Posts Tagged ‘commercial’

How Commercial Insurance Price Comparison Sites Compare Business Insurance Quotes

February 14th, 2023

You may think that one commercial insurance price comparison site is much the same as another. Some people swear by them, others cannot stand them but not all price comparison sites are the same. There are two distinct types and each has its own benefits, advantages and disadvantages.

This is why different businesses and commercial enterprises have very different user experiences, depending upon which type of comparison or price aggregator site they have visited. They may well prefer one brand comparison site over another, purely because they prefer the way that particular brand’s website works and this often has nothing to do with the quotes it returns.

In order to understand the large differences it is necessary to get under the bonnet and look at the anatomy of a commercial insurance price comparison website’s internal engine.

Inside a Commercial Insurance comparison

Leaving aside the prices quoted which are subjective and variable, the major factor that differentiates price comparison sites user experiences, is the location of the rating and underwriting engine that produces the quotes.

This engine is the rules based logic that produces the commercial insurance quotes you see in your browser. It can be either local with centralised processing, or remote with what is known as distributed processing.

Centralised comparisons hold all the commercial insurance policy and rating information local to the web server where a prospective businessman can compare quotes.

Distributed comparisons have to visit each insurance company or business insurance broker website to retrieve quotes and all the policy information which is then displayed on the comparison website. Distributed processing comparison websites are known a ‘Scraper sites’ because they scrape data from the fields of one form and pass it into equivalent form fields at a remote web server.

When someone visits a commercial or business insurance comparison website, they will initially be asked what type of cover they require for their business. For example a shop or office policy or perhaps just simple public liability cover. Commercial insurance is particularly difficult to underwrite, so the type of policies that are available on Internet tend to be packages where blanket levels of cover can be offered, in order to be suitable for the widest range of business activity and customers.

However all commercial risks have some common elements such as levels of cover required, which need to be captured in order to auto-rate and make comparisons. These are called rating factors.

Comparison Screens

The user is next presented with a screen that has been tailored to ask specific questions that are necessary to rate the chosen commercial insurance. Both types of comparison website offer variations on a theme for data capture, however both will use a typical form that requires filling.

As a businessman completes the online application form, the data entered requires validation. The values entered need to fit standardised parameters and exclude all those businesses that do not fit this standardisation. This is achieved by limiting the choice of the user. For example, the comparison site when asking the applicant to describe their business activities or trade type, will only present to the user the businesses and trades it can quote for, in the form of a drop down list.

Centralised processing comparisons are much more likely to do all the policy and underwriting criteria validation on the front-end form, with for example validation of postcodes, addresses, eligible business types, and numerical validation on sums insured. The centralised comparison system uses Javascript and calls to local tables This gives the system a very quick user experience and assures that the system can return a range of quotes for the prospective business. It also allows the system the provide as much data about available polices before the quotation process is complete, because it knows as the form is being filled out, what policies offer what covers for each of the questions asked.

Conversely, scraper processing sites need to feed data into the screen fields on a variety of remote websites, all which tend to require varying details and user input, in various sequential orders. Scraper sites therefore need to ask many more questions in order to be able to try to satisfy as many rating factors and underwriting rules required for as many different competing companies. The complexity of a commercial insurance policy often requires certain information that you cannot ask for later in the process.

Rating

When all the information has been collected, the data is sent to the rating logic to calculate the rates and premiums.

Trade, Turnover and other factors provided by the user about the business are used by the system to define coverage, policy clauses, excesses and limits of indemnity, which can be returned to the user as part of a quote offer.

Rating tables are held online either locally for a centralised rating system or on the remote websites for scraper style distributed rating. The premium price is calculated from the values of the rating factors provided by the user when compared against the online tables. The actual rating factors vary depending upon the type of commercial insurance policy being applied for, suffice to say that if the system is asked to provide quotes for commercial property cover, the risk address postcode will be used to define the theft rate and flood rate, which combined with the rate for the risks of fire for the trade concerned, will produce a rate for the property perils risk. Rates for commercial property, for example, are usually expressed as percentages per hundred pounds of sum insured.

Processing

It is at this point in the process that the differences in the two types of comparison site become apparent to the user.

When a comparison rating engine sat on a local server, processing is much faster. A locally rated panel will return quotes commercial insurance quotes and covers instantly. The system has all it needs at hand to calculate premiums and also return comprehensive policy comparisons of cover and risk options in micro-seconds.

A scraper site however will consist of extensive ‘middleware’ processing, which inevitably slows down the process. The role of this ‘in the middle’ software is to communicate with the remote websites where the rates are held, and pass all the users details. It then needs to collect the quotes and associated data coming back from the broker or insurance company server and structure and order it into a webpage that shows a price comparison.

The process may take a few minutes when multiple business insurance providers are being asked to quote. The upside is that distributed processing scraper sites generally compare far more policies or companies offerings and more often than not, will return many more quotes. If you can be prepared to wait! You have to wait for the processing to complete on the remote brokers servers and for the quotes, excesses, and terms and conditional clauses to be returned to the comparison website..

Distributed processing comparison sites may have a lot more companies competing and returning quotes, although this does not necessarily mean more choice of commercial insurance. Quite often they are offering the same product from the same company, the only variance being a price differential.

Offering too much choice can also have its downside and create technical and promotional problems. Many of the smaller brokers offering more specialist business insurance propositions, have joined large, well-known brand name commercial insurance comparison sites that employ the scraper methodology. However they often complain that they do not have the server processing power to be able to handle a flood of multi-stringed requests for remote underwriting and processing and by time the quotes are returned to the comparison site, the user has already been offered perhaps thirty or more policy propositions and gone elsewhere.

