The importance of conducting business insurance risk reviews
Business owners who simply renew their insurance policies when they are due, may miss the opportunity to fully manage their risks. Checking your insurance and paying attention to your sums insured’s, exclusions or the type of cover is an essential part of mitigating risk. Reviewing your policies can highlight new risks or areas where your business is either under or over insured.
As your business and circumstances change over the year, so should your insurance. Change could be new acquisitions, relocation of the business, growth or downsizing as you move online or develop new products or services. Change can also be due to new laws introduced that affects your business or industry. For example, the privacy laws relating to handling and keeping customer data secure. Here are some of the changes that may affect your insurance cover and which should be further discussed with your adviser.
- Acquisition of new equipment: Many businesses buy new equipment throughout the year but overlook considering whether their existing sums insured adequately cover the replacement costs of the existing and new equipment.
- New location: Since not all locations are equal, as far as risk is concerned, moving premises can highlight new risks that your current policies do not adequately cover. That’s because some locations hold greater risks than others, such as asbestos roofing or walls, fire risk, flooding and burglary.
- New products or services: Some insurances (often due to exclusions) may not cover new products or services without the insurer being advised and agreeing to change your insurance, potentially leaving your business uninsured.
Whatever changes have been experienced by your business (for better or worse) since you last renewed your policies, an annual review with your insurance adviser makes good business sense. So what can you expect from this review?
Outcomes of annual insurance reviews
Since your insurance adviser possesses specialised knowledge of insurance risks of your industry, they will be aware of any insurance or legislative changes that may impact your business. Combined with a thorough discussion of your business’ structure, as well as new directions, assets or markets, your adviser will be able to clearly identify your business risks and provide advice.
With this knowledge, your adviser will know whether your current policies provide appropriate cover or whether there are any uninsured risks or areas that are under or over insured. Inclusions and exclusions in all your policies will also be reviewed because some of these changes may alter the terms of your insurance cover or highlight areas where cover is insufficient.
One or more of these changes can significantly affect the type of cover you require as well as the sums insured. They may also require the formulation of risk mitigation strategies to address new developing risks, such as protecting customer data differently, fire detection and management of cyber threats.
Your insurance adviser will also consider the availability of suitable insurance for your business, as well as the cost of these policies and how they can be tailored to suit your specific needs.
So if you have made any recent changes to your operations, products, services or location, purchased new equipment or are concerned about industry or legislative changes, it’s advisable to perform a thorough review of your insurance cover.
To receive valuable insights into your business’ current risk exposure and how you can mitigate these risks, talk to an insurance adviser today.
This article originally appeared on Insurance Advisernet Website 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 Gail Findlay.