But there must be changes; everything changes when inflation rises.
“That’s where we prove our worth to clients, and make sure they are fully prepared for the worst case scenario.”
A national reputation
For more than 40 years, Todd & Cue has been a market specialist in providing insurance cover for the licensed trade.
The company works with thousands of pubs and restaurants across the North East and the wider UK to offer tailored policies with competitive premiums.
In a niche market, Todd & Cue has built a reputation for supporting clients through the highs and lows.
With generous limits and enhanced policies, the company has seen its retention rate for clients at almost pre-pandemic levels.
Glenn says: “We’ve been in this sector for a long time, it’s not one you can just dip your toe in.
“We’ve built a reputation nationally for being competitive and flexible with clients.
“For example, many pubs have a lot more furniture and equipment outside since the pandemic – we’ve adapted our cover to reflect that.
“The post-Christmas period is challenging for the licensed trade sector, but we will still be here providing clients with the best service and cover.”