Nothing stands still, least of all in business. Chances are your company has changed in large or small ways, but has your insurance kept pace? Could you be over or under insured? These are some of reasons why it’s important to do a regular business insurance risk review. Here’s how you could benefit.
Many businesses actively manage changes to adjust to market demand and economic conditions, but often renew their existing insurance cover every year without considering what may have altered or making allowance for their future plans and prospects. Reassessing if your business insurance protections remain not just adequate, but optimal, provides important advantages to support business success.
A business insurance risk review can
identify gaps in your cover
address exclusions in your policies
alert you to new risks in your operations
ensure you’re responding to COVID-19-related or other new emerging exposures
assist with securing optimal coverage
unlock potential savings.
Common factors that drive changes in business risk are
the business changing – growing, moving, gaining or losing employees, updated processes and customer service
industry factors – regulations, legal exposures or trends that give rise to future risks, innovations (eg: driverless transport)
shifts in markets and customer base, including new competitors, customers/ clients and their service expectations
business operations – adoption of new technology, privacy of data and intellectual property
financial stability, turnover, cash flow and cyclical influences.
What a business insurance risk review covers
As every business is unique and is affected in different ways, conducting an insurance risk review helps identify if your business insurance cover matches your current or imminent risk exposures and is effectively balancing and transferring risks, safeguarding your assets and protecting against potential losses.
What you can expect a business insurance risk review of your program to assess
whether your business risks are adequately identified
if your business would be able to survive a critical incident with current insurance cover or if improvements can be made
whether your insurance policies the best fit for your business risks or if specific areas of cover can be improved
risk gaps of non-insurance or under insurance (when the sums insured are set too low)
if your business or industry faces emerging or growing risks that need risk mitigation and planning considerations now.
The insurance market is also changing and a broker conducting a review examines key variables such as:
availability of cover
access to alternative providers, in overseas markets, eg
capacity offered (partial or full cover for risks)
terms the cover is offered on, including exclusions
The information provided by conducting a business insurance risk review enables your insurance broker to individually tailor your cover to your individual needs including new exposures such as cyber or changed trading conditions due to COVID restrictions.
Their involvement can also influence the cost of your premiums, through their understanding of your business, how they represent it to potential insurers and their access to local and international insurance providers. They also may be able to arrange premium funding arrangements to assist with managing your cash flow, or advise if you are eligible for a reduction due to reduced turnover.
A medium sized business with revenues in the millions provided each of its 200 staff members with a phone and tablet which were insured for loss or damage.
The policy cost thousands of dollars a year, but the company had never incurred a claim. Plus the policy deductible was $250, meaning that if a phone was lost or damaged the deductible would be almost half the replacement cost.
Over the years, the client had paid tens of thousands of dollars for this policy. Our Gallagher broker recommended the client retain this risk and keep the premium money in their business.
A business providing mechanical supply and maintenance services had two endorsements which excluded hot works and providing advice – key elements of its operations. Since the business provided welding services to its clients the hot works exclusion was a major gap in its cover that the owner had been unaware of. Upon appointment as their insurance broker we were able to remove this exclusion.
Also its public liability policy contained a total exclusion for advice, which the business provided for product use as part of their supply and maintenance service. Our Gallagher broker was able to have this exclusion altered in order for the policy to cover incidental advice provided by the client.
Take advantage of a complimentary Gallagher business insurance risk review
Don’t delay, get a business insurance risk review now at no cost. You receive valuable insights to support decisions for your next insurance renewal such as:
cost containment strategies under your general insurance program
insurance obligations and other material contractual agreements
if there are any statutory workers’ compensation adjustments required ‒ particularly in regard to workforce numbers, payroll and place of work
cash flow improvement opportunities via premium funding assessment.
Gallagher provides insurance, risk management and benefits consulting services for clients in response to both known and unknown risk exposures. When providing analysis and recommendations regarding potential insurance coverage, potential claims and/or operational strategy in response to national emergencies (including health crises), we do so from an insurance and/or risk management perspective, and offer broad information about risk mitigation, loss control strategy and potential claim exposures. We have prepared this commentary and other news alerts for general information purposes only and the material is not intended to be, nor should it be interpreted as, legal or client-specific risk management advice. General insurance descriptions contained herein do not include complete insurance policy definitions, terms and/or conditions, and should not be relied on for coverage interpretation. The information may not include current governmental or insurance developments, is provided without knowledge of the individual recipient’s industry or specific business or coverage circumstances, and in no way reflects or promises to provide insurance coverage outcomes that only insurance carriers’ control.
Insurance brokerage and related services to be provided by Arthur J. Gallagher & Co (Aus) Limited (ABN 34 005 543 920). Australian Financial Services License (AFSL) No. 238312