HEREFORDSHIRE & WORCESTERSHIRE CHAMBER OF COMMERCE’S BUSINESS DIRECTION MAGAZINE

“With business costs at a record high, it’s all too tempting to cut corners on spending. But don’t be lured into the ‘false economy’ trap, warns Simeon Chapman, group director at independent insurance brokers Hazelton Mountford.

We’re all looking to save money as the cost-of-living squeeze continues.

But trimming your company budget in crucial areas – such as insurance and cybersecurity – could prove very costly in the long run.

Premium cover

Take insurance premiums, for example. As a business owner, you’ll know your annual buildings and contents policy is index linked to inflation to avoid the risk of underinsurance when renewal comes around the following year.

And as many of us are equally painfully aware, soaring inflation has seen premiums rise between 10 to 15%: “Higher than they’ve done for over 10 years,” Simeon acknowledges.

When combined with ever-rising costs for materials and labour, it’s no surprise that insurance is coming under scrutiny.

But while soaring prices may prompt mutterings of profiteering, Simeon is keen to stress that nothing could be further from the truth. “Insurance has plenty of balances and checks – it’s probably the most regulated industry out there. Indexation is the key factor behind these rises, and market volatility underpins everything.

“On the counter side, under-insurance is the biggest problem we face. We understand cutbacks are tempting – particularly as most types of cover are not compulsory – but it’s our professional duty to make sure our clients are properly insured.

“For example, we’re seeing a rapid rise in theft claims, more so than in the recent past,” Simeon adds, “which is a sad reflection on the economic climate.  Hand tools are a particular target because they can be easily sold on, and high-value car theft is a huge issue too.

“So, I really can’t emphasise enough the importance of retaining adequate cover. Take a minute to think how much your assets would cost to replace in today’s money, it will probably come as a bit of a shock.

“It’s a good idea to get a building reinstatement valuation which guarantees full ‘new for old’ cover.”

Don’t ignore cyber threats

It’s all too easy to ‘switch off’ when faced with scam alerts.

But cybercrime is a massive – and ever more sophisticated – threat.

Simeon says, “Companies take all the right steps to protect their premises against physical break-ins, but often don’t realise their online data is just as vulnerable to attack.

“In fact, cybercrime is probably equally or more damaging than a fire claim, and sadly happens far more often.”

People might think their business is too small to be a target, but everyone is equally exposed, from huge corporations to SMEs.

“Phishing for clicks is still a very easy way for criminals to make money – and spotting fraudulent emails is getting harder.

“In an office, people might ask for a colleague’s opinion if a dodgy looking email comes through. At home, their guard is more likely to be down. We’ve all heard horror stories about system viruses and data protection breaches.

“One of our highly professional clients was cheated out of £415,000, and I think that should be a real wake-up call for business in general.”

Cybersecurity is not just about firewalls, passwords and encryption – it’s also about raising awareness of the danger signs. “You can have every possible protection in place, but system break-ins are the same as breaking down a security door. Criminals simply use brute force to get in and steal your information,” Simeon adds.

So how can Hazelton Mountford help? “We spend a great deal of time in discussion with our clients, evaluating risk and recommending appropriate terms and cover.

“We make them aware of exactly the type of insurance cover they need.  That’s what we’re here for, after all. Cyber insurance is a specialist form of cover, protecting against losses of data, business interruption and liability costs.

“We also tell clients about preventative measures and training to spot the danger signs. “Cover like cyber insurance is not compulsory, but think: Are you willing to take the risk or pay a premium for someone else to take the risk?

“The team is acutely conscious that affordability is a huge factor now. It’s to be hoped that inflation will start falling soon, which will have a knock-on effect for premiums when index linking is applied.

“However, costs also depend on the number of claims that insurers have to deal with.

“So, to sum up, we strongly urge local businesses to have the right insurances – and the right security measures – in place for both their physical premises and digital assets.

“Remember to put the right value on your business premises and contents sums insured, and update your policy amount every year!”

Hazelton Mountford is Worcester’s only independent chartered insurance broker, with a second office in Evesham. Full details at hazeltonmountford.co.uk.

15 years of excellence

Hazelton Mountford celebrates its 15^th anniversary this year.

Founded by group managing director Gordon Hazelton, the company is now one of the region’s leading chartered insurance brokers, with a team of over 30 specialists handling over £13.6 million premium income.”

Read the full September/October 2023 edition of the magazine online here.