Publicans urged to review overheads as recession bites

With recent reports showing that pubs are closing their doors at the alarming rate of 39 per week, there has never been a better time for publicans to review their overheads with a view to improving profitability. The double whammy of falling sales and rising costs might seem insurmountable for hard-pressed publicans. But research shows that there’s still much that pubs can do to ensure survival in times of recession.

Attracting new customers and increasing sales is obviously important. But reducing overheads is perhaps a quicker and easier way to have an impact on the bottom line. A recent survey of 2,675 pubs by the Association of Licensed Multiple Retailers (ALMR) indicated that they spend an average of 53% of turnover on controllable costs. About 27% goes on wages and 11% on premises, excluding rent.

Publicans should take a hard look at where the money goes and see if they are getting good value. The good news is that savings are there to be had. For example, data from pub insurance specialists Alan Boswell Group has shown that pub insurance premiums have dropped by about 8.5% in the past two years. According to the broker, the average premium paid by pubs it insures is now around £1,050. That figure is about 30% lower than it was in 2005.

Jon Preston, who deals with our pub insurance scheme, commented, “There are more insurers fighting for a reducing number of pubs, and the competition in the market is more intense than ever. Publicans with a good track record and a decent claims record can expect to save money if they shop around.”

Publicans should not be tempted to skimp on insurance cover. It’s important to get the balance right; saving money simply by cutting down on your protection is a risky approach. Getting the wrong cover for your pub, or using an insurer with poor claims handling processes could finish off a business that’s been weakened by the poor economic climate. As ever, getting independent advice from a broker seems like the best route. The busy publican can effectively out-source the insurance procurement process to their insurance broker.

Slips Trips and Falls

The Health and Safety Executive has recently launched its Shattered Lives campaign to stress the serious consequences that slips trips and falls can have.

Slips trips and falls are the most common cause of accidents, accounting for around a third of major reported injuries, the biggest cause of injury to the UK workforce. Over a thousand people every month are seriously injured because of slips trips and falls from ground level alone.

Slips trips and falls can affect employees, customers, visitors and members of the public so anyone with responsibility for buildings or land should identify, assess and manage the associated risk. Those who own property and land have a responsibility to make it safe.

Compensation for slips trips and falls may not always be substantial but it will not reduce the seriousness of the injury. A similar fall may well find a young person relatively unharmed but be potentially life threatening to an older person with brittle bones.

To say that managing health and safety costs too much money will ultimately lead to higher costs in the long-term. Ensuring that significant risks are managed well is an investment well made. As the saying goes, if you think health and safety is expensive, try an accident!

At Alan Boswell Group, business insurance customers have automatic access to our in-house health and safety and risk management consultant. Please contact us for a free no-obligation business insurance consultation.

Why Do Insurance Premiums Vary So Much?

You may sometimes wonder why the premiums for property owners insurance vary so much, or even why they change mid-year in some cases. Of course, premiums do not change for no odd reason and insurance companies cannot just arbitrarily charge more during the year because they feel like it – or they are losing money on claims.

The reason for mid-term changes is invariably that something has changed; and this is most commonly the use to which your property is being put.

Insurance premiums are based on a number of factors, some of which are fairly immutable and others that can change at any time. The construction of the premises and its location can be a rating factor. For example, an old thatched, wooden barn is far more likely to burn down than a factory that is brick built with a slate or tiled roof; that is fairly obvious and will influence the amount that an insurance company needs to charge for insurance. But a building near to a waterway can also be more liable to flooding than one that is more remote; although this is not invariably the case. Therefore, again insurance costs are likely to be higher.

Premiums can also be influenced by the level of claims that have been experienced by the premises themselves, or in some cases adjoining properties. If, however, the buildings are separated from your property by a significant gap, or there is a perfect party wall - one that extends up beyond the roof line - then the experience of neighbouring property may be of less significance.

