Your insurance checklist

Your insurance checklist

With the end of the financial year fast approaching, it’s a good time to check-in with whether your insurance is up-to-date. 

Pushing back a review could leave your business underinsured and if you need to make a claim, this could put you in a dire financial situation.

Scheduling in time for an annual review is a great place to start. But assessing your insurance after internal changes during the year puts your business in the best possible position.

New equipment

If you have disposed of redundant machinery, it needs to be removed from your detailed inventory or tax depreciation schedule. Alternatively any new machinery would need to be added to ensure lists are up-to-date.

When machinery breaks down, plant and equipment insurance gives you peace of mind. Having equipment repaired can be costly, while also taking a long time. This is further complicated if it needs to be transported to do so. One issue businesses have also run into lately is having parts help up in supply chain delays.

Disruption can be minimised with cover for:

  • Breakdown
  • Material damage, including for loss, damage, destruction or theft of physical assets, accidental overload and more
  • Hired-in plant, which may be a condition before you can hire it

Moving/changing office

Moving or changing offices can involve a lot of time, money and energy. If you have recently moved, you may not have gotten around to updating your insurer.

After a move it’s important to keep your insurer in the loop by providing details about the construction and age of the building, and security and fire protection details.

Those that are yet to fully move but have taken control of the new premises will need to insure both sites. A broker can confirm whether your policy covers items while they’re in transit. If you choose to go ahead with transit insurance, ensure you carefully read the fine print and understand the excess requirements.

When moving to rented premises, check your lease agreement to make sure the owner has transferred insurance responsibilities to you. As a renter, you will also likely need to insure glass, air-conditioning systems and the internal fit out yourself.

But even if the landlord insists you insure the building itself, we would advise against this.

Staff fluctuations

Extra employees need to be accounted for in your insurance as your business grows, such as for workers’ compensation insurance. When doing this, it’s also a good idea to revise your deferred compensation plans, key-person strategies and buy-sell agreements.

Have you undergone changes such as expanding from a small to medium-sized enterprise or adjusting your business structure? These types of insurance could be worth looking into as well:

  • Directors’ and officers’
  • Business interruption
  • Cybersecurity
  • Public liability
  • Employer’s liability if you employ one or more people
  • Marine insurance for products you import
  • Professional indemnity

Evolving services

As your business changes over time, your services and products will likely follow suit. Protecting your sustainability requires having suitable insurance, whether it’s compulsory or preferred based on your day-to-day operations. 

Insurance can protect your business if your products cause:

  • Death or injury
  • Emotional distress or a psychiatric illness
  • Property damage
  • If the product fails or is unsafe.

The law considers you the ‘manufacturer’ of a product if you import it and there’s no manufacturer’s representative of that product in Australia.

Visit business.gov.au for more information about the cover your business might need.

Change in revenue

There could have been an increase in your business’ revenue if you had gotten more stock, or expanded your services or product range. If there are any drastic changes, this will need to be reflected in your insurance. 

A prompt policy review can help ensure you have appropriate cover for your current turnover. When there is a variance between the insured amount and actual turnover, this could leave you out of pocket if you need to make a claim.

To find out more about adjusting your policy to better suit your business’ current needs, get in touch with your insurance advisor. We can work with you to make sure you get the appropriate level of protection.

Disclaimer

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.

How to appeal a rejected insurance claim

How to appeal a rejected insurance claim

When you thought you were covered for a loss, having your insurance claim rejected can be devastating.

But even after receiving this bad news, you do still have options.

It is possible to appeal the decision. In situations like these, having a good broker by your side can be incredibly valuable.

The reasoning for the rejection will influence how you appeal. 

In some cases the claim is rejected based on the wording, which generally means it falls outside of the operative clause or because an exclusion applies. 

The alternative is that it’s a factual issue. An example would be if the owner claims their home was damaged by a storm, but the insurer argues this was from gradual deterioration.

1. Broker advocacy

A broker can advocate for a person who has had their claim rejected.

If you’re in this position, it’s advised that you get the broker’s opinion on what to do moving forward. They can assess the situation and determine whether there are any grounds to challenge the rejection.

When there has been a factual issue, the broker can assist with finding factual evidence, reports and documentation to support your claim. The broker won’t personally go out and look at these things, but they will use information such building reports.

For exclusion-related rejections, a broker can leverage their technical expertise to determine whether the wording could be argued.

