Common mistakes businesses make when it comes to insurance

By Gail Findlay    May 2, 2019

Considering your business insurance options? Don’t make these common insurance mistakes!

With business insurance readily available online, many businesses take matters into their own hands when selecting what policies to purchase, without first acquiring professional advice.

Below are four common mistakes that business owners frequently make, leading to increased risks and potentially significant uninsured losses for their business.

1. Underinsurance 

In order to receive the amount of insurance cover you need, you must provide an accurate estimate for the value of your assets, stock, materials, equipment, machinery, etc. If the worst happens and your building burns down with all your belongings inside, you must have the right declared values, limits and coverage so that your business can get back on its feet again quickly.  Accurate estimates are the key to a fast recovery from a disaster.

2. Incorrect business descriptions

If you complete an online quote directly through an Insurer, the tick-box options for your business activities can be too generic for your specific requirements. It is important to ensure the one you select accurately covers all your business activities. For example, you may be an Accountant providing a small amount of Mortgage broking. If a claim were to arise this could cause reduced or refused settlement.

3. Focusing on low premiums/ high excess 

Searching for the cheapest premium with a high excess might seem like a good idea, but when it is time to make a claim, it can cost you your business. You should always take into consideration the type and level of cover offered in a policy and by each insurer and not focus on a low premium.  

4. Not keeping your provider updated

If you buy or sell assets, even change your business address, any of these changes can void your insurance policies, if you don’t inform your provider. To ensure that you always have the cover you need to minimise your business risks, you must inform your provider of changes. If you are not sure which changes they need to know – a quick phone call will clarify the issue for you. 

It’s no fun when you make a claim and find that your claim has been voided – simply because you forgot to update your address with your provider.

To decide which type of policies and actions are suitable for your business, talk to me today.

Contact Gail.

General Advice Warning

The information provided is to be regarded as general advice. Whilst we may have collected risk information, your personal objectives, needs or financial situations were not taken into account when preparing this information. We recommend that you consider the suitability of this general advice, in respect of your objectives, financial situation and needs before acting on it. You should obtain and consider the relevant product disclosure statement before making any decision to purchase this financial product.

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