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Balancing risks and insurance costs for your business

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One of the most fundamental priorities for any business owner is balancing their risks against the insurance costs to cover them. In other words, is the benefit of insurance worth the price of the premiums?

This is a question that many business owners are struggling with because, quite frankly, the cost of many insurance policies has risen quite remarkedly over the past few years. It all comes down to balancing costs and risks as business owners are faced with both increased premiums and increased risks.

Balancing risks and insurance costs

Unfortunately, the result of these two competing forces can be underinsurance. Essentially, business owners believe their risks are low enough that they don’t need to spend money on insurance premiums.

These risks come from many directions and over the past few years have included bushfires, floods and cyber-attacks. Of course, COVID has also impacted the viability and operations of many SMEs with lockdowns, border closures, loss of supply lines and so on.

So what’s the answer? When you consider the massive costs of underinsurance with the costs of insurance for your business, it makes sense to tip the balance in your favour. Yes, insurance costs are rising but what if the worst happens? What if you can no longer trade or your company is faced with personal injury claims? Insurance is the safety net that can save you hundreds of thousands of dollars, even protecting your company against foreclosure.

What’s the best insurance for your business?

It is always best to consult an insurance adviser when it comes to choosing the right insurance for your business. They are educated and experienced to identify and inform you on the risks your business will face and then provide you the options and costs to cover against these risks. What you do and where you perform your activities are critical criteria in assessing insurance costs, also is the amount of risk you are prepared to hold onto should a risk eventuate. All these elements contribute to your cost of insurance, and it is wise to approach a professional in this area to assist you making these important decisions.

Balancing costs and risks and deciding on the best insurance for your business can be stressful and time-consuming. So why not talk to an insurance specialist today and start balancing the risks in your favour? Find your local Insurance Advisernet adviser today.

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.