As a small business owner, there is always something that needs your attention, from looking after your customers to your marketing campaigns and accounting just to name a few. But one thing which shouldn’t be forgotten is reviewing your business insurance.
It’s often one of those set and forget things that we just do, but in the event that you needed to make a claim, it’s important that you have all the right policies in place to help keep your business protected.
Not being aware of what is included and excluded could cause a painful experience if you needed to lodge a claim, a drama you can live without.
For most businesses in New Zealand, the financial year runs from 1 April which makes March the ideal month to review what you have and discuss any amendments that could be made if your circumstances have changed.
Our guide takes you through the basic steps on how to review your business insurance and what you need to keep in mind during the process.
Understand the purpose of your cover
Every business will have its own risks and need for different types of business insurance. This is a quick snapshot of some of the main types of business insurance available. It is always wise to check your product disclosure statement or talk to your insurer for the specific details of your business insurance policy.
The first step to knowing what your coverage includes is to understand its purpose. This will depend on the type of your insurance. We have published blogs on some of the more popular ones:
- Public Liability
- Professional Indemnity
- Statutory Liability
- Business Interruption
- Commercial Motor Vehicle
- Cyber Liability Insurance
Get to know what’s covered and what’s not
One of the fundamental parts of reviewing your business insurance is getting into the nitty-gritty details, like what is covered, what is excluded, what are your coverage limits and if there are any sub-limits.
This information is usually outlined in your product disclosure statement (PDS) and can usually be accessed online through your insurer if you need a copy. If there are areas of your policy that you are unsure of, please get in touch with your insurer and ask.
Other than your PDS, you need to review the amount that you are covered. This is something that you need to keep in mind because your business’ circumstances may have changed since you set this limit.
The danger of under-insurance
Underestimating the value of things like business buildings and assets for insurance purposes may in the short term save a few dollars each month on your premium but could have material financial consequences in the long run. If you are only insuring part of the value you are going to have to make up for the shortfall if an insurable event occurred.
Reviewing and updating your policy
It’s very rare that things stay the same for long in the business game. New Zealand’s response to the Covid-19 pandemic over the past two years has changed the operating conditions for many small businesses. Some of the things to consider when reviewing your policy may include:
- Has your business location changed?
- Have you hired/ decreased staff?
- Have you purchased more equipment for your business?
- Have you changed any of the security measures, like installing extra alarms?
- Have any aspects of your business operations changed?
- Do you now include different kinds of services?
If so, make sure that these are also updated and noted on your business insurance policy
Renewal time is an opportunity to give your business insurance policy a proper health check. It gives you time to see if there are any significant gaps in your policy where you may need extra or a new form of cover to help keep your business protected. On the flip side, you may have sold assets or downsized your business and need to adjust your policy which may reduce your policy premium.
How can we help?
At Wayne Grayson & Associates, we believe an informed insurance decision is the right one. Getting your business insurance should never be a hassle, whether you’re after a business or personal insurance, our expert brokers will ensure your insurance is the right fit for you.
Contact one of our Auckland-based insurance brokers for advice on the best solution to you and your work from home insurance needs.