An Insurance Council of Australia inquiry into non-insurance in the small to medium sized enterprise sector found was that one of the primary barriers to insuring against identified risks was cost.
But the cost of underinsurance is often far greater than the cost of an insurance premium, and not putting the right cover in place puts your business at risk.
Rather than skip out on insurance because it’s too expensive or ‘not worth it, take some time to research your options and get a better deal on your business insurance with these five strategies suggested by FENCiT’s insurance partner, Gallagher.
Just remember: these are suggestions only. You should always talk to an insurance broker or your insurer before making a decision about your business insurance.
1. Review your cover before renewing your policy
Your business is like a living, breathing thing. It’s constantly changing and growing, which means your risk profile and insurance needs are too.
That’s why, come renewal time, you should take the time to review your insurance policy. Don’t just assume you need the same level of cover as you had last year; you may need less, or you may need more.
Take the time to think about:
- Steps you may have taken to reduce or minimise risks (like installing a new security system, for example);
- whether your property and other assets have grown or decreased in value over the year;
- if you’ve purchased any new machinery, equipment or stock; or
- any new risk exposures that your current policy may not cover.
And that’s just few ideas. Conduct a full review of your risk profile and your insurance policies to ensure you’re spending as much as you need to – no more, no less.
2. Know what you need, and don’t overlook additional coverage options
Conducting a risk assessment and reviewing your existing policies will help you determine your current and future insurance needs. Knowing exactly what you need is essential for getting a good deal on a tailored insurance package.
The type of insurance you need will depend on your industry and your business, but in general you should look at:
- Public and product liability insurance
- Professional indemnity insurance
- Management liability insurance
- Business interruption insurance
- Employment practices liabilities insurance
- Cyber insurance
And even if you have basic cover in place, you need to think about getting additional coverage for your unique risks. Construction companies, for example, may want to consider trade credit insurance, and publicly-listed companies should have directors and officers’ liability insurance.
The bottom line: knowing exactly what your insurance needs are will ensure you’re not paying too much or too little, and will protect your business from insurable losses.
3. Make an informed choice
If your policies are up for renewal, take some time to make sure you’re getting a competitive deal.
There are two ways to do this:
- Ask other providers to quote on your insurance business insurance needs and compare their offerings. ASIC recommends getting at least three quotes to compare your current premium with those of similar policies.
- Do some online desktop research to compare policies. A simple Google search will show you what’s out there; just be aware that the search results may only show a sample of the policies available on the market, not all of them.
The important thing is that you get a good idea of what’s available, what’s competitive and what meets your unique insurance needs.
Always compare policies by reading the relevant product disclosure statement before making a choice and remember, price isn’t everything.
Your main priority should be to get the right type and level of cover for your business. If in doubt, refer to point 5!
4. Ask about insurance packages and discount opportunities
Many insurers offer lower prices for combined policies, or they provide tailored insurance packages that cover a wide range of risks with available add-ons.
You may be able to save on your insurance by ‘bundling’ your policies or purchasing a tailored package.
You could also be eligible for discounts if you’re a member of a professional or industry association. Ask an insurance representative or a broker about what policy combinations and deals are available for your business before making a choice.
5. Get help from an insurance broker
An insurance broker is able to properly assess your risks and negotiate with insurers to get you the best deal.
Using one means you’re:
- not paying for cover you don’t need;
- not paying for expensive overlaps across policies; and
- covered for all your risks and exposures.
Think of your insurance broker as a trusted advisor, like your accountant or your solicitor.
Your broker is there to help you manage your risks, answer your insurance questions and ensure your business is set up for success.
Over 70 per cent of small to medium-size businesses purchase insurance via a broker, so it’s a smart move to make.
As well as business insurance, Gallagher can also assist fencing businesses, their staff and families with personal insurances such as motor, home and contents.
Feel free to contact Gallagher’s Jamie Lansdown directly on 0409 406 844.
A simple review with Gallagher could save you time and money.
This article was first published in The Fence magazine.