Identifying new contract business risks, and what to do about it

Signing a new contract can be both exciting and unnerving.

Most people who start a new partnership or business venture are very careful to do their research and make sure that their new contract does not contain any loopholes or potential legal ‘bombs’. But what about your insurance policy? Will it protect you under the terms of your new agreement?

If your business is expanding or going in a new direction, your insurance broker can act as a consultant to assess your risk.

Business insurance

Whenever your business activities change, so do your risks. Every time you enter into a new contract, you’re legally obligated to perform whatever commitments are prescribed in your agreement, no matter how costly, challenging, or risky they are. As a result, it’s highly-recommended to regularly update your insurance policy and consult with your insurance broker before you decide to sign a new contract.

Insuring against the unknown

When you begin a new project, it can sometimes be difficult to predict what will happen in the future. Without years of experience to draw on, when you sign a new contract you might be exposing your business to a range of risks that you’re not even aware of.

For example, do your new business activities put you at risk of:

Make sure you’re properly covered

In the same way that you would review your car insurance if you were to downgrade or upgrade to a new car, an increase in employees or a new business partnership also warrants an insurance review.

Have you recently signed a contract for a new business premise? Did you make an agreement with an equipment hire company? Give your insurance broker a call.

New contracts and company growth can leave you underinsured. The insurance policy that you agreed to a year ago may no longer be suitable, and underinsurance can you leave you open to lawsuits, financial hardship, and even business closure. Worst case scenarios can have you signing a contract with contains a hold harmless clause. In this scenario, you may end up triggering an exclusion in your policy which results in you not having insurance at all!

Are you looking for an experienced insurance broker? Call AllSafe on 1300 908 404, or send us an online enquiry today!

General Advice Disclaimer

The information in this article is to be regarded as general advice. Your personal objectives, needs and financial circumstances were not taken into account when preparing this content. We recommend that you consider the suitability of this general advice, in respect of your objectives, financial situation and needs before acting on it. You should obtain and consider the relevant product disclosure statement and Financial Services Guide from Allsafe Insurance Brokers before making any decision to purchase a financial product.

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