Why You Should Disclose Business Activities for Insurance
When the unexpected or expected happens, you can take great comfort in knowing your insurance company has your back. However, suppose you’ve failed to disclose business activities or neglected to update your policy details. In that case, it can leave your business open to significant financial losses, whether you win or lose.
So, here are 5 reasons why you should disclose business activities.
1 – To ensure you’re covered
Just because you have an insurance policy for your business, it does not mean your policy automatically covers you for everything. So, a ‘she’ll be right’ attitude can have a significant financial impact that can delay or prevent you from achieving long-term business growth.
2 – Disclosure of business activities is a wise investment
Insurance is only as good as the information you provide. So, the more business activities you withhold to save money, the riskier your business future becomes.
While the cost of premiums can seem expensive, they are small compared to the cost of any legal defence fees and financial penalties you may incur.
In today’s litigious environment, no business relationship is free of risk. You may encounter unforeseen problems with employees, suppliers, investors, competitors, customers, government agencies, regulators, and creditors.
3 – To build an accurate risk profile
Your insurer will build a risk profile for your business based on the information you provide. A risk profile considers your industry, occupation, location, how long you’ve been in business, claims history and more.
The information determines how they rate your business for insurance purposes. It determines whether they can underwrite the risk and calculate an accurate premium to protect your business interests.
4 – To meet your duty of disclosure
All insurance policies have a Duty of Disclosure in the contract. Suppose you fail to disclose business activities to your insurer. In that case, they are within their rights to refuse to provide cover when it comes to claiming time.
When you accurately disclose all business activities and keep your insurer up to date, your insurer can underwrite your business risks accurately. It puts you in a stronger position at claim time.
5 – It’s a legally binding contract
Business owners must acknowledge that an insurance policy is a legally binding contract. Therefore, you should treat your insurance policy like any other legal contract.
Always ensure you understand all the terms and conditions of your policy. An experienced risk and insurance adviser can help you understand your policy, its limits, and exclusions.
It’s essential to check that the policy meets your business needs and risk profile.
Need advice on the disclosure of business activities?
Risk and insurance advisers, such as Clear Insurance, use their extensive knowledge of your industry to help you build a risk profile for your business.
They guide you through the different types of business risk and assess the level of risk your business can financially support.
The picture your adviser builds enables you to make a confident purchase at renewal time, giving you complete peace of mind.
To start your risk discovery journey, contact us today.
This article originally appeared on Why You Should Disclose Business Activities for Insurance and has been published here with permission.
Advisr does not provide advice and does not hold a financial service license (AFSL). All information above has been provided by Clear Insurance.