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Correct and Reduce your Insurance Spend

Undertaking some or all of the following tips will reduce your Commercial Insurance Costs. Start today to reduce your insurance premium, increase/correct your cover and ensure maximum claim benefit thereafter.


1.       Make sure your business description adequately reflects all the activities of your business.  In the event of a claim, one of the first areas reviewed is the business description to ensure that the activity giving rise to the claim falls within the scope of your business description.

2.       Calculate your property and business interruption sums insured accurately. Nearly all property insurance policies have an under insurance clause in them.  If you do not have adequate sums insured this clause will apply and any claim will be reduced proportionately.

3.       Clarify the exact construction of your property from the walls, floor, internal floors and roof. If there are any double skin / cladding panels in either the external or internal building, insurers require to know the infill of these.  Find out the age, when it was last re-wired , re-roofed, re-plumbed. People often describe their building as standard construction and this is a vague term and in the event of a claim can invariably cause issues.

4.       One of the main rating factors for property is the fire risk. Find out what minimises your risk and ensure the broker quoting has been given all the information i.e. sprinklers systems, alarms, water tanks, proximity of nearest fire brigade, number of fire extinguishers and/or hose reels.

5.       If you invest in Health & Safety over and above require by law, make sure your  current or potential insurance provider knows about it.Advise them of the training procedures, induction procedures etc that you have in place. It will help show any prospective insurer that you take your risk seriously and actively try to minimise any possible exposures.

6.       Advise any prospective insurer of the Territorial Limits required, i.e. where in the world both your products are used and/or your employees are involved in work.  Many policies only give Territorial Limits for Ireland and Ireland/U.K  only unless required otherwise. Any activity outside of this needs to be advised to insurers to ensure the relevant extensions are provided.

7.       Know your exact claims history. Give detailed explanations of each claim describing the circumstances, date of event of the claim and any changes you have made since to minimise a similar claim re-occurring.

3 Reasons your Insurance Costs are increasing

As you would have noticed this year, Insurance Costs are increasing for all businesses as Insurers are applying general rate increases in an attempt to offset overall underwriting losses caused mainly by:

  1. Significant increases in the volume and cost of Liability Claims (see below)
  2. Similar increases in motor accident claims frequency and costs
  3. Severe weather events and lack of attention to property risk management


Increase in number and cost of Liability Claims

Several factors have led to rate increases and a reduction in insurer capacity:

  • Between 2012 and 2014, the average cost of claims in Motor Insurance rose by 8%, for Employers Liability it rose by 27% and for public liability it rose by 8%.
  • As for the frequency of claims, the Injuries Board has reported a 36% increase in the claims submitted since 2008
  • The cost of claims in Ireland is too high e.g. the average cost of whiplash in Ireland is €15,000 (while the average cost in the UK is €5,000, or €3,000 in Spain/Italy)
  • Circuit Court Jurisdiction increased from €38,000 to €60,000 and 21 new Circuit Court judges appointed, leading to the average award in the Circuit Court increasing by 21.2% in 2015, following a 13.5% increase in 2014.
  • When the Setanta Insurer collapsed, the remaining insurers are now being asked to price a product to factor in the cost of a competitor failing. Would this happen in any other sector? (for example, Dunnes Stores would not be expected to bail out Tesco if such a default occurred). Quinn and Enterprise Insurances failures are also adding to your insurance premiums.
  • In summation, the average personal injury awards in the High Court & Circuit Court continue to increase – see table below (from Insurance Ireland);

For businesses, it is paramount to note that the excessive levels of award in Ireland are increasing the incentives to commit insurance fraud. So what can you do? At a recent PWC/Willis Tower Watson event in Cork, effective Claims Management was advised as a vital component i.e.

  1. Robust claims reporting and investigation

  2. Invest in CCTV and data recording (including photos and witness statements)

  3. Early detailed investigation enables informed decision making to (a) settle/defend, (b) engage with Injuries Board, (c) pay expenses/earnings etc.

  4. Review procedures regularly and learn from experience


Finally, take note of our advice to reduce Insurance Costs or contact us with your queries.