Keeping your Business Insurance pack updated as you work differently
So, you’ve taken out a Business Insurance pack and are feeling confident your business’s assets and property are insured. A Business Insurance pack is designed to protect your tangible assets and equipment, but just like any other insurance policy, it needs to be reviewed and updated on an ongoing basis to ensure the cover is still relevant and in line with your business’s needs. Insurance documents can be confusing, so we’ve broken down the steps you might want to take to ensure your Business Insurance pack is kept up to date. Here are a few things to check on your insurance documentation.
Is your named insured correct?
Sounds like one of the simplest aspects of an insurance policy, but it’s also surprisingly one of the easiest details to get wrong. Why is it so important? In a nutshell, if the named insured is not the correct legal, you could be left uninsured. In the case of insurance for a business, the Named Insured can be a sole-trader name or the legal entity name that corresponds with your ABN (which is often quite different to the business name or the trading name). Examples of mistakes include forgetting to add ‘Pty Ltd’, using the business name or trading name without including the legal entity name or even leaving the company name off altogether, and insuring under your personal name instead. If you own the building you operate from, be sure to check the of the correct owner are also included as Named Insured.
Has anything changed in your business?
Under most insurance policies, you are required to inform your broker of changes to your business. Certain changes may require you to update your insurance, or even take out a new policy altogether. Changes to note can include relocating, acquiring additional assets, changes to the ownership/insured name, a change in the business’s activities or even a sudden increase in revenue. Not informing your broker of certain changes to your business could cause unnecessary complications in the event of a claim, or could lead to a claim not being covered altogether.
Is your sum insured correct?
When insuring your business’s tangible assets, you will generally be required to insure for ‘new replacement value’. This means the nominated sum insured must reflect the cost of replacing all your assets brand new, for the same make/model and capacity. Business Insurance packs typically contain an underinsurance clause, so if you do not insure your assets for ‘new replacement value’, in the event of a claim, the amount covered may be reduced and you may be at risk of financial loss. In some circumstances, underinsurance can be disastrous for the insured, resulting in them being unable to rebuild or having to refinance, so the time you take to consider the new replacement value of your assets could make all the difference.
Has your business’s equipment changed?
In addition to paying extra attention when calculating your sum insured, it’s also important to review it each year as your business’s circumstances change. For example, if you’ve carried out renovations, upgraded or purchased new equipment, your Business Insurance pack and the sum insured will need to be updated to reflect this. This also applies to how you now use your equipment. For example, if you are now taking certain equipment or items away from your office which you previously did not, then it is a good idea to notify your broker to ensure they will be covered if they lost or stolen while outside your office.
Do you need additional cover?
Business Insurance packs are typically packaged policies where you choose from several different cover sections. But the sections of cover you choose also may need to be reviewed and updated from time to time as you make changes to your business. For example, you might start off your business as a purely mobile service, but down the track grow your business enough to rent your own premises. In this case, you may need to consider additional cover sections such as Business Interruption, Theft and Contents.
Importance of keeping your cover up to date
When running a business, keeping your insurance up to date might not be the first thing that comes to mind, but it is an important step in preventing delays or hassles if you have to make a claim. Good insurance housekeeping involves thoroughly checking your insurance documents and ensuring all the details are correct, reflecting your business’s current circumstances. Staying in touch with your broker and notifying them of any changes to your business is also a wise step in keeping
your business protected.
Aon is a leader in risk and insurance and provides a range of insurance solutions for psychologists. As the preferred insurance broker to the Australian Psychological Society, Aon is proud to provide cover for APS members and our number of clients continue to grow. If you’d like to find out more about Aon or get a quote, please visit aon.com.au/aps, call 1800 805 191 or email [email protected]
This information is intended to provide general insurance related information only. It is not intended to be comprehensive, nor does it, or should it (under any circumstances) be construed as constituting legal advice. You should seek independent legal or other professional advice before acting or relying on any of the contents of this information. Aon will not be responsible for any loss, damage, cost or expense you or anyone else incurs in reliance on or use of any information contained in this article.