All businesses, big and small, evolve over time.
And as a business grows, develops, and changes, so should its insurance.
Failing to have the right business insurance covers in place can leave a business vulnerable and could jeopardise its financial stability. Here are Oracle Group Australia’s top three reasons why you should review your insurance policy at least every six months.
1. New products and services
All businesses aim to transform their products and services in order to stay relevant with their target audiences.
However, when doing this, many businesses forget to check that their business insurance policy covers these changes. Reviewing and updating your business descriptors and disclosures within your business insurance policy is a must. This will mean that you protect your new income stream in case the unwanted happens.
For example, if you run a craft brewery you may have introduced a new online purchase and delivery service because you have seen profit potential.
However if these new activities cause injury, data losses, or other damage, your business is potentially liable so you need to ensure your business descriptions and disclosures include this new service offering.
2. The market has changed
Even if your business services and offerings stay the same, the market changes continuously. Consider the effects of inflation and property prices on the value of your assets.
For example, if you operate in the construction sector, issues in the international supply chain and logistics industries mean that stock like steel and timber may have increased in value. So, at times when you are storing stock until construction starts, you need to consider if your insurance is adequate to cover the current replacement value of stock if it gets stolen or damaged.
No matter what changes happen in your industry, it’s crucial to be aware of the changing value in your assets and ensure you have adequate cover in case your business experiences a significant claims event.
3. Your audience’s expectations change
The third reason why businesses should review their insurance policy is their clients’ expectations. Customers are becoming savvier and so are their standards, which is part of the reason that Australia has become the second most litigious environment in the world.
So, ask yourself: “Would your business be protected appropriately if it faced legal action?”
Because if for any reason businesses don’t have clear contracts or if clients believe businesses aren’t meeting their expectations, facing legal action in Australia is a real possibility.
In this environment it’s crucial to have the right type of insurance, and well as the right level of cover. For example, for those operating in professional services, having professional indemnity with both single claim and aggregate limits is a must to protect your business.