Posted on 17th March 2016
Stealth tax should prompt rethink on business insurance
Businesses should examine their insurance policies carefully in the light of higher Insurance Premium Tax (IPT) announced in the Budget, Burgess Hill brokers Bennett Christmas said today.
On Wednesday, the Chancellor said the levy charged on most commercial and household policies would go up by 0.5% to 10%.
The tax hike follows a 3.5 percentage point rise in the IPT last year.
“But that’s unlikely to be the end of it,” said Mark Bennett, CEO of Bennett Christmas Insurance Brokers. “The IPT has already gone up once in the past six months and while this increase is less than was widely anticipated, the direction of travel is clear.
“Our concern is that small businesses will look to cut costs by reducing their cover and increasing their exposure when what they should be doing is looking at where the biggest risks are in the business and prioritising what they need.
“Most packaged insurance policies include the ‘must-haves’ but they also lump in some of the ‘can-do-withouts’. By looking carefully at the business, a good broker can build a bespoke policy that’s often better than what you had and costs you less.
“For example, many policies include cover for goods in transit but they don’t include cyber insurance. You may only carry a couple of thousand pounds worth of goods in a van, but your company’s cyber exposure could stop your business altogether if your computer network is infected and this is likely to cost a lot more; I think I know which I would choose to include in my policy.”
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