Search for insurance help

5 Reasons You Should Review Your Business Insurance Policies

Business Insurance Professional Indemnity Insurance Small Business Insurance Liability Insurance Professional Services Insurance Retail and Consumer Insurance Professional Services for Trades Insurance

Do you renew your business insurance or do you review your business insurance? There might be a fine distinction here but one of these strategies may leave you out of pocket whilst the other can get you ahead of the game.

This brings us to the renewal vs review debate because your decision can have a significant effect on the financial security for you and your business. We’ll move on to the reasons why this is so shortly, but it’s worth mentioning that renewing and not reviewing can result in the business being business owners being underinsured.

Underinsurance can be due to a variety of reasons, one of particular importance in the current economic climate is rising inflation as this affects the replacement cost of machinery and equipment. Another reason can simply be that just paying the renewal bill when it arrives is an easy option due to work or time pressures. However, not reviewing your needs, objectives, risks and financial situation annually, is likely to lead to a lack of correct cover or under-insurance

When to review your business insurance

Whilst it’s important to review your business insurance program and the risks and financial situation on an annual basis, there are at least five circumstances when you should contact your insurance adviser and review your coverage immediately. These changes need to be advised to your insurer, to ensure that cover remains in place or the correct additional insurance is purchased.

1. Changes to your business model

The recent pandemic has caused many businesses to change their business model. This can include, for example, employees working from home, modifications to supply chains, alterations to marketing practices or the storage of inventories. Changes to your business model, however, can have a significant impact on your risk profile, needs, financial situation or objectives and subsequently, the type and amount of insurance cover, sums insured and excesses.

2. Changes to your services or products

Adding new products or services will need to be advised to your insurers, to make sure that the cover remains in place and is also still appropriate. For example, some products that are installed in aircraft or used in underground mines may not be included in your Product Liability Insurance whilst some services that are different to what you have previously provided are unlikely to be included in your Professional Indemnity Insurance. Regularly reviewing your business operations and products or services supplied with your insurance adviser, will help to ensure that your major financial risks are either managed or insured, minimising your risks and exposures.

3. Changes to staff

Increasing your staffing levels or hiring new staff or contractors will affect your insurance coverage. That’s because these changes can alter your business risk which in turn, need to be discussed with your insurance adviser. They can tell you whether the risks have changed, also if your insurance policy needs to be updated, or if the policy is wide enough to include any changes planned. Talking to your insurance adviser about changes your planning will ensure that any final decision you make includes risk and insurance input from a specialist.

Management Liability Insurance

Management Liability insurance is designed to provide protection to both the business and its directors or officers for claims of wrongful acts in the management of the business.

Details Get Quote

Business Insurance

A business insurance pack can provide cover for your business premises and contents, against loss, damage, theft or financial loss from an insured interruption to the business.

Details Get Quote

Business Package

Purchase up to six products under one Business Insurance Package.

Details Get a quote!

4. Changes to your revenue or turnover

Your business insurance policies are based on many risk factors, one of which is the turnover or revenue of your business Large changes in revenue or turnover usually reflect a change in the business, new staff, operations, products or services. So, it’s important to let your insurance adviser know of these types of changes, to ensure that your cover is up-to-date and still suitable for your business.

5. Changes to your location or premises

All business insurance policies are based on location, postcode, flood potential if there is asbestos, construction, security and the size of your premises. So, it’s essential that planning to purchase or move to new premises is discussed with your insurance adviser. They can provide costs for the new premises and if there are any special conditions or exclusions that you may need to consider, like excluding flood or damage to an asbestos roof.

To ensure your cover remains in force and is adequate, or alternatively in you need a different policy, keep in contact with your insurance adviser, at least once a year. A review is also important when you make significant changes to your business, as mentioned above. Find your local Insurance Advisernet adviser to help you with your insurance policy review and protect yourself and your business.

General Advice Warning: This advice is general and does not take into account your objectives, financial situation or needs. You should consider whether the advice is appropriate for you and your personal circumstances. Before you make any decision about whether to acquire a certain product, you should obtain and read the relevant product disclosure statement.

All information above has been provided by the author.

Insurance Advisernet, ABN 15 003 886 687, AFSL 240549

This article originally appeared on Insurance Advisernet News and has been published here with permission.