Quote Commercial Insurance: Complete Guide for UK Businesses
Why is a commercial insurance quote more than just a number?
Almost everyone who asks for a commercial insurance quote does the same thing with it: they look at the price, compare it to the last one, and pick the lowest. It is the most natural reaction in the world — and, for a business, one of the riskiest. A commercial insurance quote is not a price tag. It is a legal offer, built on the information you supplied, promising to pay a defined amount only if specific conditions are met. The number at the bottom tells you almost nothing about whether the policy behind it would actually respond when you needed it.
That gap — between what a quote appears to cost and what it actually protects — is where most uninsured and underinsured losses begin. In 2026 the commercial market is unusually competitive: commercial rates fell in 2025 for the first time in six consecutive years, with commercial combined premiums down roughly 0.8% across the year. Cheap quotes are everywhere. Knowing how to read one, what legal duties bind you the moment you accept it, and where insurers are quietly cutting cover to win the price — that is what separates a business that gets paid from one that gets a fight.
This guide breaks open the commercial insurance quote: how the premium is built, what the duty of fair presentation under the Insurance Act 2015 means for you, why the cheapest quote often hides the most expensive gap, and how to compare quotes like an underwriter rather than a shopper. Miller & Partner approaches every placement through The Insurability Framework™ — a structured method covering underwriter intelligence, difficult-risk expertise, risk assessment, and claims advocacy — and you can see how that thinking applies to your own quote throughout.
Key facts about commercial insurance quotes at a glance
- A commercial insurance quote is a conditional legal offer based on your disclosures — accepting it triggers your duty of fair presentation under the Insurance Act 2015.
- The premium on a quote is built from rating factors: trade, turnover, payroll, claims history, location, sums insured and excess — not a flat rate.
- Insurance Premium Tax (IPT) at the standard 12% rate is baked into most commercial quotes and, unlike VAT, a business cannot reclaim it.
- Around three-quarters of UK commercial properties are underinsured, and the average clause lets insurers cut payouts proportionately when sums insured are too low.
- The cheapest quote frequently wins on price by removing cover — lower limits, wider exclusions, higher excesses or restricted business descriptions.
- Employers' Liability cover is a legal requirement for most UK employers, with a minimum £5 million limit and fines of up to £2,500 for each day uninsured.
- Most commercial insurance is placed through brokers, not direct — the direct channel was under 8% of commercial premiums, because tailored risks rarely fit a tick-box engine.
How is a commercial insurance quote actually priced?
There is no single "price of commercial insurance". Every quote is the output of an underwriter (or a pricing model) running your business through a set of rating factors and producing a premium that reflects the insurer's estimate of how likely you are to claim and how much that claim is likely to cost. Understanding those inputs is the difference between feeling at the mercy of the number and being able to influence it.
The headline drivers an underwriter weighs include the nature of your trade, your annual turnover, your wage roll (payroll), the limits and sums insured you choose, your claims history, your location and premises, and the excess you agree to carry. Two businesses in the same sector can receive wildly different quotes because one has a clean five-year record, modern fire protection and accurate valuations, while the other has an open claim, no risk-management evidence and out-of-date sums insured. The premium is a mirror of how the insurer sees your risk — which means a better-presented risk is a cheaper one. Our companion guide on the role of the insurance underwriter goes deeper into how that decision is reached, and the small business insurance prices guide shows typical ranges by trade.
How do the main ways to get a commercial quote compare?
Before you look at price, it is worth understanding where the quote is coming from, because the route shapes how much cover you actually get for the number shown.
| Feature | Direct from insurer | Comparison site | Specialist broker |
|---|---|---|---|
| Tailored to your exact trade | Limited | Tick-box only | Yes |
| Access to Lloyd's & specialist MGAs | No | No | Yes |
| Sums insured / wordings checked for gaps | You self-check | You self-check | Broker checks |
| Help with the duty of fair presentation | No | No | Yes |
| Non-standard or refused risks placed | Often declined | Often declined | Yes |
| Human claims advocacy if you claim | Call centre | None | Yes |
| Speed for a simple, standard risk | Fast | Fast | Fast |
For a genuinely simple, low-value, standard risk, a direct quote can be perfectly adequate. The moment your business has anything non-standard — a mixed trade, sub-contractors, high-value stock, previous claims, unusual premises or specialist equipment — a tick-box engine starts guessing, and the gaps it leaves only surface at claim time. More on choosing a route is in our guide to commercial insurance agencies and brokers.
