Insurance is one of those costs for small businesses, which, when times get tough is usually the first to go.
Yet not having adequate cover can be the very thing keeping SME owners awake at night.
Mark Searles, CEO of Austbrokers, warned that saving a couple of dollars a day could easily end up costing a fortune in the future.
“Insurance is a prerequisite of any business – trying to save or cut back is a false economy at the end of the day. There’s an overriding need for SMEs to be adequately covered, no matter what your business. If there’s an event like a fire you need to be covered to ensure you can be put back in action and don’t lose your livelihood,” Searles told Dynamic Business.
Business interruption insurance is equally important.
“The level of business interruptions with regards to under-insurance is staggering. In rural areas for example, with bush fire risk, a lot of times the level of under-insurance is to blame for not being covered during business interruption,” Searles said.
Citing recent events such as the Brisbane floods and bush fires in Victoria, Searles said that even risks like cyber liability are included in business interruption insurance. “What happens if someone gets into your server, and starts downloading personal details? It costs nothing to talk to an insurance broker – so talk to someone who understands risk.”
Many SMEs opt for prepackaged insurance solutions, and fall into the ‘set and forget’ mentality. Searles said that this may be fine for reasonably vanilla business with vanilla risks, but disastrous for other businesses with more nuanced risks.