Have You Been the Victim of Insurance Fraud?
The Association of British Insurers reports that the insurance industry does experience unusually high levels of fraud. The reason, it appears, is that insurance fraud is relatively easy – in comparison to other crimes – to commit, and to date there has been very little research done into this area to determine the most effective and efficient preventative techniques. The term that’s being used to describe these fraudsters is ‘ghost insurers’. Ghost insurers offer low cost yet illegal financial products, such as employer’s liability insurance, motor insurance, and so on, to business and the general population.
Why Are These Policies Illegal?
Current UK law stipulates that insurance products including business policies such as employer’s liability insurance and professional indemnity insurance, for example, may only be legally provided by suppliers associated with The Financial Services Authority, and adhering to the Financial Services and Markets Act 2000. Should you unwittingly arrange for insurance through a non-authorised provider, you may not be able to make a claim for financial assistance in the event that your business suffers from an event.
Protecting Yourself, and Your Business
The good news is that there are many different way in which you can protect yourself and your business from these ghost insurers. Whether you’re looking for an employer’s liability insurance policy, insurance for your business vehicle, or any other form of essential business insurance, here’s what to do:
Don’t choose an insurer because your mate down the pub said they’re great. Use high quality, reputable online comparison websites which clearly show you a list of the insurance companies they’re partnered with. These insurers will likely be the ‘real deal’, as these websites have a reputation to maintain.
If you’ve stumbled across an insurer you’ve never heard of, it’s quick and easy to check if they’re authorised by the Financial Services Authority. The register, maintained by the Financial Conduct Authority, is available to search online by name, postcode, or by their financial reference number.
If you’ve been contacted out of the blue by a company claiming to be able to offer the best rates for employer’s liability insurance, for example, use an online search engine to locate their general contact number and call them back. Never contact an unknown company via a ‘direct line’ they’ve given you.
If something smells fishy, then it probably is. If you’ve been offered an insurance product – either for your business or in a domestic capacity – don’t hesitate to report the insurer to the Financial Conduct Authority. You can report insurance fraud online by providing as much information as possible.
What’s Your Contention Ratio?
When choosing a business internet product to meet your company’s growing digital and communication requirements, it’s important to consider contention ratios rather than simply speed of service alone. Most business broadband packages from major UK providers are ‘contended’ services. This means that a number of users will be sharing the service with you. Uncontended services, on the other hand, are leased lines which offer a dedicated internet service that is utilised exclusively by a single business.
Imagine you select a standard business broadband package with a a 17 Mbps download speed. 17 Mbps is not necessarily the speed you will receive. This is called the ‘speed gap’, and it’s reported that 20 percent of small to medium sized businesses aren’t receiving speeds that their providers are offering. This actually became a very widespread issue, leading to Ofcom introducing new codes earlier this year to ensure that business broadband providers are providing clear speed information to their customers.
The ‘speed gap’ occurs because of contention. If your contention ratio is 50:1, this means that you’ll be sharing your 17 Mbps speed with 49 other users. Of course, this isn’t quite as bad as it sounds – not all users will be utilizing the service at the same time, and some may have lesser requirements than others. However, if your business relies upon a fast, reliable internet connection for internal and external communications, and makes use of voIP and cloud computing services, it can pose a significant problem.
What We Know About Contention Ratios
Unsurprisingly, business broadband providers aren’t too forthcoming with their contention ratio information (leased line providers, on the other hand, are only too happy to shout it from the rooftops!). However, here’s what we do know about contention ratios, and how they can affect UK businesses:
- Average contention rates for domestic broadband customers is around 50:1
- Average contention rates for business broadband customers is around 20:1
- BT admits that their services are contended, but do not specify contention ratios
- Contention ratios for Virgin Media are believed to be higher than those for BT
- The contention ratio of leased lines for businesses is 1:1 (the service is not shared)
- High contention ratios have the potential to lead to congestion, affecting service
- Affected services may struggle to provide adequate upload and download speeds
Lowering Contention Ratios
If you believe that your business internet service is struggling due to high contention rates, there are three options for lowering these rates and boosting your speeds to better meet your requirements:
Why Have You Been Declined Business Funding?
Following low approval rates for business funding during the financial crisis, a major headline that we’ve seen recently is that banks are once again lending to small businesses, with approvals up by 3 percent year-on-year. This information is luring us into a false sense of security, and many SMEs are shocked to find out that their application for business funding has been declined. The question is – why?
Despite a recovering economy, it’s still not quite as easy to secure business funding as it was before the recession. Banks are still wary about the risks associated with lending to small businesses. Here are the top X reasons why your business funding application may have been declined by your chosen lender:
1. High Credit Risk
Credit rating is used to determine the level of risk a business poses to a lender. Typically, smaller businesses pose a higher risk, and new businesses that are just getting off the ground also struggle with poor credit ratings. Research suggests that 47 percent of businesses launched within the last 3 years have are deemed to be an ‘average’ risk, while 19 percent are deemed to be an ‘above average’ risk.
2. High Risk Industry
Regardless of whether you have a good or bad credit rating, your business funding application may have been declined simply due to your industry. Recent reports show that high street bank lending to the manufacturing and real estate sectors is dropping, with these industries deemed ‘high risk’. While lending to construction and hospitality is improving, it is still much lower than for the retail sector.
3. Poor Credit Rating
As with the domestic sector, a good credit rating in the commercial sector can mean the difference between business funding approval and rejection. Many businesses – particularly young businesses – struggle with finances, with 20 percent of business closures due to insoluble financial issues. Banks are less inclined to lend to businesses who are unable to demonstrate a solid financial history.
Unfortunately, we’re seeing businesses to seeking out high interest ‘payday’ style loans as an alternative to traditional business funding, with around 9 percent of SMEs claiming they would consider this course of action. It is essential that awareness of alternative, lower risk sources of business funding is boosted among UK businesses – options such as invoice trading, peer-to-peer lending, and so on. Learn more about the types of business funding available to your company at compareyourbusinesscosts.com.