Don't Forget, Claims Are All Part Of The Service

W hen it comes to business insurance the first thing you have to understand is that there are many different types of businesses, some are retail and require Retail Insurance, some are professional services and require office insurance, others are service based and require trade insurance. With as many different types of businesses you can think of, there are also as many different types of business insurance policies you can choose. Generally speaking however they do all have the same core structure to them. Business insurance policies are broken down into sections offering different types of cover. You can choose to insure a section or not depending on how you view risks to your business and what financial position you are in to mitigate them. In most business insurance policies though, there are 10 basic sections which you can insure under. These are as follows: Property or Fire & Perils Insurance: This is insures your buildings, contents & stock to cover them with Fire insurance, Storm insurance, Malicious Damage insurance, Accidental Damage insurance, Impact Damage insurance etc. As mentioned earlier, all insurance policies are different. Some insurers include stock under the contents section, some do not, some will cover you for flood, some will not, so you need to make sure you know what is covered before you take out a policy. Business Interruption Insurance: This insurance is often not well understood by many in the insurance industry let alone you as a business owner. It provides cover to insure the loss of or shortfall in income that results after an insured loss (ie you can’t trade for 2 month after a fire). The basic cover gives you protection of your gross income (turnover less cost of goods sold in insurance talk) as well as fixed expenses for a chosen insured period). In order to have a comprehensive cover under this section it is well worth consulting an expert as there are many extensions you can add that save you heartache in the event of a claim. Theft & Money Insurance: Some insurance policies have these covers separate while others combine them. The cover in either case is pretty much the same. Theft is where you insure your stock and contents for cover for theft. You can often choose extensions to include theft without forcible entry and shoplifting as well. Money is a little more complicated but the basic idea is to cover your business cash. You nominate a sum insured and you can choose to cover this on the premises during business hours, on the premises during non business hours, in transit to and from the premises, in private residence and a few others. You can also choose to have a “blanket cover” that covers most of the above under one sum insured. Glass Insurance: This cover seems self explanatory in that is covers breakage of fixed glass but, has more to it then you may think. Glass cover is generally split into two options, External cover for windows and doors and internal cover for display cabinets and fridges etc. and you can choose to insure one or both. You need to make sure however that there are extensions under the cover you choose to cover boarding up costs, scratching, and sign writing as these covers are not always automatically included. Liability Insurance: This is another one of those covers that seem straight forward but can be more complicated than you think. Liability insurance is to provide cover for your businesses legal liability in relation to property damage or personal injury to a third party resulting from you conducting your business. Pretty straight forward so far, but, if you are a manufacturing business or import products from overseas; you need to make sure you include a products liability cover. If you are a trades business and you employ subcontractors, you need to make sure you extend the cover to include them. Liability insurance premiums are generally calculated on your occupation, your turnover and the number of employees you have. Employee Dishonesty Insurance: This provides cover for loss of goods or money due to fraud or dishonesty of your employees. Machinery Breakdown Insurance: This provides cover for damage to machinery caused by breakdown (not wear and tear). This cover can also be extended to include loss or spoilage of food items if a fridge breaks down. Some insurers will also provide a cover similar to business interruption under this section. It is essential that you get the sum insured right on this section of a policy as if you need to import machines from overseas, costs can really blow out, not to mention down time. Computers and Electronic Equipment Insurance: This provides cover for fire, theft, accidental damage and breakdown. It also covers business interruption for computers and electronic equipment that you want specified in your policy or that are portable in nature. General Property Insurance: This cover has many options but put simply, it is designed to cover contents that are moved around such as tools of trade or other professional equipment. Cover can include fire and perils, theft and accidental damage. Tax Investigation or Audit Cover Insurance: Two distinct covers exist, one is tax audit only which covers the expenses incurred by your business for professional fees of your accountants when the Tax office decides to Audit your business. Audit cover is a broader approach and covers more government agency audits such as Work Cover and the like. Whatever business insurance policy you decide to take to insure your business, you need to make sure you understand what is and, more importantly, what is not covered, to ensure you don’t end up kicking yourself in the event of a claim.

Window and Door Manufacturers are some of the busiest trades in Australia today. When your products are the very thing that makes a home complete, you deserve the same level of wow factor when it comes to your insurance policy. We have put together a policy specifically for your industry and would love to help you open the door to better insurance.

  1. Is the cover Correct? - There is no point having it if it does not cover you! Strangely often overlooked, this is number one as it is by far the most important. Let's be honest, there is no point paying for an insurance policy if it is not going to cover you for what you need. The following are some of the key things to check as they may affect you in unexpected ways come claim time. Under Insurance Clauses Definitions of Stock and Contents (this varies from insurer to insurer) Geographic Limitations Legal Jurisdictions Policy exclusions (make sure you check all sections of the policy) Words With Special Meanings   2. How is the Claim Service? - This is really what you pay for. I can unequivocally say that some insurers are brilliant when it comes to claims and others... not so much. Where does your insurer stand on this? Does the claim manager have decision authority? Are they likely to appoint an external assessor? Do they have a "no pay culture" or do they do what they are there for? Claims Service is ultimately what you pay for so make sure you have an insurer that understands this.      3. Is the price right? Like most things, you get what you pay for so you need to understand that insurance policies from one insurer to another are different. Getting a multi policy discount can sound fantastic but remember the discount is only of that insurers price. We often see other insurers non-discounted price being substantially cheaper than the discounted policy given in a multi-policy discount. On the flip side, many insurers only sell an extremely basic policy with strict conditions that may make paying a little more for a policy that offers broader coverage well worthwhile at claim time. Make sure it is right!

David and Sarah were a typical Australian business. They had taken a risk and started an auto parts import business sourcing their parts exclusively from two International suppliers.

If a business is unable to trade due to an insured event, then the business interruption insurance is activated to protect the net profit and ongoing expenses of the business such as wages, rent, finance repayment etc.. A business can also have a loss of insurable gross profit in the form of a reduction in turnover or increased costs insured in order to keep trading through the interruption to the business.

Getting the right type and dollar amount of business insurance is a critical part of setting up any new business. However, once you have your policies in place, and are focusing on the day to day running of your business, it’s really easy to forget all about your insurance coverage. This can be a huge mistake however – several years might go by without revisiting your insurance policies, and you could easily expose your business to the risks of being underinsured.