澳大利亞專業商務保險顧問
UNDERINSURANCE
The Greatest Threat to Your Insurance
Ensure You Have the Correct Level of Protection for Your Business
Your business is likely one of the most valuable things you own, so it makes sense to protect it in both good times and bad. One of the biggest reasons small businesses in Australia fail is due to not having enough cash flow. This is where having the right level of insurance can make a big difference, as it helps keep your business running smoothly when the unexpected happens.
The Risk of Not Having Enough Insurance
Unfortunately, about 1 in 10 Australian businesses that have insurance don’t have enough coverage to fully protect themselves against crisis like business interruptions, legal liabilities, or damage to their assets.
This situation is known as ‘underinsurance,’ and it can significantly increase the risk of a business having to close if something goes wrong.
But why are so many businesses underinsured?
Low Premiums Can Be Deceptive:
Some business owners choose insurance based on the lowest premium (monthly cost) without checking if it truly covers all their needs, especially in a disaster caused by an accident. This might mean that the amount insured (and therefore claimable) is too low to cover potential losses, or that the "cheap"policy was cheap becuase it was issued with terms that limit how much can be claimed.
Underestimating Costs:
It’s also common for business owners to underestimate how much it would cost to rebuild or replace their business assets after a disaster like a fire or storm. If the amount insured doesn’t match the current replacement or rebuilding costs, the business could end up being underinsured, leaving the owner to cover significant costs out of their own pocket if they need to make a claim.
Ensuring you have the right amount of insurance helps safeguard your business against these risks, keeping it safe and operational even when disaster strikes.
