Business owners across Australia are busy preparing for the EOFY. We know that at this time of year, your to-do list is exhaustive, and renewing your insurance probably isn’t at the front of your mind.
However, as many small business owners take out insurance at the start of the financial year, their renewal dates are quickly approaching. At such a busy time, it can seem easier to automatically renew your existing insurance policy, but this may not be in the best interest of your business. When you renew your insurance, it’s important to review your business and how it has changed in the last year, as you may be exposed to new risks.
If your business has made any of the following changes in the current financial year, it’s vital that you review your insurance before renewing this EOFY.
1. You Have New Premises
If you are leasing new premises, you should take a look at your contract to determine the insurance cover that you may need. Depending on your lease you may have certain items that have to be covered such as glass or air conditioning. Furthermore, relocating may mean that your business has greater risk exposure than it had previously.
2. You’ve Started Using Subcontractors
If you’ve started using subcontractors in your business, it’s important to be aware of your legal liabilities to them. For example, you may be liable for any injuries that occur in the course of their work, which can potentially be a very costly risk. You should also make sure there is a policy in place that subcontractors should have their own insurance in place for any injuries or damage they may be responsible for themselves.
3. You’ve Purchased New Equipment
If you’ve purchased any new equipment or contents in the current financial year, your existing policy likely won’t cover the entire cost of it. You may have to increase the sum insured on your policy for total replacement in the event that you lost everything.
4. You’ve Made Improvements to Your Building
Any extensions or improvements made to your business premises are likely to increase the overall cost of your building. As such, you will need to increase your building sum insured in order to ensure the entire premises are covered.
5. You’ve Increased Stock
When renewing your insurance policy, it’s important to consider stock fluctuations. The precise stock that you have at renewal time may not accurately represent the stock you have throughout the year. Consider any increases of stock you are likely to have, for example if you hold a higher level of stock at Christmas, make sure your policy covers the value at peak times
6. You’re Seeing Changes to Revenue
Your insurance premium is likely to change with a significant increase or decrease in revenue. One of the policies this will greatly affect is Business Interruption Insurance, as this covers you for loss of profits while your business is out of action. If your sum insured is lower than your actual revenue, you won’t receive as much compensation.
7. You Have Changes to Staffing
If you’ve recently employed more staff, your Workers Compensation insurance will need to be updated. A Management Liability policy may also be appropriate for your business in order to cover any claims made against the directors and management team of your business such as unfair dismissal or workplace bullying claims.
Don’t find yourself underinsured. Review your business and the risks that it faces each year, to ensure your insurance policy accurately reflects and accounts for your current business situation.
PSC Insurance brokers can work with your business to evaluate any changes that have occurred and ensure your business is comprehensively protected in the coming financial year. Contact us for more information.
Conditions apply for each policy and the information expected from you for a policy to trigger. Coverage may differ based on specific clauses in individual policies. Please ask your broker to explain the additional benefits and exclusions pertaining to your policy.
The information provided is general advice only and does not take account of your personal circumstances or needs. Please refer to our financial services guide which contains details of our services and how we are remunerated.