Should you quote direct, on a comparison site, or through a broker?
The reason most commercial insurance is placed through brokers rather than bought direct is structural, not promotional. Commercial risks are heterogeneous: a café, a groundworks contractor and a software consultancy share almost no risk characteristics, so the questions that produce an accurate quote differ enormously. Direct and comparison channels work by funnelling every business through a narrow, standardised question set, which is why the direct channel accounted for under 8% of commercial insurance — the format simply cannot capture most real businesses.
A broker quote starts from a different place: a conversation about what you actually do, where the exposures sit, and what a claim would really cost you. That produces a quote you can trust, and a wording matched to your trade. For specific product routes you may also want our dedicated guides on professional indemnity, cyber insurance and commercial property cover.
The most frustrating quotes I review are not the expensive ones — they are the suspiciously cheap ones. A client will forward a renewal that has dropped 30% and ask why we cannot match it. When we read the schedule, the saving is never a gift: the building sum insured has been frozen at a figure three years out of date, the business interruption indemnity period has been quietly cut from 24 months to 12, or the trade description has been narrowed so tightly that half of what they actually do is now outside cover. The price fell because the cover fell. Reading the schedule, not the number, is the whole job.
Interactive · Cover Checker
What cover should be on your quote for your type of business?
Pick a business type to see the covers a well-built commercial insurance quote should include — and how each is prioritised. Tags show what is legally required, essential, recommended or worth considering. This is a general guide to spot gaps, not a substitute for advice on your own commercial insurance placement.
Tradesperson / contractor — quote should include
Shop / retailer — quote should include
Office / consultancy — quote should include
Café / hospitality — quote should include
Manufacturer — quote should include
Tech / online business — quote should include
What is the duty of fair presentation when you request a quote?
This is the single most important — and least understood — concept behind any commercial insurance quote. Under the Insurance Act 2015, every business buying non-consumer insurance owes the insurer a duty of fair presentation. In plain terms, when you ask for a quote you must disclose every material circumstance you know or ought to know, in a way that is clear and accessible — not bury it, not assume the insurer will ask. A "material circumstance" is anything that would influence a prudent underwriter's decision to insure you or on what terms.
This is not a formality. The quote an insurer gives you is built entirely on what you tell them. If your presentation is not fair — you forget a previous claim, understate your turnover, omit a side activity, or undervalue your buildings — the insurer gains proportionate remedies. Depending on whether the failure was careless or deliberate/reckless, they can reduce your claim payment proportionately, impose the terms they would have applied, or in the worst case avoid the policy entirely and keep the premium. A clean, accurate presentation is therefore not just good manners — it is what makes the eventual claim payment safe.
The temptation when chasing a cheaper quote is to round turnover down, describe the business narrowly, or leave out the awkward claim. Every one of those shortcuts converts a cheaper premium into a defective policy. The job at quote stage is to present the risk completely and accurately, then reduce the premium through genuine risk improvement — not by hiding the risk.
Why is the cheapest commercial insurance quote often the most dangerous?
A lower number can only ever come from one of three places: the insurer genuinely sees you as a better risk, the insurer is pricing aggressively to win market share, or the cover has been reduced. The first two are fine. The third is where businesses get hurt — and it is by far the most common reason a quote is unusually cheap.
Cover gets stripped in ways that never show up in the price comparison: a higher excess that you only discover at claim time, an indemnity period for business interruption that is too short to rebuild, sums insured frozen at last year's figures while rebuild costs rose, an inner limit that caps a key cover far below the headline, or a trade description so narrow that part of what you do falls outside the policy. None of these is visible if you only read the premium. All of them are visible if you read the schedule.
If two quotes differ by more than about 20–25% on the same risk, they are almost never quoting the same thing. Before choosing, line the schedules up side by side: limits, sums insured, excesses, indemnity periods, key exclusions and the exact business description. Compare cover first, price second. Our guide on business insurance with a claims history shows how a previous claim changes what a fair like-for-like quote looks like.
How does underinsurance and the average clause cut your payout?
