BUSINESS PACK CASE STUDY
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.
Premiums and outcomes described are specific to this client and indicative only. Your own terms will depend on your circumstances and the insurer.
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.
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.
The point of the exercise was to get the sums insured right, so the cover would actually respond in proportion to the business.
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 Quoting on the outdated revenue would have repeated the problem, so the work was in correcting the figures first and then placing cover that matched.
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.
If your revenue has grown since you last reviewed your policy, your sums insured may be out of date.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.
