The quote document has a lot of important information including an overview of the cover you've selected, what jurisdictions are covered and policy excess. This is why it's such an important document and one you should review before buying insurance.
If you're getting a quote for the first time this document will be called 'insured quote'. If you've purchased a policy it will be called 'insured schedule'. Let's walk through a test document with the aim of building your confidence around understanding your insurance.
Item 3. of your quote displays what products your quote is for. In this example we have professional indemnity, public and products liability, contents (both at premises and portable) and legal expenses insurance.
The annual premium can be seen below this. If you're wanting to pay in monthly installments you can divide this figure by 12 to calculate your monthly payments.
Item 4. lists the services you provide clients that you are insured for. I applied for a quote as a web designer and you can see 'web design' is included in the professional services. A lot of designers call themselves product designers or UI designers. That's fine. This would still be captured by the web design activity, but insurers use generic terms when talking about professional services.
We don't need to disclose specific details like wireframing, browser testing etc because we expect that to be part of a web designer's workflow. However, if you offer clients another service like photography we'd need to add this to the list of professional services because it's a different activity to web design.
If you're confused you can always get in touch for guidance.
General endorsements applicable to the policy
Item 5. lists the endorsements that have been applied to the policy. In most cases this will mention website recovery services and senior executive replacement. These are value added services the insurer provides at no extra cost. The inclusion of these endorsements does not affect your policy price.
The endorsements are covered in more detail later on in the document, but the gist is:
- Website recovery service provides technical support if your website suffers a denial of service attack
- Senior executive replacement sources and pays for a temporary replacement if a senior member of staff is ill and unable to work
If these aren't applicable to you they can be ignored.
Next we move onto the individual products. Each insurance product can have a different level of cover, excess and jurisdiction.
Professional indemnity insurance and public and products liability
The layout of these two products in the quote document is very similar so we'll review them together.
1. Overall limit of liability: This is where you'll see your level of cover. In this quote I have chosen £100,000 of professional indemnity insurance. This is for each claim, so if I have the misfortune of making two claims in the policy period I'll have a pot of £100,000 to help me for each claim.
You'll notice sublimits beneath the level of cover. This is for claims specifically relating to regulatory penalties, PCI fines, forensic defence costs etc. If you want to understand more about what these are, you can open your policy wording document and search for the terms.
2. Excess: Depending on the nature of the claim the excess is either deducted from the payout or will be your contribution towards the claim. For example, if the mitigation costs clause is triggered the insurer will pay you the amount owed to you by your client minus the £500 excess. If you've infringed copyright and must pay £5000 in damages, the insurer will contribute £4500. The remaining £500 (the excess) would be your contribution.
3. Retroactive date: Think of the retroactive date as when your cover starts. It can be different to the policy start date because you might have had insurance with another provider and switched insurers, or you might have paid an additional premium to backdate the cover to when you started your business. The best solution is to get insured as soon as you start trading.
4. Territorial limits: This part confuses customers but it's actually very straightforward. You will be covered for your business activities provided they're carried out in the territories listed here. This is especially important for policies like public liability insurance where accidents and injuries occur. If you're on a business trip abroad and somebody sustains an accident as a result of your work activity, you will only be covered if it's happened within the territorial limits.
The above image is for the professional indemnity product. The territorial limits of your public liability policy is UK and EU, but these can be extended upon request.
5. Jurisdictional limits: How does this differ to territorial limits? The territorial limit is where you carry out your business activities from, but jurisdictional limits refer to what court the claim is handled under. For example, if a contract with your client states claims will be governed by US jurisdiction then you won't be covered unless you extend your jurisdiction to include US and Canada.
Jurisdictional limits can be extended upon request for an additional premium.
We start with the address your contents are insured at. I've used my office address and it includes the value for the computer and ancillary equipment I keep here, and the value for other contents I store at my office. For example, a £1700 desktop computer and £1149 standing desk.
Beneath this is the portable computers and portable contents section. Since I have a laptop, which is a portable item designed to be moved between locations, I have insured myself for £2000 of portable contents.
You'll want to be mindful of what contents are kept permanently at the address listed on your schedule, and what contents are captured by the portable definition.
1. Additional limits: In addition to the sum insured for your contents the policy also has additional features like reconstitution of electronic data, lock replacement and personal assault. If you want to understand more about what these additional limits are, you can open your policy wording document and search for the terms.
These additional limits show the benefit of having a contents policy specifically for your business equipment.
2. Excess: With contents claims it's a cash payout minus the policy excess, which in this instance is £250.
The insurer will pay for the cost of repair or replacement of the contents as new. If it isn't reasonable to rebuild or repair (in other words, if the cost to repair is close to the value of the equipment), the insurer will pay the fair market value of the contents at the date of the loss.
3. Territorial limits: This is the territory where your contents are covered. Portable contents are insured worldwide. However, it's UK-only for contents kept at your premises.
Commercial legal expenses
1. Limit of liability: This is where you'll see your level of cover. The legal expenses product is limited to £100,000. This is for each claim, so if I have multiple contract disputes during the policy period the limit of liability is reset for each claim.
Whilst we can adjust the level of cover for most products, the legal expenses policy is capped at £100,000.
2. Territorial limits: You will be covered for your business activities provided they're carried out in the territories listed here. With the legal expenses product this is UK, EU, Norway and Switzerland. The territorial limits can't be extended for the legal expenses policy.
If your schedule doesn't say 'UK' then it was probably issued before the Brexit update. Rest assured the legal expenses policy includes UK, even if your schedule doesn't explicitly state this.
From this point on the insured quote document goes into more detail about the senior exective replacement and website recovery endorsements. It also provides some mandatory information around data protection, but all of the details that are relevant to your cover have been detailed above.
Still confused? Feel free to reach out and talk to a human.