Australia’s biggest business insurer, CGU has recently released information on the 5 most common small business claims. The report examined their Business Pack claims and identified Theft & Burglary, Storm Damage, Property Damage, Machinery & Equipment Breakdown and Liability as the biggest risks to Australian businesses.
To avoid unnecessary cost and potential disruption to your business you should try to minimise the chances of these losses occurring . By knowing these common business risks, you can take steps to minimise your risk exposure.
1. Theft & Burglary
In order to prevent a theft or burglary on your premises it’s important to make sure your business is as protected as possible. There are several ways that you can do this. First and foremost, you should ensure you have fixed security systems in place as well as lighting in exterior and interior areas in order to deter trespassers. Ensure your business is not an easy target for thieves by securing all doors, windows and other access points when the business is unattended. Anti-theft policies should be put in place and all employees educated on these processes.
2. Storm Damage
Storm damage is a huge cause of insurance claims for Australian businesses. While you can’t control the weather, there are certain things that you can do to protect your business from this risk.
It’s important to understand the geography of your area, specifically considering storm damage risks such as the proximity of surrounding trees, and elevation for storm water run-off. Drainage systems should be maintained and cleared of all material that may have built up over time While the geographical location of your business may not be easily changed, if you are aware of potential dangers you can reduce the chance of a storm having a severe impact on your business. For example, any overhanging tree branches should be trimmed back, other loose objects should be secured, and outdoor equipment should be anchored.
3. Property Damage (Accidental & Malicious)
Property damage, both accidental and malicious, can result in significant costs to your business. The best ways to protect your business from this risk are similar to the above suggestions, in terms of ensuring your business is secure and in good repair. To ensure the continuing operation of your business, it’s important to maintain your premises and proactively repair any small issues before they become bigger ones. Waste material should be removed from the premises and not left to build up against an exterior wall.
4. Machinery & Equipment breakdown
The majority of businesses these days rely on certain pieces of machinery and equipment in order to operate effectively. When these items do not work properly, it can have a significant impact on the business.
In order to minimise the risk of your machinery or equipment breaking down, you should be proactive in implementing regular checks and ensuring maintenance is up to date. All equipment and machinery should be properly stored, with electrical connections clear of dust and obstructions. Remember that all pieces of equipment should only be used in the way they were intended, and should only be operated by experienced and trained operators.
Liability claims are some of the most unpredictable and distressing claims that a business may face. They arise as a result of a third party sustaining injury or property damage from an activity associated with your business. These situations are difficult to plan for and can be catastrophic in terms of impact. Minimising risk can be difficult, however there are certain steps that you can take to reduce the risk of a liability claim. Ensure walkways and floors are kept dry and clear of tripping hazards at all times with adequate lighting to prevent slips, trips and falls. Furthermore, any dangerous areas of your business should be restricted to the public. This includes places that house machinery or hazardous materials. You should also have systems in place to ensure you and your employees handle clients’ property with care and diligence.
While all business owners should consider the above steps, a comprehensive business insurance policy can ensure your business is adequately protected. Speak to your insurance advisor to ensure that you have the right cover in place.
Conditions apply for each policy and the information expected from you for a policy to trigger. Coverage may differ based on specific clauses in individual policies. Please ask your broker to explain the additional benefits and exclusions pertaining to your policy.
The information provided is general advice only and does not take account of your personal circumstances or needs. Please refer to our financial services guide which contains details of our services and how we are remunerated.