Insurance costs can be positively influenced - i.e. come down - where suitable physical protection is in place. This can include such things as fire extinguishers or automatic sprinklers, but not smoke detectors or fire alarms, which are more designed to protect human life than property - which is what fire insurance is about, after all.

The most significant 'rating factor' is, however, usually the use to which property is put. For residential landlords, this is usually relatively straightforward as there are no special factors that make the insurance much more expensive than a normal home. However, in the case of flats above commercial property, even if these are owned by someone else, it is the occupation of the commercial property - unless separated from the residential accommodation by some form of fire break - that affects the cost of insurance for the entire building.

For example, the fire risk associated with a fish and chip shop is significantly higher than that associated with a solicitors' office, or even a hardware store. The same applies to industrial premises. A building occupied for manufacturing pre-formed timber roof trusses is likely to attract a higher fire rating than premises occupied as a store for bathroom appliances. The greater the risk of fire, the higher the premium; it makes sense.

So, how might this change mid-term? The reason that things might change part-way thought the year might be that the tenant has changed and a new occupation is involved, or there is some other significant change to the risk, such as the introduction of a mobile oil-fired heater, or the addition of a sprinkler system. It is not enough to delay telling your insurance adviser until the renewal date. Changes of this nature are material facts and if you fail to notify the insurance company as soon as it happens, they could avoid paying a subsequent claim, because of a material change in the risk.

This seldom happens, perhaps, but it is always better to be safe than sorry. Obtaining landlords insurance for commercial premises is a specialised area and you should always ask your insurance brokers what experience they have of dealing in this sector.
Andrew Regan writes for a digital marketing agency. This article has been commissioned by a client of said agency. This article is not designed to promote, but should be considered professional content.

Hauliers Beware

It has been revealed that reported lorry crime has doubled over the past year, with 4,171 incidents detailed by mid-December 2008. Less than 15% of lorries stolen are ever recovered.

Organised crime is now targeting the freight industry, according to Truckpol.( Truckpol is a national intelligence unit which forms part of the national ACPO Vehicle Crime Intelligence Service, collating and disseminating statistical data and intelligence on road freight crime within the UK)

The theft of large goods vehicles and their loads causes significant economic and logistical harm to manufacturers, operators and retailers alike and the estimated cost to the UK economy is up to £250 million.

"One of the problems that we have is that when we have anything of value, that could be stolen or sold on, we have to make it secure," Don Armour, of the Freight Transport Association, told the BBC.

Alan Boswell Risk Management advises that those responsible for ensuring the safety of drivers, vehicles and loads should plan ahead, consider secure and safe parking areas, fitting tracking devices, providing adequate security training & advice, risk assessment for all drivers, as well as displaying deterrent notices on vehicles. An effective risk managment programme makes good business sense and could reduce your motor fleet insurance costs.

For further information on types of criminal activity and the latest reported incidents visit http://www.truckpol.com/

Forklift truck inspections – How often?

The Lifting Operations and Lifting Equipment (Regulations) 1998 (LOLER) classify forklift trucks as lifting equipment and place a responsibility on the employer to maintain them in safe condition and ensure they are suitable for their intended use. Additionally they require a thorough examination.

Many people assume that thorough inspections are an annual requirement but that is not always the case. The frequency between inspections depends on the type of truck, how often it is used and what it is used for.

Below is a guide for inspection frequency:

• Trucks used up to 40 hours per week - Annually
• Trucks used from 41 to 80 hours per week – Every 6 months
• Trucks used over 80 hour per week – Every 4 months
• Trucks used to lift personnel such as in a basket on forks – Every 6 months
• Trucks fitted with an attachment other than a sideshift – Every 6 months
• Trucks working in arduous conditions – Every 4 months irrespective of use

Modern forklifts normally have onboard computers that record usage so anyone who inspects the truck will know how much it has been used.

So remember if your forklift truck inspector tells you that annual inspections are not adequate he may not be trying to just get more work!

For more information on risk management and business insurance, visit www.alanboswell.com