Many business owners are starting to think about the coming end of financial year on 30 June.
Even if 30 June is not the end of financial year for your business, a large number of business owners renew their insurance on 30 June. This is the busiest time of the year for commercial insurance.
There are three key things to review when end of financial year and insurance renewal time approaches.
- Firstly, do I have the right insurance cover for the business I am operating?
- Secondly, do I have enough insurance cover to protect me if something goes wrong? Will I be able to recover and get back on my feet in the shortest possible time?
- Thirdly, has anything changed since the last insurance renewal? Have you added a new line of business that was not there last year? Has the nature and level of your stock changed? Do you have valuable new equipment, tools, or other assets that need to be fully insured?
You should speak with your LEA insurance broker about these matters, and this should happen well before the renewal process gets under way.
An important reason for getting advice about these matters is the fact that an insurance company will rely on the information you provide to it to determine the premium they believe they need to charge.
In addition, the law requires you to disclose anything that is relevant to the risk being insured that you are aware of and that may be relevant to the insurance company’s assessment and pricing of the risk.
If nothing happens, there will be a sigh of relief and comfort all round. But if something does happen, the first thing the insurance company will do is check whether the loss is adequately and properly insured under the policy.
If there are risks on the property that the insurance company was not aware of, or if the insurance cover is not adequate to cover the loss that has happened, your claim could be denied – and your ability to stay in business could be severely compromised.
The other thing to talk to your LEA insurance broker about at this time is business interruption insurance. We believe only 25% of businesses have any form of business interruption insurance, and that is a real worry. There are a wide range of factors that might prevent the successful restoration of your business after some form of loss. Some of these include:
- Do you own your premises or lease them? If you lease your premises, what is your landlord likely to do in the case of a major fire? How quickly will they repair the premises?
- Do you have key stock that might be lost? Is it easily replaced or will it take some time?
- Do you have key machines that might not be easily replaced?
- Do you have a key supplier or a key customer? Will you be able to maintain a successful business with these people if something goes wrong?
- How would you meet your financial commitments if you were not able to generate income for 2 weeks or 2 months?
- You might be able to get back into business quickly, but some of your costs might be higher as a result of the fire or loss. Would your business cope with this?
Rather than facing disappointment, and possible heartbreak, after the event, now might be the time to talk to your LEA insurance broker and do an “insurance health check” so they can make sure you have the cover you need to stay in business even if something goes wrong.
If you aren't currently a member of the Lea Insurance Brokers group, and you need to find a broker to help with your insurance, look no further! Call (07) 5538 8988 today.
Content cited from needabroker.com.au