Making the right choices for business insurance has never been easy. Unfortunately for SME owners, a number of factors are contributing to more complexity and higher costs, making it more difficult to mitigate risk with thorough retail coverage.
Rising retail insurance rates could spell trouble for small business owners
As reported in the Sydney Morning Herald and SmartCompany last week, the BizCover Small Business Insurance Index shows that retail businesses like stores, cafes, and restaurants saw a 10 per cent increase in insurance premiums last quarter. This has led to speculation that rates may rise even higher in 2016.
Natural disasters this summer have now incurred damage costs over $515 million.
The rising price of insurance comes largely as a result of increasing claims. The recent string of natural disasters across Australia resulted in a drastic bump in insurance losses this summer. As reported by the Insurance Council of Australia, significant damages have resulted from bushfires in South Australia, Western Australia and Victoria, along with a tornado in Sydney. These natural disasters have now incurred damage costs over $515 million. More recently, a hailstorm over Canberra just before Australia Day led to 1,400 claims for damage to cars and homes, according to the Canberra Times.
These disasters, combined with low profit margins and a lack of competition, are the driving force behind the financial burden of retail insurance for smaller businesses.
Get help navigating your business insurance options
With rising premiums, it might seem like a good idea to opt for the cheapest plan available. That type of thinking, however, can be a mistake for SME owners. The cheapest coverage might be missing key provisions that your situation calls for. A business could be in for major costs down the line if their insurance policy doesn’t meet its coverage needs.
Fortunately, insurance brokers can be invaluable for small businesses.
“I recommend all my clients use an insurance broker who is able to shop around with different insurers to find the best in the market,” Allied Business Accountants director David McKellar told SmartCompany on January 28.
“Business insurance in general can be quite complex with different inclusions and exclusions,”
McKellar also noted that it is important for businesses to periodically review their insurance needs, as numerous changes and fluctuations can affect a business insurance policy.
Don’t let your business get stuck with a plan that costs too much or covers too little. Get in touch with a broker at MGA insurance to discuss your insurance needs today.