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E-mail: Rycroft Associates
WholeturnoverWith a wholeturnover policy, the insurer expects you to declare and pay premiums on the whole of your turnover (except for cash, government, intercompany transactions and VAT). This provides the underwriter with a spread of risk rather than the policyholder cherry picking the bad payers - although policies can be tailored to some degree and one insurer will allow you to buy a slice of cover and generally put what debtors you want into the pot.
If you have lots of small accounts or you decide to take a higher first loss, then the insurer should take this into account when calculating premiums (always make sure your broker or insurer representative analyses your monthly debtors listing to make sure that the smaller level accounts are taken into account - some don't and therefore you pay higher premiums. Any broker worth his salt will always ask for a debtor analysis and will break the balances down into bands to see if or how much turnover can be excluded (it isn't actually excluded but it should be taken into any premium calculation) and to see where your risk lies and if in fact you need a wholeturover policy or whether you would benefit from a different structure, for instance: a Catastrophe policy or a Datum Line policy.