Business Insurance Policy and the importance of the Business Description
One of the most important parts of your business insurance policy is also one of the most basic; the business description. The amount of detail included within the business description varies from Insurer to Insurer. For example Insurer A may just state that their policyholder’s business is “printers” whilst B might go into a lot more detail and show a business description of “lithographic and digital printers, printing of large format graphics, printing of greeting cards, property owners and business ancillary to the aforementioned”.
So if your business insurance policy is placed with Insurer A how do you know that they fully understand your business? If you are using an Insurance Broker, which I really hope you are, then you should ask your Broker to show you a copy of their market presentation. This document will include full details of exactly what it is you do, what you make, what your product does, who you sell it to, etc., etc.
If your Broker has arranged your policy through an Insurer’s online quote system, or if you have arranged it direct yourself, then it is more than likely that you will have a simple, straightforward business description such as “hotel”, “builder”, “HR consultant” or “carpet shop”. This is fine as long as you are happy that your business does not do anything out of the ordinary and that you can comply and agree with all of the policy terms and condition, and all of the assumptions detailed on the Statement of Fact or Proposal Form.
A classic example of where a straightforward business description can lead to problems is the world of Web Design. Most of the online policies available for the Web Designer or Developer have a business description of just “Web Design”. What the business description drop-down on the online quote engine does not tell you is that the majority of these policies will not cover you if you provide hosting service, or if you build ecommerce sites, or if you provide chat room or forum on your website. These details are contained within the Statement of Fact.
The moral of the story is simple, if you want to avoid any possible nasty surprises when you need to rely on your Business Insurance Policy and make a claim then please do make sure your Insurers do know and understand exactly what it is your business does.