Setting business goals? Why you should tell your broker
By Nikki Hookway, Commercial Manager - Manchester
When we think of January, a new year and a new start, we usually think of the obvious. Get fit, eat better, plan some trips and set some career goals for the next 12 months – but what should business owners be considering at this time?
For many businesses the financial year starts in April, which is the perfect time to set personal and professional objectives. In fact, this is something us insurance brokers always aim to communicate with our clients – it’s important to set goals.
Three is the magic number – three months to think about what you want to achieve for the next 12 months. An obvious choice is to save money on insurance premiums – however, this might not always be the most sensible choice.
Help your broker help you
All too often a client will approach me several months into a policy term and advise of a new division of the business they have already begun operating: a chain of beauty salons now offering aesthetics (non-surgical treatments, such as Botox); a toy retailer branching out to America; builders venturing into modern methods of construction. Before you know it one policy is being cancelled and another bespoke policy is being taken up at double the price – and at cost to your profits.
Clients invariably know of these plans beforehand, but don’t think to mention it until the deal is done. While this is understandable (I’m also guilty of thinking I may jinx something if it’s mentioned prematurely!) we recommend talking frequently and openly about your ambitions for your business so that we can help you turn the dream into reality.
You can think of it this way: as insurance brokers, we work for you and form a part of your core team. This doesn’t mean spilling the beans on new projects if they’re sensitive or not to be disclosed. However, what about revealing information about your plans which doesn’t jeopardise that position?
Let’s use this question as an example: “What are the insurance implications if we were to look at American exports?”
It might not be cheap, but it’s worth considering how additional premiums might impact on the profitability of such a venture. Furthermore, a broker could potentially come back with options of insurers – some who might not support US exposure and some who would with a higher premium. However, building the relationship before you ‘need’ the cover might be a good route into ensuring lower premiums when you do move into their new market.
Benefits beyond protection
Insurance isn’t just about covering you when the worst happens. Brokers and insurers alike offer risk management advice and preventative tools to support your goals and minimise the chance of a loss occurring so you’re ready and prepared for the changes you implement. This can also help us negotiate better terms for you.
For example, let’s say you’ve opened a new aesthetics department. Your broker could potentially offer up some tools to help you develop a brilliant risk management program to help convince insurers that although this new department doesn’t have the trading experience to warrant the lowest premiums, it does have a leading risk management proposition.
Tell us your plans
Any good broker will carry out periodic reviews to see how things are going. This is a good opportunity to discuss your plans for the next few years, so that you can understand how likely your business ambitions will affect your insurance going forward. Budgeting is crucial – and premiums are easier to accept when you’ve had time to prepare.
Howden will always take the time to find the best deal on the market, but what we won’t do is cut corners to achieve it. If you have a five-year plan, we will aim to plan around this for you. We are experts in our field and we know how to support you in growing your business to where you want it to be – all you have to do is tell us.
- Including brokers in your long-term plans will allow them to prepare insurers and your business to enter the new market.
- If you have sensitive information, you can ask loose questions, or even enter into mutual non-disclosure agreements to protect the information.
- Ensure you consider changes to your business before signing into any long-term agreements or even into a single year policy. Some insurers can cater for more than you need now, but exactly what you might need in six months’ time – so you won’t need to change insurers at your own cost down the line.
- Consider moving to insurers who can cater to a wider risk profile before you are due to enter new markets – they might be nominally more expensive, but building a relationship with an insurer might recover money when you do move into your new market.
- Always look to disclose whatever is due to happen within the next 12 months. Some insurers have minimum deposit policies, which mean even if you want to cancel the policy without a claim, you may not get a refund if you needed to change insurer. It’s also crucial to consider your Business Interruption calculations – you could become stuck if your profits are already coming to fruition or are likely to in the next 12 months.
Remember: your insurance broker is an extension of your business’ executive team – see them like the risk director. Whatever your quote brief for that year, they should be able to present you with the options and feedback on the best potential moves to help keep your business risk transfer aligned with your risk appetite.
To find out more about how we can support your business goals, just talk to us on 0161 830 1290
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