One of the biggest mistakes that Australian business owners can make when insuring their business is underinsurance – the practice of failing to obtain the right level of small business insurance to match the true value of your assets.
Underinsuring your business can lead to massive consequences further down the line, so to help you avoid this pitfall we’ve put together a quick guide to ensuring that you have the right level of cover.
Re-evaluate your needs
As your small business grows, it is normal for your insurance needs to change and evolve over time. This is a natural part of being a small business owner, and it is something that you need to be aware of.
Make sure that you are re-evaluating your insurance needs at least once a year in order to ensure that you have the right level of cover. Be honest about your circumstances and the needs of your business, and you will go a long way towards avoiding the trap of underinsurance.
Don’t go chasing lower premiums
No one enjoys spending money on insurance premiums. Most of us would much rather be tucking that money away to fund a big screen TV purchase, or to pay for that family holiday that we’ve been craving. However, it’s important not to allow the appeal of lower premiums to cloud your vision when determining the right level of insurance cover for your business.
If your business is significantly underinsured, and an event occurs that requires you to claim on your insurance policy, it is likely that any losses you experience will significantly outweigh any minor savings you might have gained from chasing a lower premium.
Don’t skimp on having the right level of cover for your business. Make sure you have a proper idea of the actual value of your business assets, and take care to ensure that you will not be left out of pocket if an incident should occur.
Talk to a professional
Small business owners, by their very nature, tend to be people who believe in the DIY ethos. Most of the time this is a great asset to have; however, not when it comes to insuring your business.
When determining the right level of insurance for your small business, it can often be beneficial to talk to a professional insurance broker who can give you independent advice on the right level of insurance to meet your needs.