Business Insurance

[Adrianp]

Hi all,

This is my first use of the forum which I joined a few months ago. I retired from an engineering management career nearly three years ago and went into semi-retirement.
My wife did not want me getting into any mischief and we both had a need of picture frames both for her paintings and my photography and decided to frame our own artwork.

This led on to working for friends and family so we then decided to set up a small picture framing business on the outskirts of Exeter about 18 months ago.

I have built up the business and receive regular work (although I would like more !). I have set it up in a business like manner but have a problem of getting a business insurance.

I would welcome any advice anyone could give me. Are there any insurers specializing in our type of business?

[prospero]

Hi and Welcome Adrianp.

Are you working in a commercial premises seperate from your home?

[Adrianp]

I operate from a home base workshop which appears to be part of the insurance problem.

[Moglet]

Hi Adrian, and welcome to you!

Very good topic. Maybe your best bet would be to find a good insurance broker who may be able to find companies that cover home-based workshops.

Once you do get sorted, it would be great if you could let us know how you get on. I'm sure that there may be other Forum readers who could experience similar problems getting insurance for similar set-ups to your own, and it would be a great help to them if they could find a possible solution to the problem here.

[Dermot]

As I understand how this insurance works, what you need is an extension of your home insurance to also include having a business at your home, not separate insurance for your business at your home.

Mind you I’m speaking for how it works in the South of Ireland, I would suspect that there may be a difference in how things work across the pond.

[markw]

Welcome to the forum. You highlight a problem that many home framers just choose to ignore.

Having just gone over my business insurance in the vain hope that I could renegotiate a better price I know just how demanding some of the conditions have become - especially security provisions on doors and windows. I ended up paying £200 more and having to upgrade most of my locks.

In reality I talked to my insurance brokers to increase the value of cover of customers work in my possession. I had a few occasions last year when the value of some items had become fairly daunting - one painting in for remounting had been valued way above my cover - it was finished and delivered same day to avoid leaving it in the workshop overnight.

Your question highlights more than the problem of getting insurance cover - as getting that cover takes you into a place that many home framers don't want to go - Have you got permission from the local authority to trade as a business from home - Does the tax man know - how much experience have you got to handle customers work ( first time I have been asked that question by insurance broker - Only time I think being a GCF actually proved useful - fact that I have insured with them for nearly 20 years without a claim seemed to be irrelevant). In a nutshell they want to know that you are a legitimate business - shouldn't really come as a great shock as that's what you are trying to insure.

[prospero]

Hmmmmmmm......Insurance companies like people to fit into conveinient pigeon-holes. When they don't it confuses them.

An insurer will insist on a certain level of security. But usually this only extends to a few window locks and maybe upgrading you door locks. Fitting alarms and cctv or whatever doesn't really cut your premiums to a great extent, unless you live in bandit country, in which case they will probably insist.
Have you tried Premierline Direct? I switched to them last year and I found them very helpful, not to mention a heck of lot cheaper. I realise they may not want to take on a home-based setup, but it's worth a call.

You really need seperate cover for equipment/tools, raw materials and customers work held in trust. The last will vary, so it's an idea to pick a base figure and increase it on a temporary basis if you should have an especially valuable piece on your premises for a short period. You should also have Public Liabilty cover if you allow customers onto your premises. Generally, this is not that expensive.

[iantheframer]

Hi

I can only echo the excellent points made above. a decent insurance broker will be a great help. Bear in mind that if you have customers coming to your home you will also need public liability insurance.

Also it is vital to have a decent accountant as you may be able to offset some of you mortgage/ rates etc against your tax, be careful though as this can have capital gains implecations if you sell the property.

Good luck

[markw]

You really need seperate cover for equipment/tools, raw materials and customers work held in trust. The last will vary, so it's an idea to pick a base figure and increase it on a temporary basis if you should have an especially valuable piece on your premises for a short period. You should also have Public Liabilty cover if you allow customers onto your premises. Generally, this is not that expensive.

Looked at a few policies over the years - equipment - stock and work in trust has always been an element of business insurance so not clear why you would insure these separately - Public liability and very often Employers liability are often standard elements as well.

I would agree though that temporarily increasing the amount is a good plan - I had just decided that the general level was too low and would still need to occasionally increase.

[prospero]

Sorry Mark. I meant itemised seperately within the policy.

[Moglet]

Public liability and very often Employers liability are often standard elements as well.

Not sure about how it works in the UK, but from an Irish perspective:

1. Public liability needs to cover all areas where visitors to your premises may set foot. For a home-based business, it would be worth checking whether you limit the area of access to people visiting you for business purposes (e.g. what happens if a very good customer comes to place an order, you invite them into your kitchen for a cuppa, and they have a mishap?).

2. Even if you are a "one-man-band," in Ireland you need employer's liability cover to allow tradesmen to work at your premises. (Again, the "allowed areas" might well be worth confirming in case your sparkie needs a 'comfort break'... )

[Adrianp]

Thanks to all of you for your replies to my problem.

I do have a regular Broker, based in the area where I was last living, that I use for my various insurances and was very surprised when they finally admitted that they were unable to help me.

I note that it has been suggested by Dermot that I could get an extension to my household policy, which I was aware of and had already asked my Broker to look into this, mainly to cover customers artwork, but my they were unable get their agreement, so back to square one!

I am currently looking for another broker in the Exeter area.

I will try Premierline Direct as suggested by Prospero.

I would be happy with just Public Liability and cover on customers artwork and take my chances on equipment and stock.

However I will post replies to let you all know how I get on.

Thanks to all of you once again for your advice. It is a refreshing change that, even though we are all in competition with one another, everyone talks and offers advice. This is something that did not happen in my Engineering career!

[WelshFramer]

Try Tesco. We have our house insurance with Tesco and, surprisingly, they seemed happy to include workshop equipment.

Didn't ask about customers' property, though. I just tell customers that their property isn't insured and is left at their own risk.

[Peter the framer]

In my previous business Norwich Union were the only company interested. This was through a specialised commercial broker. The business insurance companies can be quite sniffy about what they will and will not insure. If they arrange an inspection beware, as they are far more stringent than Health & Safety - make sure everything is shipshape when they come.

[griff buch]

Hi Adrianp
If you are still looking you might like to try AXA Insurance UK plc. I am just renewing my policies -one for the framing workshop and one for an online shop I run from home. They cost about the same at approx £250 pa.
Several years back I used to run a policy specifically for the art/antique trade which was recommended by the FATG; it was costing over £1000 then and the one time I tried to make a claim (I had put a finger mark on a rotten (literally) Chinese silk) apparently I wasn't covered for damage to artwork!!

Having recommended AXA they have now sent me the renewals in duplicate/triplicate together with various other forms and notes which amounts to 6 envelops containing 5 document folders each containing 7 sheets of paper, 34 lose sheets of paper and one pamphlet on the restaurant trade!!

AXA could be part of Bank of Scotland/LloydsTSB.