Operating conditions have dramatically changed this year forcing business owners to re-evaluate just about everything they do, so it's easy to overlook the 'basics,' which includes business insurances.
We know the risks of 'assuming' coverage and how devastating this can be when we get it wrong, so it's worthwhile spending a little bit of time re-assessing your coverage's and how current and future needs may impact on this.
IME (Insurance Made Easy) National Manager, Philip Watson, has prepared a guide that summaries the main types of business insurances and what policies generally cover.
He says the guide will make it easier for business owners to focus on how new operating conditions may affect the types of polices, coverage and sums insured.
This is a policy that covers the financial cost of replacing or repairing damage to the physical structure of the business property you own in the event of a disaster such as a fire. Damage areas can include the roof, floors, and walls, as well as any fitted or permanent fixtures.
If you own the building you occupy for your business, make sure that it is insured for the correct value in case a disaster requires a rebuild.
Coverage should include the value of the premises contents such as stock, and what you would need to replace in case of a catastrophic event like a fire, water damage, explosion, impact or accidental damage.
"Given the disruptions occurring to businesses in 2020, you should check that the value of
your stock and their volumes are up-to-date with the insurance cover you have in place," Philip said.
"Some businesses this year, have a lower turn-over due to falling stock volumes, which means their insurance policy may require adjustment."
Business Interruption Insurance - sometimes referred to as loss of gross profits cover -
provides cover for the loss of income and the additional increased costs of working during a major disruption to your business. Causes can include physical loss or damage caused by a fire or a natural disaster.
Philip advises checking to ensure that if you have this insurance, the sums insured are in line with any adjustments to your turnover.
"Also talk with your Insurance broker to make sure you understand how the loss of gross profits would be calculated for your business in the event of a loss. Some insurers can calculate this in different ways," he said.
This covers theft or attempted theft by any person who forcibly and violently enters or
attempts to enter the premises. It includes anyone unlawfully concealed at the premises, or who threatens or commits physical violence to you, your employees or other people. Also covered is theft or attempted theft by an armed hold-up at the premises, break-in to any locked cabinet and/or counter or showcase.
"As the economy falls on hard times, crime rates increase, so check to make sure you have this cover to protect you in case this happens to you," Philip said.
Check to see if you have adequate cover in place for the money kept on the premises or in transit. Money Insurance covers your business’s money on your premises, in a safe or strong room, in transit to or from your premises, in your personal custody, or in the custody of a trusted employee.
Increased crime rates increase the risk of money being taken.
Glass breakage at your business premises, (including internal glass, glass partitions, or external windows), is covered under this policy.
Cover can include destruction of stock or contents caused by broken glass, signs made of glass or plastic, which forms part of an illuminated sign. It may also include the cost of temporary shuttering needed to secure otherwise exposed stock or contents pending the replacement of the broken glass.
The costs of replacing sign-writing, ornamentation, reflective materials and burglar alarm tapes and connections attached to the broken glass may be included. Repairs or replacement of damaged window, door or showcase frames and their fittings, tiles on shop and office fronts and around the broken glass should also be covered.
Glass damage to external glass maliciously damaged may also be covered. If you lease the premises, check your Lease contract with your landlord to better understand requirements that may apply for insuring glass on the premises.
Public & Products Liability Insurance
This covers your legal liability for personal injury to another person (except employees). It covers damage to property owned or controlled by someone else; and advertising liability caused or arising out of an incident or connected with your products.
General Property Insurance
Loss or damage to portable or valuable business property such as tools, laptop computers, or a personal digital assistant you carry are covered anywhere in Australia or any other country.
In the changed working environment this year, you may have employees working from home and taking equipment home with them that may not have insurance coverage away from the business premises. You should check this.
Machinery breakdown & Electronic Breakdown Insurance
This covers the breakdown of business machinery and electronic equipment at the premises. Included may be items such as air conditioning units, computers, and electronic equipment such as photocopiers and fax machines.
The cost of restoring your business’s computer records following a computer breakdown; increased costs of working (such as hiring alternative computers and additional staff), may also be covered.
This form of insurance may also cover the costs of replacing refrigerated stock if the fridge or freezer breaks down.
Goods in Transit
Goods that your business buys, sells or uses which are damaged in transit are covered in this policy.
Pandemic affected business conditions may see you adjusting the volume of stock in transit by
sea, air, rail or road - so it's a good time to match what you have in transit with what
you have insured.
If you don't have this type of insurance and believe your stock is insured up to its arrival at your premises, check with your third parties to ensure you are not exposed or at risk if stock is damaged or destroyed in transit.
Tax Audit Insurance
This covers professional fees you may liable for should an audit or investigation of your business’s financial or tax affairs occur via an authority such as the Australian Taxation Office or Workers Compensation authority.
Need more information?
Contact National Manager Philip Watson on 0423 791 368.
(Philip Watson is a contributing member of the Local Area Marketing & Networking Group)