Underinsurance is the quiet epidemic of UK commercial insurance. Industry estimates put roughly three-quarters of commercial properties as underinsured — usually not through dishonesty, but because rebuild costs, stock values and turnover all rose while the sums insured on the quote stayed still. The mechanism that punishes this is the average clause.
The average clause lets an insurer reduce a claim in the same proportion that you were underinsured — even on a partial loss well below the sum insured. If your building is insured for £500,000 but should be insured for £1,000,000, you are 50% underinsured, and a £200,000 fire claim can be settled at just £100,000. You carry the rest. And under the Insurance Act 2015, an under-declaration that breaches the duty of fair presentation can give the insurer a proportionate remedy as well as average — so getting the sums insured right on your quote is not optional.
Insure buildings on a professional reinstatement (rebuild) basis, not market value — the two are completely different numbers. Review sums insured at every renewal against current rebuild and replacement costs. Set a realistic business-interruption indemnity period (often 24–36 months, not 12). And declare turnover and wage roll accurately. A correctly valued quote may cost a little more today; it is the difference between a paid claim and a part-paid one.
Interactive · Pre-Acceptance Checklist
What are the red flags to check before you accept a quote?
Tick each item once you have confirmed it on your quote. A red box is an unchecked risk; a green tick means you have verified it. Work through all eight before you sign anything.
- Business description is accurate and complete. Every activity you carry out is named — no narrowing.
- Sums insured reflect current rebuild & replacement costs. Not last year's figures, not market value.
- Liability limits meet your contracts. Check the limit your biggest client or landlord demands.
- The excess is one you can afford. A low premium can hide a high excess on every claim.
- Business interruption indemnity period is realistic. 12 months is rarely enough to fully recover.
- Key exclusions and warranties are understood. Alarm warranties, minimum security, unoccupancy conditions.
- All material facts have been disclosed. Claims, convictions, side activities, previous refusals.
- Inner limits checked against headline limits. A £1m policy may cap a key cover at £25k.
What is actually included in a commercial insurance quote document?
A proper quote is far more than a price. Before you accept, you should be able to find and read each of the following — and if any are missing, that itself is a red flag worth raising.
- The insurer and the broker. Who is carrying the risk, and who is arranging it. Both should be FCA Authorised.
- The business description. The precise wording defining what is covered — read it as if a claims handler were looking for a reason to decline.
- Sections of cover with limits and sums insured. Each cover (property, liability, BI, etc.), its limit, and any inner sub-limits.
- Excesses. The amount you pay on each claim, which can differ by section.
- Conditions and warranties. Things you must do or maintain (security, inspections, occupancy) or cover can be suspended.
- Exclusions. What is specifically not covered.
- Premium breakdown including IPT. The net premium plus Insurance Premium Tax, and any instalment or finance charges.
- Subjectivities. Conditions you must satisfy before cover is confirmed (e.g. providing a risk assessment).
For more on building a complete request, see our guides to a business insurance quote and the commercial general liability quote process.
What information do you need to get an accurate quote?
The accuracy of your quote is capped by the quality of the information behind it. Gathering this before you start saves time and, more importantly, satisfies your duty of fair presentation:
- A full, honest description of every activity the business carries out — including side lines and seasonal work.
- Annual turnover (and a split if you do markedly different things).
- Total wage roll and number of employees, including labour-only sub-contractors.
- Sums insured: buildings on a reinstatement basis, contents/stock/plant at replacement cost.
- Full claims history, usually five years, across all policies.
- Any directors' or business CCJs, insolvencies or previous declinatures — see claims history cover.
- Premises details: construction, age, security, fire protection, occupancy.
- The liability limits your contracts require.
If you are a sole trader, the sole proprietorship insurance guide covers what changes, and the small business insurance guide covers first-time buyers.
Interactive · Insurability Snapshot
How insurable is your business at quote stage?
Choose your situation below for a quick indication of how straightforward your commercial insurance quote is likely to be — and where to focus before you approach the market.
How much of your commercial insurance quote is Insurance Premium Tax?
Every standard commercial insurance quote in the UK carries Insurance Premium Tax (IPT), and most business owners never notice it because it is folded into the headline figure. The standard rate of IPT is 12%, applied to the majority of commercial covers including liability, property and commercial motor. It has climbed steadily from just 2.5% when introduced in 1994, reaching 12% in June 2017, where it has remained through 2026.
