smallbusiness.co.uk: Helping your business think big

Not surprisingly, the UK is currently experiencing a higher-than-usual level of flood-related insurance claims. A recent study indicated that the majority of businesses that suffered a major insurance claim, where production fell by more than 80 per cent, failed after a year, regardless of how good their insurance cover was.

The problem is that good insurance can replace your buildings, machinery and stock, and can compensate for your loss of profits, but it cannot replace your customers or the goodwill that you may lose during even a short stoppage.

The actions you take will often determine the outcome of the insurance claim and the future success – or otherwise – of your business.

SmallBusiness.co.uk and Federation of Small Business (FSB) claims consultant Peter Satchel provide some points to help should you need to make an insurance claim:

Plan ahead - What you do on day one may make or break your business. You need to draw up an action plan and know where you are going.

Be prepared to prove the value of your claim - Insurance companies will almost certainly want to check the validity of a claim. If something has been damaged, it may not be practicable to keep physical remains of, for example, foodstuffs, so it is best to ensure you record and photograph such items before you dispose of them.

Insurance companies employ companies that specialise in cleaning and removal of damaged stock, contents and so on. These companies will often carry out an inventory as well, but you should check it very carefully against your list.

Stand up for your business - The insurers want to save money, but you need to save your business. If you don't like what is being suggested, say so. You have the right to argue. Remember that you should be in charge.

Think of the consequences - If you are a retailer and the insurer suggests that you might have a sale of salvaged goods, you may want to resist this. You may find that you end up selling goods at a discount that you could have made a claim on. You should insist that damaged stock is removed to a reputable salvage dealer, de-labelled and sold well outside your region.

Insist on independent builders and surveyors - Where major building works are concerned, you should insist upon an independent surveyor (there is cover for such charges under most policies) who can identify the work that needs to be done, put the matter out to tender and supervise the repairs. They will provide you with certification at the end of the procedure, which ensures that the value of the building is maintained.

Focus on running your business - If needs be, call in a professional to deal with your claim. It will save you time, could result in a better settlement and may even save your business.

Talk to your customers - What you tell your clientele is important. They need to know that they can rely on you to supply the goods. They do not want broken promises or lies.

Should you use a loss assessor? - It is generally reckoned that the use of a loss assessor, who will asses the damage and act on your behalf to gain compensation, improves the return on the claim by as much as 30 per cent. In general, costs are under 10 per cent of the eventual payment. For more information contact the Institute of public loss assessors - visit www.lossassessors.org.uk

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