5 tips to optimise your business insurance at the end of FY
1. Review any growth or contractions in your business - has your turnover changed?
New customers come, new products and service lines are developed and market trends change. As your business grows or contracts, your revenue and turnover can change too. Review your insurance to make sure that any agreed valuations are aligned with your current performance. You don’t want to be over or underinsured.
Also, as you head into the end of the financial year, planning your cash flow can help your business to manage its levels of profitability and associated tax liabilities.
“QBE reports that up to 68% of SMEs are underinsured”
What is underinsurance: having insufficient insurance to cover the entire value of your business, or business assets or inventory in the event of a claim.
2. Do a stocktake of the volume and value of your inventory being held and the strength of your supply chains
Do you hold inventory? The end of Financial Year is a great time to conduct a stocktake of your inventory and review its condition. Is there inventory that you need to write off? Has any stock been damaged or stolen? Checking your inventory levels is good practice and may lead to an insurance claim.
Also, the end of the Financial year can be a good time to check your suppliers to ensure you are getting good deals and good terms of trade. Are your suppliers able to offer increased payment terms, reductions in cost for consistent purchasing or volume discounts for longer-term commitments. In addition, consider if any new suppliers have entered the market that might be able to offer more competitive terms.
3. Consider your terms of trade with customers - are there invoices at risk?
What about your customers? Are there any customers operating on terms of trade where your invoices may be at risk of default? Have clients been stretching your payment terms and utilising late payment practices to fund or cash flow their own operations? Clients’ businesses, like your business, can change. So staying across any changes in your clients’ businesses can assist your business.
Trade credit insurance: you can insure your trade credit liabilities to cover defaults or delayed payments from customers.
4. Cybersecurity processes - when did you last review them?
How has technology changed in your business over the last 12 months?
Are there new systems and software you are using to drive your operations? Has “everything” moved to the cloud? Do you have new hardware and tools that operate in critical parts of your business?
As your technology changes, so do the cybersecurity risks that come along with them. If you have cybersecurity processes in place, then consider refreshing them to be more aligned with your current business practices. If you don’t have cybersecurity processes in place, then consider establishing them.
Cyber Security Insurance: Does your standard Business Interruption cyber coverage provide sufficient coverage or should you consider a stand-alone cybersecurity insurance policy.
5. Reflect on the year that was - did you launch any new business processes or change your equipment for any reason?
What other changes have you made in your business around business process or equipment over the last year?
Has your business adopted new business processes and do these changes bring with them new risks or areas of potential exposure that you have not considered previously?
What about your equipment? This might include tools, specialty plant and equipment or commercial vehicles. If you’ve made any purchases be sure to check that you’ve added coverage for them to your insurance policies and removed coverage for equipment you no longer own. Did you buy new equipment after decommissioning old equipment? Perhaps you’ve reduced your risk in the process due to safer equipment.
Be sure to talk with your insurance broker about any repairs made and any adaptations or custom modifications to any equipment or vehicles. All are relevant to your insurance.
The end of financial year is a great time to take a moment to consider what has changed in your business and make sure you check these changes with an insurance broker. At Urban Insurance we are happy to help assess the year that has been and how to put your best foot forward for your business into the new financial year.