You insure your home and your contents, your car, health and maybe even your pet’s health!
So, if you’re a business owner, you know the importance of suitable business insurance, too.
Or do you? Did you know up to 62% of small to medium businesses admit that they’re unlikely to have the right insurance in place to adequately, let alone fully, protect their business?
Today, a team of Gold Coast insurance brokers will discuss the risks of underinsuring your business.
Think this may involve you? Read more from Crest Insurance to find out more.
Not sure if you’re running the risk of underinsurance?
There are many factors that could have led to underinsuring your business. But don’t worry, knowing the factors will give you a better understanding of what went wrong, and what you can do to ensure adequate cover.
Here’s what the problem(s) might be:
- Your own self-assessment is off track,
- You’re insuring for the price paid rather than real-time value in today’s market,
- An over-the-phone or online valuation was given for assets that require on-site valuation,
- The list of contents haven’t been updated,
- The valuation was provided by an architect, bank, builder or real estate agent and not a professional valuer,
- You used the price to lower the insurance premium amount, and
- You’re banking on the assumption that replacement or reinstatement costs will cover everything under the sun such as new building codes, debris removal and/or post disaster re-construction.
The risks associated with underinsuring your business
A good rule of thumb to follow is insuring your business items for at least 80% of their value. It’s what most insurance policies recommend.
However, the Insurance Council of Australia suggests more, as in 90% of their value or more to cover the loss and/or property rebuilding costs.
So, what are the risks of underinsuring?
- Claims not being paid out in full, with your business having to ‘bridge the gap,’
- If there’s a mortgage on your business premises, the bank may claim the insurance payments to pay for it,
- Long delays will amount due to insurance claim processing and payment, especially if there’s any inaccuracies in calculations,
- The percentage in which your business underinsures will most likely be the percentage less the insurer will pay, and finally
- Your business may very well see far less cash flow than it would need to operate, which could lead to a sad, unexpected (but preventable) business closure.
In the unfortunate, but all too real possibility of a business claim, how much will your business be out of pocket with the coverage you have now?
As a business owner, you need to manage your risks adequately; and a big part of that is having sound insurance cover in place.
Business insurance to ensure peace of mind
Underinsuring could be a major risk factor to your business.
It’s never been more important to get the right advice moving forward with your business because you never know what’s around the corner.
Crest Insurance are a dedicated team of Gold Coast insurance brokers, ready, willing and experienced to assist with business, personal, medical indemnity insurance and more.
Ready to review your business insurance policy?
Contact Crest Insurance today to find the best insurance products for your business needs.
Disclaimer: The information contained in this news post is general in nature and is intended to provide a general summary only and should not be relied on as a substitute for professional advice.