So you have started your business and covered all your bases by getting insurance. Business is booming…or just ticking along in this current climate…and your yearly insurance renewal is about to fall due.
Here’s 5 mistakes you may be making with regard to your business insurance program.
1. Not regularly reviewing your insurance policies
By regularly reviewing your policy (not just once per year) you can make sure that you are keeping up with the sums and items you need insurance for. What you have as insurance for at the start of the year can significantly change by the end of the year and in between. Keeping your insurance broker up to date as changes happen is the key, allowing your insurance adviser to make the appropriate changes to your insurance program to ensure you always have the correct coverage. Without such, there is no way to ensure that you would be covered in the event of a claim.
2. Not getting advice from your broker when deciding to enter a different market
A new market can mean importing products from overseas to sell in Australia, selling online within Australia or overseas, or exporting to international markets. For example, importing products into Australia can have liability issues where the importer can be deemed the manufacturer so any property damage, physical injury, or death, as a result of the use of your product, you can be held liable for. Many retailers and online distributors assume buying a product from overseas is no different to buying and selling one from Australia, however this is not the case.
3. Under-insurance & Inadequate Business Interruption Insurance
Businesses in Australia are under-insured. Various reports suggest that up to 65% of small businesses do not have business interruption or loss of profits insurance. Figures also suggest 80% of businesses do not have machinery breakdown cover – 76% do not have computer or electronic equipment breakdown insurance – 33% do not have burglary cover, and 16% do not even have fire insurance. Oh dear!
4. Reducing premiums when times are tough
Some businesses may think it is a good idea to reduce the insurance expenses during a rough patch. A better solution may well be to increase your sums insured if discounts are offered, or to take advantage of broker knowledge in regards to transfer renewals.
5. Being your own insurance broker
Whilst using a search engine to find out about insurance protection can be great to get some background knowledge or see what is out there, Google will not tell you the implications of your insurance choices and provide you with the personal, detailed, and professional services of a broker. You may end up with a cheap deal, but possibly very under-insured and struggle in the event of an insured (or not insured) event. An insurance broker will make sure that the business is covered for its specific needs.
It is important to make sure that you seek professional advice when dealing with such important financial aspects of your business. A broker will understand how important your business is to you, will have experience from dealing with businesses in your industry, can inspect your business for risks, and provide you with options of cover that will cover it for potential events.