The detail that catches businesses out is this: unlike VAT, IPT cannot be reclaimed. It is a true, final cost. On a £2,000 net premium, IPT adds £240, taking the total to £2,240 — and none of that £240 comes back. When you compare two quotes, make sure you are comparing the same basis (both inclusive or both exclusive of IPT), or you can mistake a tax difference for a price difference. A higher-rate of 20% exists but applies mainly to travel cover and supplier-arranged appliance/vehicle insurance, not standard commercial lines.
Why is Employers' Liability a legal line on most quotes?
If your business employs anyone — including casual, part-time and many labour-only sub-contractors — the Employers' Liability (Compulsory Insurance) Act 1969 requires you to hold Employers' Liability (EL) cover with a minimum limit of £5 million (most insurers provide £10 million as standard). It is one of the very few business insurances that is a legal obligation rather than a commercial choice. The Health and Safety Executive enforces it, and trading without valid EL cover can attract a penalty of up to £2,500 for each day you are uninsured, plus a separate fine for failing to display the certificate where required. Any quote for a business with staff that does not show EL is incomplete.
How do warranties and conditions affect whether your quote pays out?
Beyond the price, a commercial quote contains warranties and conditions — promises you make about how the risk will be managed. The Insurance Act 2015 improved the position for policyholders by turning most warranties into suspensive conditions: a breach suspends cover only while the breach continues and only for losses connected to it, rather than voiding the whole policy forever. But the practical lesson is unchanged. If your quote is conditioned on a monitored alarm being set, a particular lock standard, or premises not being left unoccupied beyond a set period, those conditions are part of the deal. Read them at quote stage, confirm you can meet them, and tell your broker if you cannot.
What are the rating factors that drive your commercial insurance quote?
These are the levers an underwriter pulls when building your premium. The third column matters most: almost every factor can be influenced, which is how a well-presented risk earns a lower quote without cutting cover.
| Rating factor | Why it moves the premium | How to mitigate it |
|---|---|---|
| Trade / business activity | Sets the base hazard rate; some trades carry far higher injury or liability frequency. | Describe accurately — never over-broad, never narrowed to hide activity. |
| Annual turnover | Proxy for exposure and potential third-party claims volume. | Declare honestly; split materially different activities so each is rated fairly. |
| Wage roll & staff numbers | Drives Employers' Liability exposure directly. | Keep accurate records; include sub-contractors who count as employees. |
| Claims history | Past frequency and severity predict future losses; open claims weigh heavily. | Provide context, evidence of remedial action, and a clean recent record. |
| Sums insured | Higher values mean higher maximum payouts — but undervaluing triggers average. | Use professional reinstatement valuations; review every renewal. |
| Location / postcode | Reflects crime, flood and subsidence risk in the area. | Invest in security; provide flood-mitigation and historic loss evidence. |
| Premises construction & age | Non-standard construction and older buildings raise fire and escape-of-water risk. | Document upgrades — rewiring, roof, plumbing, fire compartmentation. |
| Fire & security protection | Alarms, sprinklers and good locks reduce frequency and severity. | Install and maintain to insurer standards; keep certificates. |
| Excess level | A higher voluntary excess transfers small-claim cost to you, lowering premium. | Set an excess you can comfortably fund on every claim. |
| Cover limits & extensions | Higher liability limits and added sections increase the insurer's exposure. | Match limits to contracts — adequate, not excessive. |
| Business interruption indemnity period | Longer recovery windows mean more potential loss of income. | Set a realistic period (often 24–36 months) — don't shorten to save premium. |
| Risk management evidence | Documented procedures lower the underwriter's uncertainty. | Supply risk assessments, training records, maintenance logs at quote stage. |
| Adverse credit / CCJs / insolvency | Financial-distress markers can load the premium or restrict markets. | Disclose and explain; use a specialist broker for placement. |
What do real commercial insurance claims teach us about getting the quote right?
Three anonymised but representative claims show how a decision made at quote stage — the sums insured, the disclosure, the indemnity period — determined whether the business got paid in full.
