Underinsurance, having an insurance policy without enough ‘sum insured’ to cover potential losses, is a huge business risk.
According to global research group Rice Warner, Australia is one of the most underinsured nations in the developed world. Indeed, it’s estimated that Australians are underinsured by a staggering $1.37 trillion!
One in ten Australian businesses has no insurance cover
A recent report from the Insurance Council of Australia showed that the prevalence of non-insurance or underinsurance in the Australian SME sector was approximately 12.8 per cent.
Ben Hastie, Managing Director of Resilium Insurance Broking, suggests underinsurance is a big problem for small businesses.
“There are some small businesses that either do not have any insurance at all, or have inadequate sum insured coverage,” he says.
“Obviously, having no insurance is a major risk, but some business owners look to save money by having cheaper insurance premiums, but the danger in this is that the lower the premium, the narrower the cover.”
Taking the cheap option could mean lower costs in insurance premiums but at the risk of having a policy to protect your interests should disaster strike.
Review your Insurance needs regularly
Even if your business doesn’t change much over time, it’s still very likely that the space in which it operates has changed.
For example, a few years ago malware attacks and data breaches weren’t something SMEs had to worry so much about. Today however, ransomware attacks and Cyber-crime is on the increase, targeting businesses of all kinds, small and large.
“It’s important to update your Insurance Adviser with any important changes to your business, whether it’s taking on new clients, hiring new employees, moving premises or buying new equipment,” says Hastie.
How we can help
As a qualified and Authorised representative of Resilium Insurance Broking, we have the knowledge and expertise to carefully examine your business’ level of risk and provide professional insurance advice.
Talk to us today so you can have peace of mind that your property and assets are adequately insured should the worst-case scenario take place.
References
[1] Rice Warner, Australias-relentless-underinsurance-gap, 2016.
[2] Insurance Council of Australia, 2015-non-insurance-in-the-small-to-medium-size-enterprise-sector.
The information provided in this article is of a general nature only and has been prepared without taking into account your individual objectives, financial situation or needs. If you require advice that is tailored to your specific business or individual circumstances, please contact us directly for a confidential discussion.
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