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What is commercial combined insurance and does my business need it?

If you’re a business owner, you may have heard of commercial combined insurance.

But what is it, and does your business need it?

In this article, we’ll explore the topic of commercial combined insurance and its importance for businesses of all sizes.

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What is a commercial combined insurance policy and how does it work?

Businesses face many different risks and often take out lots of different policies to cover everything. With commercial combined insurance, however, you get one policy incorporating a wide range of protection.

You can usually pick and choose the types of business insurance and the level of protection you need, which works similarly to add-ons.

Sometimes, these add-ons are linked, meaning you can only select them if you’ve taken out one of the key covers.

With just one policy to manage, you’ll only pay one premium and have just one renewal date.

What can commercial combined insurance cover?

Each insurer offering these products has its own options of cover to incorporate, and some more specialist insurers can enable you to access the more uncommon types.

Generally, these are the kinds of cover you can expect to see on offer with a commercial combined insurance policy:

  • Business interruption – cover to pay for necessary expenses if your business must pause operations due to circumstances such as natural disasters, pandemics, fire or safety issues caused by neighbouring buildings.

  • Property damage – like personal property insurance, this cover protects the building, contents, stock and other items that may be damaged by an insured reason.

  • Specified all risks – you can usually cover specific items that you list when you take out your policy.

  • Liability – covers the legal costs and potential payouts for claims from employees and the public if they’ve had an injury at your business or as a result of your products. It may also protect against claims of any property damage caused by your products or business. You may be able to get combined liability insurance, which includes a mix of employer, public and product covers.

  • Professional indemnity – if you give professional advice, this cover protects against claims from customers that they have lost out because of mistakes you’ve made. The insurance helps pay for the cost of legal fees and any compensation you have to pay.

  • Legal expenses – this covers the legal costs of getting advice or representation for a range of disputes and compliance issues. Sometimes, it also pays out when you or employees have to attend jury service.

  • Stock in transit – if you deliver your goods, either yourself or through a third party, this pays for losses if something happens to them while they’re in transit.

  • Money – this is protection for your business’s money. Some providers only cover for money held on site, while others provide protection if it is stolen remotely through fraudulent activity.

  • Equipment breakdown – covers the costs of damage to machinery, a plant and, sometimes, computers, which may include aspects such as the cost of repairs and replacements.

  • Computer insurance – if the equipment breakdown doesn’t cover computers, you can take out this separate policy, which will also usually cover the software and the losses you’ve incurred from the breakdown, as well as the hardware.

  • Deterioration of stock – provides protection against the costs of perishable goods deteriorating when they are stored correctly.

  • Terrorism – protects you against losses from damage specifically caused by acts of terrorism.

  • Loss of licence – this covers for the loss of income you may face if your licence is taken away, meaning you can no longer sell certain products, such as alcohol.

What are the advantages of commercial combined insurance?

Here are some common reasons why businesses opt for this type of business insurance policy:

  • Flexibility – you can tailor the product to your exact business needs, making sure you’re getting the right level of protection. As your needs change, you can easily adjust the policy.

  • Cost-effective – being able to get the optimum level cover can make financial sense, but it is important to shop around to make sure it’s cost-effective for you.

  • Easy to manage – rather than having lots of insurance covers with lots of premiums to pay and renewable dates to stay on top of, you just have the one policy to manage. It can also save you on research time for many different policies.

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What are the disadvantages of commercial combined insurance?

  • Might not cover your needs – although commercial combined insurance is very flexible, the more specialised types of cover might not be available. However, a financial adviser specialising in protection can often find you bespoke policies.

  • Cost – commercial combined insurance is generally cost-effective but you might find it cheaper to take out numerous policies depending on your requirements.

Do I need commercial combined insurance?

Every business needs insurance of some form, but the type and level of cover you need will depend on your specific risks.

Getting combined insurance is popular for businesses carrying out large-scale operations, as they need to cover lots of risks.

Industrial businesses, like manufacturers, wholesalers, importers, and distributors all fall into this category, and they may benefit from having their machinery, employee liability, transportation, property and money risk all protected under one policy.

However, small businesses may have fewer such requirements (e.g. less equipment, little or no travel, few or no employees, limited direct contact with clients) often take out the few policies they need, with some only requiring one main type of cover with a couple of add-ons.

Ultimately, the decision is yours. New types and varieties of business are evolving all the time, and as businesses themselves become more bespoke, so might the insurance that they need.

Getting the right level of insurance cover for your business

A number of providers offer commercial combined insurance.

You can use comparison sites to see how it would cost to get various policies covering your needs, but it might help to go through a broker to access the best deals on the market.

It is also worthwhile speaking to an independent financial adviser (IFA), as they can let you know the exact level of cover you need and help you scan the market for the right deal.

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About the author
Nick Green is a financial journalist writing for Unbiased.co.uk, the site that has helped over 10 million people find financial, business and legal advice. Nick has been writing professionally on money and business topics for over 15 years, and has previously written for leading accountancy firms PKF and BDO.