As we move towards the end of another financial year, one of the most important things any business can do is to conduct a thorough annual insurance review ahead of renewal.
If you’re a business owner and you’re not religiously doing this each year, you could be opening yourself up for a major headache – and financial loss – in the event of a claim.
Your annual insurance review should look to establish the following:
Do I have the right insurance for my business?
It sounds obvious, but you’d be surprised how many businesses – particularly smaller ones – purchase ‘off-the-shelf’ insurance products without being sure whether they really cover the unique risks faced by their business. For the record, the ‘right’ insurance for your business won’t be the cheapest cover you can find online. Inevitably, you need advice to make the right choice.
Will my insurance cover me if something goes wrong?
We’ve written about the importance of business interruption insurance before, but ahead of any insurance review we urge business owners to consider making sure they have policies in place to protect themselves from loss of profit that can be caused by circumstances outside their control. Such circumstances can include fire, natural disasters or a key supply chain being cut.
Have I valued my assets correctly for insurance purposes?
Underinsurance (i.e. insuring your assets for less than their replacement value) is rife in Australia and can result in business owners being considerably out of pocket in the event of a loss. It’s important to have regular valuations of your equipment, machinery, stock and other assets to ensure you’re in a position to replace them – and get back on with business – as easily as possible. You can read more about underinsurance here.
Have my business circumstances changed since my last insurance renewal?
If you have added a new line of business since your last insurance renewal; or have differing or more valuable stock, you must factor this into your insurance. It’s a legal requirement for an individual to disclose anything that they know to be relevant to the insurer’s decision to accept the risk. Not doing so could render your policy invalid in the event of a claim.
If you follow these steps, you’re very likely to be in a strong position to recover should your business suffer a setback. You might pay a bit more on your premium, but in the event of a claim you’ll be glad you did.
Annual insurance reviews, asset valuation and business interruption analysis are among the many services we offer clients. If we can be of assistance in making sure your business has the right insurance cover when you renew, contact us today on 02 9796 0400.
