7 Simple Solutions to Avoid Disappointment

Whether starting a new business or renewing the insurance on your current one, RSM Tasmania provides the Small Business Insurance Tasmania needs.

There are some simple mistakes you do not want to make. By avoiding these mistakes and considering the examples mentioned, businesses can safeguard themselves more effectively against unforeseen risks and challenges.

Underinsuring the Business

Small businesses sometimes underestimate the value of their assets, and this can lead to insufficient coverage in the event of a loss.

Example: Let’s say you own a clothing store and, to reduce your costs, you deliberately underestimate the value of your stock. One night you have a fire. half your stock is simply ases and the rest reeks of smoke which you are never going to get out.

The insurance cover that you took out is now not enough to replace all the stock that you lost and, depending upon how low your assessment was, you could be thousands of dollars out of pocket trying to replace the damaged and lost stock, let alone the fixtures and fittings that need replacing.

Ignoring Business Interruption Insurance

Many small businesses ignore Business Interruption insurance. After all, what could go wrong that could stop them from opening their business in the morning?

Example: Your cafe does not have business interruption insurance included in your policy.

During the night a water main outside your shop bursts, flooding your cafe and soaking the carpet, making all the furniture waterlogged and unsafe and it is going to take possibly weeks to get new floor coverings and furniture to enable you to open again.

How are you going to pay your rent, pay your staff and pay for the stock you received yesterday but is now useless to you when you cannot even open your doors?

Failure to Update Insurance Policies Regularly

As your business evolves, so should its insurance coverage. Failure to update can result in outdated coverage which may not fully protect the business.

Example: Your courier business started with one van and business has been so good you now have five.

As an add-on to your business you are now storing freight overnight for early morning delivery and the new storage facility you built for this purpose catches fire overnight.

The problem is that you didn’t notify your broker, and therefore your insurance company about the new structure and what is being held inside it, so the insurance policy simply doesn’t cover it because it is not listed as part of your business.

You now have two problems. you cannot deliver the goods and also, you may have to replace them.

Overlooking Cyber Insurance

With the rise in cyber threats, overlooking cyber insurance can be a major mistake, as it helps protect the business from potential online risks.

Example: You are a physiotherapist who keeps your client files on a computerised membership database.

One day you discover that your computer system has been hacked and all of the private patient information has been stolen, enabling the thieves to commit identity fraud. This could lead to heavy fines and also a total loss of reputation for your business.

Not Understanding Your Policy

Not fully understanding the exclusions mentioned in the policy can lead to a huge gap in coverage.

Example: Your business is flooded out. However, you didn’t have anyone to explain the exclusions and now you discover that the policy you paid a lot of money for is not going to help you.

Having an insurance broker like RSM Tasmania on your side to explain these things when you are first setting up your insurance is essential. PLUS – that same broker may be needed to go into bat for you with the insurance company when they start playing hardball.

Opting for the Cheapest Policy

While keeping costs to a minimum is important, opting for the cheapest policy is often not going to give you the best result if things go sideways, leaving the business exposed to various risks.

Example: Your Home renovation business is going along beautifully when, during one of your projects, unintentional damage is caused to the property next door and the neighbour decides to sue.

Unfortunately, your policy does not include third-party liability cover so you now find yourself responsible for the repairing damage, covering legal fees and any other settlements or judgements that may come with this accident.

It could be enough to destroy your business. Always talk to your broker about the policy your need, not the policy you want.

Not Seeking Professional Advice

Before settling on an insurance policy, seek advice from a professional who can help you to avoid costly mistakes and ensure that your business is adequately covered.

Example: Going to an insurance company and buying one of their policies may seem OK. After all, they are an insurance company so they know what they are doing, Right?

Well… sort of. Approaching a professional broker you get some major benefits.

First, you can normally find a local insurance broker that not only understands the policies but also knows the local area in which your business operates. They can include this information in their calculations of the best policy for you.

Second, they can cherry-pick the best policies from several different insurance companies to get you exactly what you need.

And, finally, in the event of a claim they are on your working for you, not the insurance company.

Talk to Roger Hosie from #RSMTasmania today.
Call Now! (03) 6244 7854, or email roger@rsmtasmania.com.au

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