Gulf News: “Choosing the Right Insurance Policy”

Q. I run a chain of pizza restaurants that deliver around Dubai and I want to ensure that I am covered against all the problems that can beset a small firm like ours, such as damage to my property, public liability, motor insurance etc and I want to know if I have to get separate policies out to cover these issues or if there’s one product that I can get that can cover me for everything?

Running a pizza restaurant and delivery business, such as yours, surely raises many issues when it comes to insurance and being prepared for unexpected events. This is the case for many small to medium businesses and as a result there are many insurance options available on the market for people in your position – both single policies and packages.

However, the sheer amount of available products can make it difficult for those in your position to determine what type of coverage is most suitable, and one of the most prudent things you can do is seek the advice of an independent financial advisor. The advisor can carry out a risk management exercise of your pizza restaurant business, which is usually free, and can offer you advice based on a real understanding of your business. This is invaluable in making sure that you make the right policy choices.

One of the possibilities, which you have mentioned in your question, is opting for a packaged policy. These have been developed by the industry over the years to assist small to medium business owners in getting the right cover to suit their individual needs, helping to ensure there are no coverage gaps. These packages can be extremely cost effective due to the fact that they are ready-made, with low operational and development costs.

These packaged policies commonly include; property all risks – covers accidental loss or damaged caused to your business property and contents, business interruption – covers loss of business income caused by the perils coverd under the property section, public liability, motor insurance, workers compensation, fidelity guarantee, electronic equipment, travel, petty cash, personal accident, goods in transit, machinery breakdown and deterioration of stock.

You can tailor the package to suit your needs, but most policies require property or public liability to be a compulsory component – they will also ask for a minimum premium and will stipulate the maximum that can be insured per policy. Caveats on the maximum number of vehicles allowed in the insured fleet and the number of locations that can be covered as part of one agreement are also commonly included.

If you do not think a packaged policy is right for you then your advisor can assist you in taking out individual policies to cover the afore mentioned areas, as well as your own personal insurance needs.

A key point to remember when taking out any insurance policy is not to be tempted to under declare the value of your assets, or estimates of revenue, just to save money, as in the event of a claim you will be penalised for under insurance. A better way to keep the costs down is to ask for options on higher deductible sums – the amount you have to bear in the event of a claim. Make sure you take the time to understand the policy cover and exclusions in conjunction with your advisor.

Ian Walton, Director – General Insurance, Nexus Group.

www.nexusadvice.com

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