BUSINESS PACK CASE STUDY
Restaurant Business Pack After an Outdated Sum Insured
A restaurant was trading on a policy schedule several years old. Revenue had grown more than fourfold since it was set, which left the cover badly out of step with the business.
THE SITUATION
A restaurant came to us still insured on a policy schedule that dated back several years. The schedule noted revenue of around $500,000, but the business had grown - current revenue was about $2.1 million.
That is a more than fourfold gap between what the policy assumed and what the business actually was. An insurer settles up to the sums insured you declare, so a stale sum insured can leave a business well short at claim time.
OUR APPROACH
We rebuilt the submission on current figures before taking it to market, so underwriters were pricing the business as it is today rather than as it was years ago.
- We updated the revenue and operational details, replacing the years-old schedule with an accurate picture of the restaurant.
- We approached eight markets for a business pack reflecting the corrected figures.
- We compared the terms that came back and walked the client through the options on price and cover.
The point of the exercise was to get the sums insured right, so the cover would actually respond in proportion to the business.
THE CHALLENGES
We approached eight markets; several did not have appetite, so the spread mattered.
The bigger issue was the underinsurance baked into the old schedule. Quoting on the outdated revenue would have repeated the problem, so the work was in correcting the figures first and then placing cover that matched.
THE OUTCOME
We placed a right-sized business pack through Zurich, built on the restaurant's current revenue rather than the years-old figure.
Final Solution: A business pack placed through Zurich on corrected sums insured, at a premium of approximately $5,900.
The restaurant now holds cover that reflects what the business actually turns over, which is what makes the difference if it ever needs to claim.
This case is a reminder to revisit your sums insured as you grow. A schedule that is a few years old can quietly leave a business underinsured, and correcting it is one of the most useful things a broker review does.
Put this placement in context
More Case Studies
All case studiesRestaurant at $2M Revenue, Business Pack Remarketed After Four Declines
How we remarketed a business pack for a restaurant whose revenue had grown to around $2 million on a schedule still showing $500,000, with four insurers declining and four quoting from around $5,900 to $13,900.
Read case study Business PackWholesale and Retail Bakery: Machinery and Business Interruption
A Victorian bakery running both retail and wholesale needed a business pack covering $700K of contents, machinery breakdown, and business interruption. Several markets declined. Placed through Zurich.
Read case study Business PackHigh-Pressure Cleaning Business: Portable Equipment and Liability
A Sydney high-pressure cleaning business working at height needed $20M public liability plus cover for portable equipment. Three insurers declined on occupation. Placed through CGU.
Read case studyHas Your Business Outgrown Its Cover?
If your revenue has grown since you last reviewed your policy, your sums insured may be out of date. We review your cover against where the business is now, so it responds properly if you claim.