As a business owner, protecting your business assets is a priority. While many businesses may feel confident in their insurance decisions, the reality is, that without professional guidance, they could be leaving themselves vulnerable to underinsurance – a risk that often goes unnoticed until it’s too late.
What is Underinsurance?
Underinsurance occurs when an insurance policy fails to adequately cover all potential losses, leaving businesses exposed financially. According to industry expert, Luke Eagle, Aviso Broking Head of Corporate and Specialty, underinsurance poses a significant risk to Australian enterprises, with the Insurance Council of Australia mirroring this sentiment.
What are the impacts of underinsurance?
Insuring physical assets is often the first thing that come to mind, but this may not suffice in the event of a disaster. While a policy might cover damage from incidents like fire or theft, it can overlook broader financial ramifications such as business interruptions and the additional expenses incurred during downtime.
The aftermath of events such as fires or storms, can result in not only physical damage, but also operational disruptions and financial burden, including ongoing expenses like payroll and bills. Without comprehensive coverage, business owners’ risk being underinsured, exposing themselves to unforeseen costs that could potentially cripple their operations.
How can you ensure you have adequate insurance in place?
Recognising the signs of underinsurance is the first step towards mitigating this risk. Business owners should regularly review their insurance policies to ensure they accurately reflect their current circumstances, including any changes in business size or assets. Additionally, it’s important to consider factors like inflation when determining the sum insured to account for rising replacement costs.
Our team of licensed advisors at Aviso Broking are equipped with the knowledge and expertise to assist with reviewing each client’s unique risk profile. By working with our team, you can gain valuable insights into your insurance needs.
While the information provided in this article offers valuable insights into the risks of underinsurance, it’s important to consult with a professional advisor so you can make an informed decision and ensure you have policies in place that will meet your needs.
Contact Aviso Broking today to arrange a review of your current insurance arrangements.
Disclaimer:
This general information does not take into account your specific objectives, financial situation, or needs. It is also not financial advice, nor complete, so please contact us to discuss whether these types of insurance are appropriate for you. These types of insurance are issued by various insurers and can differ. Coverage is always subject to the policy terms
and conditions. Deductibles, exclusions, and limits apply Copies of Product Disclosure Statements/Policy Wordings can be provided upon request and should be considered before deciding if this insurance is right for your business.
Aviso Broking Pty Ltd – ABN 44 010 468 818 – AFSL 239041
