Recently, a well known local Underwriter surveyed hundreds of risk managers and insurance experts; where the findings pointed to Business Interruption being ranked the top threat facing businesses in 2015.
According to this report; Fire was the risk most feared by companies along with Cyber risk and the loss of key suppliers and customers. Almost outweighing the damage itself was the subsequent disruption caused to the everyday operation of said business.
Now; more than ever, there is an extreme importance to prepare for these types of disruptions to help reduce the potential damage to a business, it’s longevity and reputation.
What good is having cover for repair and replacement of material items when your Business has suffered greatly by not operating or not being able to provide a product or service to a client/customer?
To assist your company should an insurable loss cause an interruption to business here are some key points we at Ballarat Insurance Brokers believe you should consider:
Keep records – In the event of a claim; sometimes the most time consuming process is providing proof of loss. Backing up and generating such records could eliminate substantial delays that we witness quite often. Although you may think; “This will never happen to me”, it shouldn’t take alot of time and effort to record an inventory (with photos or scanning receipts) and backing this up with all other business records on a regular basis.
Consider any potential occurrence – If the recent catastrophes interstate and internationally can teach us something; that is: Anything can and will happen. As a business owner reviewing the need for Business Interruption Insurance; you must ask yourself:
- If I suffer a loss; can I temporarily relocate to ensure business continues as usual?
- How will it impact my business if my customers or suppliers suffer as substantial loss and they’re unable to operate for a period of time?
- If I suffer a loss and my clients and customers are forced to consider using another supplier or service provider other than myself; how will this impact my business?
- If you know of a circumstance where another person or business has suffered a loss; whether great or small – what would your business need to survive such a loss? (Regardless of whether you’re confident it would never happen to you)
Have your insurance advisor explain this cover to you in complete detail (differences between Gross revenue vs Gross Profit etc) and provide multiple quotes not only on the section sums and sub-limits (Claims preparation fees & increased costs of working) but also the indemnity period. 12 months passes very quickly and if there is difficulty with council approval for reinstatement of property or issues with trade time restraints. You may even be surprised at the minimal impact it may have on your premium by being covered for 18-24 months.
Take the time to protect your business now and save yourself from the added pain later.
Finally; you must always remember when considering insurance for property and business interruption, that your insurer most likely has applied an underinsurance clause. Make sure your sums are accurate and comprehensive as this again can cripple any business if such conditions are tested and applied.
For more information or for free advice; please contact our office on (03)5333 5222 to discuss with an experienced account executive.
**Please note the above is general advice only and has not taken your own person insurance requirements into consideration**