Northgate Hardware — the underinsured fire
An independent hardware retailer renewed online for three years running, accepting a quote that simply rolled the previous building sum insured forward. A faulty extractor caused a fire that gutted the rear of the premises. The building was insured for £420,000; the professional reinstatement assessment after the loss put the true rebuild at £760,000 — leaving the business roughly 45% underinsured.
Halpern Design Studio — the omitted prior claim
A design consultancy moved insurers to save on premium and, in the rush, did not mention a small dispute from two years earlier that had been settled informally. When a new negligent-design allegation arrived, the insurer reviewed the file, found the undisclosed prior circumstance, and treated the presentation as careless under the Insurance Act 2015. Because it would have charged a higher premium and imposed an exclusion had it known, it applied a proportionate remedy.
The Copper Pot Café — the 12-month trap
To shave the premium on a renewal quote, a café reduced its business interruption indemnity period from 24 months to 12. A kitchen fire and a planning dispute meant the rebuild and refit took 19 months. Cover for lost gross profit stopped dead at month 12, while the business still had no income for a further seven months.
How should you handle a commercial insurance claim, step by step?
A quote is a promise; a claim is where the promise is tested. Handling it well protects both your settlement and your future insurability. Follow these eight steps.
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Make the situation safe and prevent further loss
Protect people first, then take reasonable steps to limit ongoing damage. Most policies require you to mitigate — leaving a loss to worsen can reduce your payout.
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Notify your broker or insurer immediately
Report without delay, within any timescales in the policy. Late notification is a common reason claims are reduced or disputed.
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Document everything before you clear up
Photograph and video the damage, list affected items with values, and keep damaged stock or equipment where it is safe to do so for the insurer to inspect.
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Report to the authorities where required
Theft, malicious damage and certain incidents need a police crime reference. Some statutory injuries require reporting to the HSE under RIDDOR.
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Keep a written record and preserve evidence
Log every call, email and visit with dates and names. Retain receipts, contracts, maintenance records and anything supporting the claim's value.
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Cooperate with the loss adjuster
On larger claims an insurer appoints a loss adjuster acting for them. Be honest and helpful — and consider your own loss assessor on complex losses.
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Submit a complete, evidenced claim
Quantify the loss accurately with supporting documents. A well-presented claim is settled faster and challenged less.
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Review cover and sums insured before renewal
After a claim, reassess your values, limits and risk management. Correcting underinsurance now prevents the next claim being reduced too.
John Miller
Director & Principal Broker — Miller & Partner
John has spent 13+ years placing commercial insurance for UK businesses, with direct access to the Lloyd's Market and specialist MGA schemes. A former #1 Account Executive at Brown & Brown and #1 Salesperson at AXA, he spends much of his week doing exactly what this guide describes — reading quote schedules line by line, spotting underinsurance and cover gaps before they become claims, and making sure the number a client accepts is backed by a policy that will actually respond.
Commercial insurance quote glossary
- Premium
- The amount you pay for the policy, before or after Insurance Premium Tax depending on how it is quoted.
- Insurance Premium Tax (IPT)
- A government tax on most general insurance, standard rate 12%, included in the price and — unlike VAT — not reclaimable by a business.
- Sum insured
- The maximum an insurer will pay for an item or section; if set too low, the average clause can reduce claims.
- Reinstatement value
- The full cost to rebuild or replace as new, including fees and debris removal — the correct basis for buildings, not market value.
- Average clause
- A policy term letting the insurer reduce a claim in the same proportion that the property was underinsured.
- Underinsurance
- Insuring for less than the true value at risk; widespread in UK commercial property and a leading cause of reduced payouts.
- Duty of fair presentation
- The legal duty under the Insurance Act 2015 to disclose all material circumstances clearly when buying or varying commercial cover.
- Material circumstance
- Any fact that would influence a prudent underwriter's decision to insure or the terms offered.
- Proportionate remedy
- The insurer's right, on a careless breach of fair presentation, to reduce a claim or apply the terms it would otherwise have set.
- Excess
- The first part of any claim you pay yourself; a higher excess lowers the premium but increases your out-of-pocket cost per claim.
- Limit of indemnity
- The maximum the insurer pays under a liability section, often required at a set level by your contracts.
- Inner limit (sub-limit)
- A cap on a specific cover that sits below the headline limit — easy to miss and a common source of shortfalls.
