Business insurance rates are on the rise
The impact of the pandemic has been felt in many different ways. Some of the effects have been quite immediate, but now many businesses are starting to see how the events of the last year are affecting their annual business insurance rates as well.
Before COVID-19 struck, there were already a number of factors adversely impacting the insurance industry and the market has steadily deteriorated during the last year. Beyond the pandemic, the industry has also been affected by:
- Changes in legislation
- A sharp rise in UK property rates
- Flood and storm damage claims
- Rising reinsurance rates and reducing capacity
- Lower interest rates
The combined effect of these issues and COVID-19 has meant that many insurers are now looking to increase business insurance premiums in the year to come.
With many businesses already struggling with cost and cash flow management issues, a sudden increase in insurance rates could damage their ability to recover later in the year.
To combat some of the issues listed above, the insurance industry is reacting. One such area is specialist insurance for those in high flood risk areas, which uses a very practical approach.
If a business has previously been flooded, is at risk of flooding or has flood insurance in place, a new product has been created that is essentially a drain pipe attached to the outside of the premises.
When water levels reach a pre-agreed height on the drainpipe, the insurance policy pays out a pre-agreed sum of money immediately.
This new type of policy is not based on damage costs, like a traditional policy, and can be used as flood insurance or as cover for the excess on existing flood insurance.
This is one of several new insurance products on the market designed to reduce premiums, which is why businesses need to assess their current level of cover and the costs involved.
Discover accountant costs in Northampton, what affects fees and what accounting packages include. Contact 10CA for a tailored quote.
The 12 months since the last Budget was delivered have seen significant change. A more challenging global macroeconomic outlook, yet more inflationary pressures...
According to the latest Hiscox Cyber Readiness Report, almost two in five small businesses in the UK suffered a successful cyber-attack in the last year, with each attack costing an average of £26,650. Globally, cyber incidents cause around 32 hours of operational disruption a year on average. Cyber-attacks are no longer exceptional events, being viewed more as recurring costs, so businesses must prepare themselves financially for the impact. How should you prepare your finances in advance of a cyber-attack? A cyber-attack is slowly and sadly becoming a reality for many SME owners across the UK. To prepare, business owners should assess the potential financial risk a cyber-attack poses and forecast cash flow to ensure their business can survive one. It could also be beneficial to value your data assets to estimate the worth of any lost revenue and recovery expenses. Business owners may also want to keep offline playbooks. These are secure, printed offline copies of critical financial contacts, account numbers and recovery protocols to ensure that your business has key information in the event of a cyber-attack. Additionally, your business should establish strict double-check procedures for unusual payment requests or changes to supplier details to prevent business email compromise. You should also factor cyber insurance premiums into your operational risk management to ensure that you are prepared for any eventuality. What should you do to get your finances back in check after a cyber-attack? Should the worst-case scenario happen, once you are back on track, the first thing you should do is speak with your accountant. Your accountant will help you to calculate the exact monetary value of damaged assets, lost revenue and stolen money so that you know exactly where your business stands. They will then review your financial data and your tax records to establish a baseline for recovery and determine if the business can continue or if restructuring is necessary. Accountants can also help during complex cyber insurance claims by submitting the required evidence to ensure fair financial assessments of the business interruption costs. Once you have received any insurance payments, an accountant can advise on the tax implications. How can we help? Cyber-attacks are becoming more prevalent for businesses up and down the UK. That is why it is imperative that you receive advice on how you can best prepare your finances in a worst-case scenario. Our team of accountants can help you to prepare your business for a cyber-attack and in the event of a cyber-attack, we can help you pick up the financial pieces. Get in touch with our team for support with preparing your business for a cyber-attack.