Owning a business means facing risks. That’s why having the right insurance is crucial. But many businesses unwittingly expose themselves to trouble by going it alone when it comes to insurance. They end up underinsured, meaning their policies don’t fully cover potential losses.
What exactly is underinsurance? It’s simply not having enough coverage to rebuild or replace everything after a disaster. This is a major problem, especially in Australia, where studies show half the population has limited home insurance, and one in ten businesses lack proper coverage.
Why is underinsurance dangerous? Consider a fire or storm. You might think your insurance covers the damage, but what about lost income while you’re shut down? Staff salaries, bills – they still need to be paid.
Just insuring physical assets isn’t enough. You need coverage for the disruptions caused by a disaster. Without it, you’ll be left holding the bag for unexpected expenses.
Think of insurance premiums like buying shoes. You get the right size for your feet, not something two sizes too small! Insurance works the same way. Your coverage needs to reflect the current value of your business to be effective.
The world is full of surprises, from fires to cyberattacks. A professional insurance Adviser can help you identify potential risks and ensure you have the right amount of coverage.
Here are some signs you might be underinsured:
- Your insurance hasn’t been updated as your business has grown.
- Your “sum insured” (the maximum payout) is outdated and doesn’t consider inflation.
- Your policy only covers your physical location, not things like lost income or legal liabilities.
Don’t wait until disaster strikes to realise you’re underinsured. Talk to one of our Advisers for professional insurance advice!
This rewrite uses a more conversational tone, breaks down complex concepts, and includes a relatable analogy to make the information engaging. It also emphasizes the call to action, encouraging readers to seek professional advice.
This article was extracted from the original article on Resilium Insurance Broking – Is your business at risk of being underinsured? – Resilium Insurance Broking Pty Ltd