With business premiums creeping up, it’s natural to look for ways to reduce your annual insurance bill. 

One option is to consider a higher excess. On paper, it makes sense, as higher excess means lower premiums. 

But – it can be a false economy.

While a higher excess will bring you some short-term savings, if you suffer a loss, it can be a very different story. 

For starters, you’ll need to cover a larger portion of the costs. In the event of multiple claims in a short space of time, the hit to your cash flow (or personal savings) can be significant. 

Remember too that some insurers have different types of excesses that apply in different situations. As always, it pays to understand your policy – well before you sign anything. The best way to do that is to lean on the expertise of a broker. 

Pros

• Reduced premiums
• Suitable if you’re not worried about smaller losses
• Ideal when you can put aside money to pay for the increase in excess

Cons

• Smaller losses usually won’t be covered
• More of your own funds are required to pay for under excess losses or at claim time
• The cost of the excess can add up quickly if you suffer multiple losses

For further information or to discuss your policy and options, contact us today.