Why Regular Insurance Reviews Are Essential for Your Business
In the hustle and bustle of running a business, it’s easy to let certain tasks slide down the priority list.
Regularly reviewing your insurance coverage often falls into this category and your local insurance broker, RSM Tasmania, is here to help you stay ‘on station’. Complacency in this area can come with a hefty price tag.
Let’s explore why routine insurance reviews are crucial for safeguarding your business and ensuring you’re not caught off guard when the unexpected happens.
The Danger of Set-and-Forget Insurance
Many business owners take out insurance policies when they first start and then leave them unchanged for years. While this might seem convenient, it doesn’t account for the dynamic nature of business. Over time, your operations, assets, and risks can change significantly, making your initial coverage inadequate.
How Businesses Evolve Over Time
Growth and Expansion
As your business grows, you may acquire more assets, hire additional staff, or expand your services. These changes can increase your exposure to risks and require adjustments to your insurance coverage.
Changes in Operations
Introducing new products, services, or processes can introduce new liabilities. For example, starting to offer delivery services or moving into e-commerce brings different risks compared to a traditional brick-and-mortar setup.
Market and Environmental Factors
External factors such as economic shifts, regulatory changes, and environmental concerns can impact the type and extent of coverage you need.
The Impact of Inflation on Your Insurance Coverage
Rising Costs of Repairs and Rebuilds
Inflation is an often overlooked factor that can quietly erode the value of your insurance coverage over time. As the cost of materials, labour, and construction continues to rise, the amount required to repair or rebuild your business premises may outpace the coverage limits set in your policy. This discrepancy can leave you underinsured, even if your policy was adequate when it was first purchased.
Why Inflation Matters
Business Premises Insurance
The cost of building materials and labour has seen significant increases in recent years. What might have been a sufficient coverage amount five years ago may now fall short of the actual costs needed to repair or rebuild after an incident.
This means that if your policy hasn’t been adjusted to account for these rising costs, you could be left with a substantial financial gap.
Home Insurance
Similar to business premises, the rising costs of rebuilding a home due to inflation can leave homeowners underinsured. If your home insurance policy hasn’t been updated to reflect these higher costs, you may not have enough coverage to fully rebuild your home in the event of a disaster, leaving you financially vulnerable.
How to Protect Your Business and Home Against Inflation
Annual Review of Coverage Amounts
Make it a habit to review your insurance policy annually and adjust the coverage amounts to reflect current market conditions. This ensures that your policy keeps up with the inflationary trends affecting the cost of materials and labour.
Consult with Insurance Experts
Work with insurance professionals who can provide guidance on appropriate coverage amounts based on the latest market data and inflation trends.
Benefits of Regular Insurance Reviews
Ensures Adequate Protection
Regular reviews help identify gaps in coverage and ensure all aspects of your business and home are protected.
Cost Efficiency
Reviewing your policies can also uncover areas where you might be over-insured, allowing you to adjust coverage and potentially reduce premiums.
Peace of Mind
Knowing that your insurance aligns with your current business situation and home value provides confidence and reduces stress, allowing you to focus on growth and success.
Signs It’s Time for an Insurance Review
- You’ve moved to a new location or expanded your premises.
- You’ve added new products or services.
- Your revenue has significantly increased or decreased.
- You’ve purchased new equipment or technology.
- There have been changes in industry regulations affecting your business.
- It’s been over a year since your last policy review.
- You haven’t reviewed your home insurance in light of recent inflation.
How to Conduct an Effective Insurance Review
Assess Current Business Status and Home Value
Take stock of your current operations, assets, liabilities, and any recent changes, as well as the current value of your home.
Evaluate Existing Policies
Review the details of your current insurance policies, including coverage limits, exclusions, and premiums.
Identify Gaps and Overlaps
Look for areas where you may need additional coverage or where you might have redundant policies.
Consult with Insurance Professionals
Engage with experts who can provide insights and recommendations tailored to your specific needs.
We’re Here to Make It Easy
At RSM Tasmania, we understand that running a business leaves little time for tedious tasks like insurance reviews. That’s why we offer a complimentary and thorough insurance check up service.
Our team will handle the heavy lifting, reviewing your current policies and providing clear, actionable advice to ensure your business and home are optimally protected.
Don’t let complacency put your business or home at risk. Regular insurance reviews are a simple yet powerful way to protect your livelihood and ensure you’re prepared for whatever the future holds.
Remember, this article is general in nature and doesn’t take into account your specific objectives, financial situation, or needs. For advice tailored to your circumstances, have a chat with us at RSM Tasmania Insurance Brokers Hobart.
Ready for a hassle-free insurance review?
Reach out to RSM Tasmania today and let us help you keep your business and home secure and thriving.
Talk to Roger Hosie and stay ahead with RSM Tasmania’s insights.
Call Now! (03) 6244 7854, or email .
