Buying business insurance through a qualified adviser, rather than organising it yourself directly through the insurer, could be the difference between survival or closure in the face of a disaster for over two million small to medium sized companies currently operating across the nation.
The insurance needs of all small to medium sized enterprises are far more complex than for individuals. Inadequate insurance coverage is the biggest shortfall for most small businesses that simply won’t get back on their feet after a disaster.
Why engage an expert for DIY
Few business owners would dream of doing their own tax or presuming themselves to be experts on the finer points of contract law. So why risk a do-it-yourself insurance assessment?
Engaging a specialist insurance adviser is one of the best ways protect a business from costly shortfalls in insurance cover or a forced closure, if the business is hit by a sudden disaster such as a flood, fire, on-site accident or even a drawn out legal dispute.
Experienced and qualified insurance advisers can help businesses take the burden out of insurance by:
- Saving you money: Providing access to competitive rates of cover on a range of insurances from multiple insurance companies both globally and locally to create cost efficiencies
- Saving you time: Regularly assessing your business’s insurance needs as it grows and changes to ensure it is efficient and effective
What coverage does my business really need?
Organising insurance is often viewed as a burden for many business operators who are quite rightly focused on running their business day to day. However, an insurance adviser is your friend when it comes to getting this properly organised for you.
Most commonly, SMEs need insurance that covers:
- damage to property caused by major events such as fire, business interruption, theft and public liability;
- machinery breakdown;
- compulsory workers’ compensation; and
- key person insurance which relates to the death or disability of an important employee.
It won’t happen to me
While property insurance maypay the cost of rebuilding your premises and replacing your contents following a catastrophe, what if there’s no income coming in? It is after a setback that business owners have to ask themselves will their enterprise have enough cashflow to pay its loans, leases, wages and the like while you rebuild? That is where seeking an adviser’s risk advice up front is like gold.
Take for example the case of a NSW caravan park whose majority of income was generated during the Christmas holiday period. Their existing policy had a 12 month indemnity period but because the business was in an area prone to bush fire and the business was quite seasonal, the indemnity period needed to be longer to help the business recover if there was a loss.
By arranging his own coverage, the owner was unaware that the indemnity period should be extended to at least three years in order for their income to return to levels comparable to those prior to the fire. This is the time needed to rebuild the accommodation facilities and attract back their clients.
If the worst happens, minimising the length of time a complex claim process takes will be critical, so you can settle the claim sooner and get back to business again. With a solid business interruption policy in place, the holiday park would also have been covered for loss of income while the facilities were being rebuilt and levels of trade re-established.
If you are not very liquid, being inadequately insured or an extra few months in a claims process can spell the end of your business forever. So why even take that risk?
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C&M Douglas Holdings Pty Ltd (ABN 66 079 100 164, Authorised Representative No 286134) are appointed as authorised representatives of Marsh Pty Ltd (ABN 86 004 651 512, AFSL 238983). The information contained in this article provides only a general overview of subjects covered, is not intended to be taken as advice regarding any individual situation and should not be relied upon as such. Insureds should consult their insurance and legal advisors regarding specific coverage issues. All insurance coverage is subject to the terms, conditions, and exclusions of the applicable individual policies.