A business (insurance) wake up call for 2021

“In challenging times, business owners should ensure adequate, and possibly adjusted insurance is in place, specifically tailored to current and forecasted business activity,” says IME National Manager Philip Watson. 

“Whether you are an importer, exporter, wholesaler, distributor, manufacturer, retailer, or a combination of these, it may be time to check your insurance covers and the respective sums insured.”

A Business Insurance Policy covers a number of elements including:

Buildings Insurance

This is an insurance policy that covers the financial cost of replacing or repairing damage to the physical structure of business property you own in the event disaster strikes such as a fire. This may include the roof, floors, and walls, as well as any fitted or permanent fixtures. If you own the building you occupy you should make sure it is insured for the correct value sum insured in the event disaster strikes and you need to rebuild.

Contents Insurance 

This cover should include the value of the contents of your premises, including stock and what you would need to replace in the event of a catastrophic event such as a fire, water damage, explosion, impact or accidental damage to name a few example events.

Given the disruptions occurring to businesses in 2020 and moving into 2021, you should check that the value of your stock and their volumes are up to date with the insurance cover you have in place. There are businesses who have a lower turnover due to falling stock volumes in 2020, which means your insurance policy may require adjustment.

Business Interruption Insurance – sometimes referred to as loss of gross profits cover

This cover provides cover for the loss of income and the additional increased costs of working that results from interruption to your business due to a physical loss or damage caused by a fire or a natural disaster. Check to ensure if you have this insurance in place. If you already do, check that the sums insured are in line with any adjustments to your turnover. Also talk with your insurance broker to make sure you understand how the loss of gross profits would be calculated for your business in the event of a loss, as insurers can calculate this in different ways.  

Theft Insurance 

This covers theft or attempted theft by any person who forcibly and violently enters or attempts to enter the premises, any person unlawfully concealed at the premises, any person who threatens or commits physical violence to you, your employees or other persons,  theft or attempted theft by armed hold-up at the premises, theft or attempted theft by any person who breaks into any locked cabinet and/or counter and/or showcase which is located at the premises . As the economy falls on hard times, crime rates increase, so check if you have this cover to protect you in the event these types of theft happen to you.

Money Insurance 

This covers your business’ money whilst on your premises, in a safe or strong room, in transit to or from your premises, or in your personal custody, or the custody of a trusted employee. Check to see if you have adequate cover in place for the money kept on the premises or when in transit. Increased crime rates can also increase the risk of money taken, so check you have this insurance in place if required.

Glass Insurance

This covers you for breakage of glass at your premises (including internal glass such as glass partitions, or external windows). Cover can include destruction of stock or contents caused by broken glass and cover for signs made of glass or plastic which forms part of an illuminated sign. Cover can also include the cost of temporary shuttering necessary to secure otherwise exposed stock or contents pending the replacement of broken glass. It can cover the costs incurred in replacing signwriting, ornamentation, reflective materials and burglar alarm tapes and connections attached to the broken glass. The cost incurred in repairing or replacing damage to window, door or showcase frames and their fittings is also covered, as is the cost incurred in repairing or replacing tiles on shop and office fronts and around the broken glass. Glass damage to external glass which has suffered malicious damage can also be covered. If you lease the building you are in, you should check your lease contract with your landlord to better understand what the requirements are for you to insure glass on the premises.  

Public & Products Liability Insurance

This covers you for your legal liability for personal injury to another person (other than employees) or for damage to property owned or controlled by someone else or advertising liability in connection with your business and caused by or arising out of an occurrence, or arising in connection with your products.

General Property Insurance

This covers you for loss or damage to portable or valuable business property such as tools, laptop computers, a personal digital assistant that you carry around with you occurring anywhere in Australia or the rest of the world. In 2020 you may have employees working from home therefore taking such equipment home with them and you may not have these items insured away from the business premises.

Machinery breakdown & Electronic Breakdown Insurance 

This covers you for breakdown of your business’ machinery and electronic equipment at the premises, which may include items such as air conditioning units, computers, and electronic equipment such as photocopiers and faxes. The aim of the insurance is to cover you for the cost of restoring your business’ computer records following a computer breakdown, the increased costs of working (such as the hiring of alternative computers, the hiring of additional staff ) following the breakdown of your business’ computers. It also can cover you for the costs of replacing your business’ stock which is kept in freezers or refrigerated units if the fridge or freezer breaks down.

Goods in Transit

This provides cover for the loss or damage to goods that your business buys, sells or uses whilst they are in transit. In 2020 you may need to adjust your volumes of stock in transit by sea, air , rail or road, so it may be time to check what you have in transit is in line with what you have insured. You may not have this type of cover in place and assume that the stock you import is insured up to arrival at your business location so it is important to check where the insurance starts and stops with your third parties. This will insure you are not exposed or at risk in the event of stock being damaged or destroyed whilst in transit. 

Tax Audit Insurance

This covers the professional fees you may incur in connection with an audit or investigation of your business’s financial or tax affairs by any authority authorised to do so, e.g. the Australian Taxation Office, Workers Compensation authority.

Contact IME Insurance Brokers to learn more about business insurance,