If a claim is successful, how much will be paid?

There are three main deductions you might see when claiming on a policy bought through Superscript:

• Excess
• Value Added Tax (VAT)
• Wear and tear

The excess is the amount you agreed to cover when you took out your policy. It’s pre-set and kicks in when you make a claim. Most policies have a compulsory excess, which will be due on every claim you make.

Most insurers will give you two options when it comes to excess. You could either have the excess deducted from the total settlement you’re due or pay the excess directly to the insurer

In some cases, like a third-party property damage claim, you may not get a choice when it comes to your excess. It may be necessary to pay your excess to your insurers as it will enable them to make a full payment to the affected third-party for any damage which has been caused. Alternatively, insurers might suggest you pay this excess directly to the affected party.

Your excess will only be due once for each claim you make. So if, for example, you make a successful claim after your business suffers a break-in and then discover more items have been taken later down the line, you won’t need to pay more excess as the other stolen goods would be linked to the original claim.

One of the questions you’ll be commonly asked is whether or not your business is VAT registered. If your business earns less than £90,000 a year, you don’t have to register for VAT. That said, some companies choose to register anyway to take advantage of certain benefits, like reclaiming VAT on business expenses.

If your business doesn’t pay VAT, then a valid claim would be paid in full by your insurer, minus any excess due.

If you are VAT registered, then a valid claim would be paid net of VAT. "Net" in this context means minus the VAT. That's because your business can claim the VAT element of your insurance claim from HMRC on your next VAT return.

Wear and tear is a term for those common things that happen to products over time — scratches, dings and dents. It can also refer to property — thinning carpets, stains and scuff marks. Wear and tear is not usually covered by insurance policies.

If you are covered for wear and tear, certain insurers can deduct a sum from valid claims for wear and tear. If your policy documents mention payments being made on “an indemnity basis”, then this is what that means.

This means that under the terms of your policy, your insurers will reimburse you for the cost of the replacement or repair to, your equipment to a condition as good as, but not better than, its condition at the time of your claim.

In these circumstances, insurers will make a deduction from any settlement due based on the age of the items being claimed for. The older the item, the less will be due back to you.

Not all policies make this deduction and some insurers may pay for damaged equipment on a reinstatement basis. This means your settlement — if valid — will be paid based on the current recommended retail price (RRP) of the equipment in question.

Read more about this in our guide to wear and tear.

So, now to answer the question about how much you’ll receive for your successful claim?

Keeping in mind the above, the total settlement due on your claim will be the total value of the claim minus your excess, minus VAT (if you’re VAT registered) and minus any applicable deduction for wear and tear.

At Superscript, we take claims seriously, and as such, we have an in-house team of experts on hand to support you — even if you don’t know whether you should make a claim.

Learn more about our claims process on our make a claim page.