Between you and us, if we’re being honest, insurance can be a bit of a pain.
But it doesn’t always have to be that way. We like anything that makes life easier and that’s why we think continuous insurance is a good thing; particularly when it comes to something as complicated as professional indemnity insurance.
Not everyone shares our point of view, though (crazy, we know). So we thought it might be a good idea to explain what continuous policies are and why we think they make sense.
What is continuous insurance?
Most insurance policies run for a year – you pay a premium for a fixed period of cover. When that cover runs out, you have to go through the process of buying another period of cover from another insurer or renewing with your existing one.
Continuous insurance, however, doesn't run out and policies don’t need renewing annually. The cover runs from its start date until it’s cancelled (by you or your insurer/broker).
The advantage is that everything, including the premium, stays the same (assuming no amendments need to be made) and it requires zero effort from you to keep the insurance running.
Do I pay more for continuous insurance?
No. In fact, you’re more likely to save money. Insurance premiums generally go up (because claims are always being made). Premiums for continuous policies stay the same regardless of what the market’s doing.
It’s a bit like the difference between a flat-rate mortgage and a tracker mortgage. You just need to decide if it's working for you or against you.
And, if you think there might be cheaper cover out there, you can always ask your broker to have a look for you.
What about the paperwork?
There’s surprisingly little. In fact, depending on the insurer, there might not be any. You might have to fill in a proposal form giving information about the risk to be insured when you start the policy. But even that’s been ditched by forward-thinking insurers and brokers.
Instead, you might be asked a series of yes/no answer questions about you and your business. Usually completed online, this is called a statement of fact and it takes the place of a traditional, lengthy, paper proposal form.
At your policy’s anniversary, you get a copy of these questions – and your answers – in a document called a duty of disclosure reminder. All you have to do is check the details are still correct and, if they are, let the policy roll on. If you're insured with us, you don’t even have to let us know.
If you’re paying by monthly Direct Debit, that simply continues too. Again, you don’t have to do anything.
What about my policy documents?
The schedule issued at the start of the policy is valid until cover is cancelled. If anything changes (your address, level of cover, type of cover etc) it’s updated and a new one’s issued.
Although insurance certificates are continuous too, we send updated ones each year anyway. We found that our clients’ clients prefer to see proof of cover for a specific period of time (they had trouble understanding the notion of continuous insurance).
Isn’t continuous insurance just an opportunity for you to keep taking my money without telling me?
No, but we understand why the more cynical among you might think that.
Believe it or not, insurers prefer the line of least resistance too. And initiatives that cut costs make sense because that means lower premiums for everyone.
It’s our job to make sure you’re fully aware of everything – including when your policy rolls over. We don’t just do it without telling you.
We send you everything you need a month before your policy’s anniversary. That gives you plenty of time to ask us about/change/cancel your cover and shop around (if you want to).
More importantly, however, professional indemnity insurance is a claims made policy. That means you're covered only if your policy is running when a claim is made against you. We're guessing you wouldn't be too happy if we hadn't renewed your policy and you weren't covered.
We're both busy, and continuous cover means neither of us have to worry about that. And that's got to be a good thing.
So I can cancel when I want? No pressure?
Yep. It’s your policy. You can do what you want with it.
If you no longer want the cover, you can cancel any time you like (with 30 days’ notice). If you pay by monthly instalments, you effectively only pay for the cover you’ve had.
Just make sure you’re familiar with the concept of a claims made policy before you do though. Cancelling it might not actually be for the best.
Sounds good. Where do I sign?
You don’t. That’s the beauty of the whole thing. No signing required.
See, we told you it was zero effort.
Image used under license from Shutterstock.claimscontinuous policyinsurance explained