Protecting Your Business

When it comes to protecting your business, are you really prepared?

Here is an all too common scenario; a business owner is asleep after a hard day’s work and the phone rings, his business premises are on fire. He races across town and arrives to see his whole life’s work goes up in smoke.

For many, the business is everything. It becomes their sole source of income, an investment their superannuation for the future, as well as the mortgage over the home.

 

As daylight breaks and after the fire brigade have gone, a new phase begins – police investigation and perhaps an insurance loss adjuster. Employees arrive at work worried about their jobs and anxious customers awaiting delivery of big orders hear the rumors of fire and try to make contact.

 

By this time, the insurance broker has been contacted with frantic questions to see if the premium was paid.

“Did I get the bill? Have I paid it? Am I fully covered?”

 

What is the reality?

 

We know that 84% of small to medium enterprises (SME’s) believe they are fully insured. Regardless of this, Insurance Industry analysis has found that there are still three significant areas of underinsurance that catch most small businesses out.

 

The first is removal of debris. Building fires generate tonnes of debris and many people just  do not realise the high cost associated with removal and dumping after a fire.

 

The second is property values. According to a leading Insurer, 75% of businesses roll over their sums insured year after year. After three years 46% still have the same sums insured as they did three years earlier, however, in that time building costs have gone up an average of 20%.

 

Sky-high building costs are not the worst issue. Consider the cost of machinery and plant increases and in this one example, stainless steel goods, which are up 50% over the last 12 months alone. Clearly, any restaurant or anyone in the food industry that needs stainless steel fixtures and fittings will find that they may be grossly underinsured.

 

Perhaps the area that has the most underinsurance of all is business interruption.

 

Research shows that only 31% of SME’s have any form of Business Interruption Cover and even those who do, don’t have enough. The bottom line is that in the majority of cases, businesses without a sensible level of Business Interruption Insurance will not survive a serious insured event.

 

Those are the three strikes, all collaborating to destroy your business for good.

 

How would you fare?

 

There is a balance between being adequately covered and not breaking the bank, you need to speak to someone who can steer you in the right direction.

If you want to check if you could recover from a major loss event in your business, email us on chris@powersib.com.au or call us on 07 3123 6622 and talk to one of our brokers  at Powers Insurance Brokers.