Comparing Business insurance Quotes

After all the processing has been completed the quotes are presented to the user, usually in order of cheapest first.

Both types of quote and policy comparison site allow the user to compare prices and premiums quoted, however only the centralised sites allow in-depth policy comparisons and to make changes to the original data entered.

Locally centralised comparisons allow the user to compare premiums and also adjust the propositions, add or remove covers and tailor a policy to a particular business needs.

Scraper sites do not allow this as they require all the information beforehand and demand that the user chooses any options or additional covers before the quotation process.

In this sense they only provide a range of premium prices and attached policy conditions for the user to choose from. The scraper sites make no provision to compare policy covers, whereas a centralised local processing comparison site will have all the information to hand for a complete policy and cover comparison. These features are not available for a comparison site that uses remote underwriting. In order to do this it is necessary for the user to visit each individual site, make the adjustments and return to the comparison site to compare quotes, before repeating the process, which is obviously very time-consuming.

Security should be a concern for all those using commercial insurance comparison websites. Although all comparison sites use secure servers and SSL sockets for transmitting the information supplied about the business, by its very nature a centralised processing site will be more secure. With scraper sites your details are being passed around possibly to up to fifty or more different sites around the web, each which could be compromised at any stage of the data transmission, including payment. Furthermore passing your details to fifty companies is effectively adding your business details to fifty mailing lists.

In summary, the user experience is much faster and more informative for businessmen seeking to compare commercial insurance quotes if they use a centralised price comparison website where everything is in one place. Better deals may be had from a distributed processing scraper site, however the process is long-winded with too many questions and too much waiting time. Too often insufficient policy information is returned with the quotes for the prospective buyer to make an infor

Choosing A Commercial Insurance Policy

June 14th, 2022

Choosing the correct commercial insurance for your business needs can be daunting enough even for a seasoned businessman or negotiator. For a start-up enterprise ensuring that the business has full and proper protection against all risks, it is an even larger minefield.

There are however some basic rules of insurance, which if born in mind while looking for the right commercial policy, will ensure that the enterprise is neither under or over insured and has the necessary cover in force.

For a commercial insurance contract to be valid the proposer must have what is known in the industry as ‘an insurable interest’ in the object of the cover. This immediately helps define the type of property insurance policy that a businessman might require.

The business risks to be insured under the policy are not the physical object themselves but the financial value of such, which is defined as the interest that a policyholder has in the objects should they suffer loss if the insured risks occur.

Clearly then the type of policy that a business will require depends upon whether the proposer is the owner of the commercial property, or a leaseholder or tenant.

An owner of a commercial premises who lets or leases a building, no matter the type of business activities that may be pursued there, would only have an interest in the buildings fixtures and fittings of the property concerned and any liabilities to the public that may arise from these.

A lease-holders interest in the buildings may be dependent upon contract of lease and should be checked thoroughly with the agreement. Often a contract will make it the responsibility of the lessee to provide cover for the lease term.

Owner occupiers of commercial premises will have a financial interest in both the buildings and contents of the property and will require insurance for both.

Rented commercial property buildings cover is not usually the concern of the tenant who will only have an insurable interest in any contents of the building and in any improvements that they may have made to the property in order to carry out business.

Before getting any commercial property insurance quotes it is necessary for the businessman to calculate the values of all the buildings, contents and stock. Buildings value should be based upon the rebuilding costs following a total loss and allowing for inflation. Accurate annual turnover figures will be required for contents insurance. If high value stock items are kept at the property, then the value of these should be determined individually.

Applying for commercial insurance quotes online might only take a minute or two to complete, however the preparation needed to obtain accurate data to supply to the insurance company could take a lot longer. It is unlikely that even the small businessman has calculated the value of his office contents for replacement purposes.

Ensuring that the information you supply on a commercial insurance proposal form is correct, is not only legally required, but is essential if you wish to avoid problems if a claim has to made at a future date. Problems can quickly arise with disagreements over the value of stock or office equipment values following a major loss, especially where the declared values are not sufficient and an average or proportional reduction to a claim is imposed.

Having established any property risks that a commercial enterprise may be exposed to it is then necessary to look at all the potentialities and risks that the business might be liable for, in the course of carrying out its commercial activities.

Liability insurance is essential for all enterprises, large or small.

Public liability insurance protects the business against any claims from the public for loss or damage suffered, for which the business could be held liable. Employers liability, a type of workers compensation insurance, protects a business against being sued by its employees and is a legal requirement.

Most commercial liability insurance is sold by trade or professional type with risks and covers that are specific to that business type. Additional liability insurance such as professional indemnity insurance which covers professionals against negligent advice or product liability for shops providing goods, are examples of such.

Buying a combined tradesman or professional service stand-alone liability product is today a simple process using one of the many liability insurance comparison websites that exist online.

It is possible to buy commercial insurance for both liability and property combined for any type of business, under what is called a ‘combined commercial insurance policy’. This type of flexible contract allows specific risks to be added and limits of indemnity chosen and is often known as ‘all risks’ cover.

For specific types of commercial insurance risks such as shops and offices, where property values and liability cover can be easily assessed, it is now possible to compare many covers and buy online what are known as packaged policies.

The Internet offers many full ‘all risks’ commercial insurance policies covering every eventuality and consequential loss, which are available from online insurance brokers, comparison sites and direct from commercial insurance companies themselves. If you have any doubts about the necessary cover for your particular business it is advisable to consult a commercial insurance broker