Renewing your business insurance

Renewing your business insurance

Finding your way through the business insurance maze

Protecting your business from the financial impacts of unexpected events begins with a fact finding mission, not by taking out insurance.

Why? Because until you know all the potential risks of your business environment and the industry in which you operate, you won’t know what sort of cover you need. And even when you’ve worked that out, you have to decide the best way to manage that risk — and usually, insurance is just one component of a good risk management strategy.

It might sound time consuming and complicated, but without this sort of approach, you could easily underinsure your business (which might be as bad as not insuring at all), or over-insure (which means money down the drain every time you pay your premiums).

That’s why an experienced and well-credentialed insurance broker is such a valuable asset in helping you protect your business.

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A good broker understands your business and works on your behalf

Most people who start their own business, do so because they’re passionate about something. And when you are trying to build and grow your business, it’s good to be supported by others who understand what you’re doing and know where you’re heading.

So, before you start talking to a broker about specific insurance solutions, talk to them about your business, you industry, your customers and your aspirations. This knowledge will help them analyse your needs, identify gaps in any existing arrangements and if needed, introduce you to other experts in their team such as specialists in workers’ compensation, property valuations or other risk management professionals.

What does a broker actually do?

The role of a broker is to act on your behalf and recommend both risk management strategies as well as insurance solutions. Your broker should help you:

  • Understand the various risk exposures of your business
  • Identify ways that you can reduce any of those risks and therefore potentially pay lower insurance premiums (perhaps through better maintenance programs or through upgrading locks or security systems)
  • Determine how much risk to transfer to insurance and how much (if any) you might retain
  • Ensure you fully understand your legal obligations as a business or employer of people.

Based on this information, your broker will prepare a thorough submission that includes insurance policy recommendations and details of what every policy covers.

In the event you need to make a claim on your policy, your broker will make sure that your claim is filled-out correctly, and then advocate on your behalf with the insurer to ensure speedy settlement.

Things to ask your broker

It’s very important that you feel confident with the recommendations of your insurance broker, and one of the best ways to do this is to ask a few questions, such as:

What does this policy exclude?

When buying insurance, you don’t want to be paying for surprises. Understanding what’s not covered under the policy is as important, as what’s covered. You don’t want to wait until you’re lodging a claim to find out that you’re not actually covered for that particular incident, because it’s part of the finely printed exclusions of your policy. Many brokers are able to repeat the standard spiel on why an insurance policy is absolutely perfect for your business. The true experts will talk you through the details, ensuring you understand what cover you do and don’t have.

What do other insurers offer?

Asking this question will check if the broker has actually done their job of approaching several insurers to negotiate the optimal risk management program for your business. You don’t want your cover to be given to the first insurer the broker may have a relationship with, or the one who pays the highest commission.

Have you covered other similar businesses? Do they have exposures that might be relevant to mine?

Highly resourceful brokers are able to provide benchmarking data that compares your business to other competitors within your industry, and tailor the insurance program to your industry risks. Even if this is not the case, an experienced broker would be able to show their familiarity of dealing with similar businesses and provide knowledgeable insight into other exposures you need to consider.

With the right insurance broker in your corner, you can have the confidence that your business is properly protected, and the peace of mind to focus on the things that matter most.

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