A new study by Australian Banking Finances has found many Australians to be substantially underinsured.

Underinsurance may be easy to rectify in areas such as health, home and car insurance, but it’s likely many businesses aren’t thinking enough about additional cover for their enterprise.

For instance, a company may have cover for the building or work site, but neglect to take out a business interruption policy for loss of revenue, or fully insure for the loss of physical assets and risks associated with employing staff..

This is a crucial consideration for all businesses, particularly industries with high risks of accidents or injuries. A comprehensive insurance programme can ensure a company does not incur a financial setback if an employee takes action against an employer for events such as discrimination, bullying, wrongful dismissal, work injuries and the like.

General Manager of marketing, retail and product at TAL Greg Johnson explained that although cover take up has seen a rise over the past decade, a number of Australians are still neglecting to take out policies, or properly insure, due to a lack of understanding when it comes to insurance products.

“The Australian population is woefully underinsured relative to what they would actually need if something happened to them,” he explained.

Mr Johnson discussed the common consumer theory of starting up a contingency bank account, in place of paying premiums to an insurance company. He stated that the practice could leave consumers and business owners significantly out of pocket.

“There’s a segment of the market that consider themselves self-insured and they talk about things as if they could take the premiums and put them in a bank account and that would be good enough,” Mr Johnson said.

Taking out a comprehensive cover is a necessity, and should go beyond the basics. Businesses need to consider all aspects of operations, and determine if damage to any one area would cause substantial setbacks.

Thankfully, the helpful team at MGA are always ready to answer your queries when it comes to business insurance. If you’d like additional information for finding a policy tailored to your needs, contact the team today.