- Indemnity period
- The maximum time business interruption cover pays for lost income after a loss; too short a period leaves a recovery gap.
- Warranty / condition
- Something you must do or maintain (e.g. set an alarm); under the 2015 Act, breach usually suspends rather than voids cover.
- Subjectivity
- A condition you must satisfy before cover is fully in force, such as supplying a risk assessment after the quote.
Commercial insurance quote — frequently asked questions
How long is a commercial insurance quote valid for?
Most commercial quotes are valid for around 30 days, though this varies by insurer and is stated on the quote. The premium assumes the information you supplied stays accurate; if anything material changes before you accept — a new activity, a claim, a change of premises — you must tell the insurer, as the quote may no longer hold.
Why are my commercial insurance quotes so different from each other?
Large differences usually mean the quotes are not covering the same thing. One may use lower sums insured, higher excesses, a shorter business interruption indemnity period, a narrower business description, or different exclusions. Always compare the schedules — limits, sums insured, excesses and exclusions — rather than just the headline price.
Does asking for a quote affect my future premiums or record?
Requesting a quote does not in itself raise your premiums. However, you must answer honestly, and a previous declinature or claim is a material fact you should disclose. Hiding it to get a cheaper quote risks a far worse outcome at claim time under the duty of fair presentation.
What information do I need to get an accurate commercial quote?
A full description of all your activities, your turnover, wage roll and staff numbers, accurate sums insured (buildings on a reinstatement basis), five years of claims history, any CCJs or insolvencies, premises and security details, and the liability limits your contracts require. The more complete the information, the more accurate and reliable the quote.
Is the cheapest commercial insurance quote a good idea?
Only if the cover behind it matches. A cheaper quote often wins by reducing limits, raising excesses, shortening indemnity periods or narrowing the business description — savings that turn into uninsured losses at claim time. Compare cover first; if a quote is much cheaper for the same cover, that is a genuinely good deal worth confirming.
What is Insurance Premium Tax and is it on my quote?
IPT is a government tax on most general insurance, at a standard rate of 12%, and yes — it is included in nearly all commercial quotes. Unlike VAT, a business cannot reclaim it, so it is a real cost. When comparing quotes, make sure both are on the same basis (inclusive or exclusive of IPT).
What is underinsurance and how do I avoid it on my quote?
Underinsurance is insuring for less than the true value at risk, which lets the average clause cut your payout proportionately. Avoid it by insuring buildings on a professional reinstatement (rebuild) basis, valuing stock and plant at replacement cost, reviewing figures at every renewal, and setting a realistic business interruption indemnity period.
Do I have to tell the insurer everything when I get a quote?
For commercial insurance, yes. The Insurance Act 2015 requires a fair presentation of the risk — disclosing every material circumstance you know or ought to know, clearly. It is not enough to answer only the questions asked. A failure can give the insurer a proportionate remedy that reduces a future claim.
Is Employers' Liability insurance compulsory on my quote?
If you employ anyone — including most labour-only sub-contractors — yes. The Employers' Liability (Compulsory Insurance) Act 1969 requires cover of at least £5 million, and trading without it can mean a penalty of up to £2,500 for every day uninsured. Any quote for a business with staff should include it.
Should I use a broker or get a quote direct?
For a simple, standard, low-value risk, a direct quote may be fine. For anything non-standard — mixed trades, sub-contractors, high-value stock, previous claims or unusual premises — a broker produces a more accurate quote, checks the wording for gaps, accesses specialist markets, and helps you meet the duty of fair presentation. Most commercial insurance is placed through brokers for exactly these reasons.
Can I get a commercial insurance quote if I've been refused or have claims?
Yes. A previous refusal, CCJ or claims history makes a risk non-standard, not uninsurable. Miller & Partner approaches every placement through The Insurability Framework — covering underwriter intelligence, difficult-risk expertise, risk assessment and claims advocacy — and uses specialist Lloyd's and MGA markets to place risks the standard engines decline.
How do I get a fast and accurate commercial insurance quote?
Gather your information first (activities, turnover, wage roll, sums insured, claims history), present it completely, and work with a broker who can match a wording to your trade rather than forcing you through a tick-box. You can start with our quick proposal form and a specialist will build a quote around your real risk.
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