2. Internal dispute resolution

If your first attempt falls short, there is still the option to pursue things further. At this point, your broker can request to launch a formal internal dispute resolution process with the insurer.

The insurer is then legally required to review the decision within 30 days. After taking another look at the claim, some insurers decide to overturn the original verdict.

If internal dispute resolution is unsuccessful, the insurer must provide reasons explaining why this has been the case. 

During this process, your broker can still advocate for you and your claim.

3. External dispute resolution

If the internal dispute resolution process doesn’t lead to the outcome you were hoping for, another route you can take is pursuing an external scheme.

The Australian Financial Complaints Authority has been responsible for handling disputes over rejected insurance claims since 1 November 2018.

But it is important to note that AFCA only has jurisdiction over particular insurance products. An array of criteria must also be met, which can be discussed with your broker.

4. Court proceedings

Some situations will not come under the jurisdiction of AFCA, which is when legal proceedings would need to be launched to take your case any further. 

To make a claim, you need cover

Making a claim relies on first having suitable insurance. It’s hard to believe, but in many cases people will attempt to make a claim when they aren’t insured. In other instances they are insured in one area, but try to make a claim where they are not.

We can work with you to make sure you get the appropriate level of protection. To find out more, get in touch with your insurance adviser.

Disclaimer

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.

The aftermath of the NSW and Queensland floods: Are insurance premiums set to rise?

The aftermath of the NSW and Queensland floods: Are insurance premiums set to rise?

Photograph: Natalie Grono/The Guardian

Australia’s east coast was recently hit hard by severe weather. Over the past few weeks, many residents have been returning home to assess the damage to their flood-affected properties.

According to Insurance News, insured losses from this event are estimated to be sitting at $3.99 billion. This makes it Australia’s largest flood loss on record.

Residents from Brisbane, Lismore, Sydney and Penrith have been left to navigate the devastating aftermath. Already more than 96,000 claims have been made, 80 per cent of which were for homes.

As insurers handle the influx of claims, they are moving customers in the most severe situations to the front of the line. This has been done to make sure they can get back on their feet as quickly as possible.

For less severe claims though, people may need to wait a couple of weeks to begin the assessment process.

So far, 69 per cent of the flood-related claims have come from Queensland, while 31 per cent have been from NSW.

What will be the future impact?

Catastrophes are becoming increasingly commonplace. As their frequency goes up, we could see insurance premiums follow suit. 

Though currently, it’s too early to say what the exact impact on premiums will be.

Insurance companies have reinsurance, which is a cover they purchase to protect against insolvency. When these types of events happen, the cost of reinsurance can be impacted. This can subsequently drive up the cost of insurance.

It is also possible that people who don’t live in flood-affected areas could see their premiums rise. So regardless of where someone lives, it’s important to compare a range of home and contents insurance policies to find the best deal.

Think of when you are doing some building work for example. In these instances, people are always encouraged to get at least three quotes to compare. Insurance quotes can also vary a lot between providers and looking at a few options can help you determine which will be the right fit for you.

It’s also worth checking whether flood damage is included in your policy, because it is often optional cover that is provided for an additional fee.

Next steps if your home has been impacted

If your home has been impacted by storms and flooding, it’s recommended that you take photos and videos of the damage before starting any clean-up efforts. This can be used as evidence when you are making your claim.

It is also advised that you hold onto samples of materials and fabrics. These can be shown to your insurance assessor. Any water-damaged goods that could pose a health risk, including carpets and furniture, can be removed though.

Depending on the extent of the damage, there may be a few items that could be repaired or salvaged. These should not be thrown away.

When inspecting your property, it’s a good idea to keep a list of all items that have been damaged, with detailed descriptions and serial numbers if possible. 

Make sure to speak with your insurer before authorising building works, such as emergency repairs. Not all insurance policies will necessarily cover unauthorised work.

Get in touch with your insurance adviser for more information. We can work with you to make sure you get the appropriate level of protection.

Disclaimer

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.

The cost of insurance is changing, here’s why

It’s been a challenging few years, from natural disasters like bushfires and floods to navigating the COVID-19 pandemic. While all of this pushed insurance prices up, things are looking up and we’re seeing premiums start to stabilise.

The costs for insurers rise

KPMG Australia found that gross written premium – which is the total value of the policies insurers write minus costs such as stamp duty – went up by 5.9 per cent in 2020.

There were various reasons behind this, such as the lower-than-usual demand for compulsory third party (CTP), travel and employers’ liability policies. 

The significant premium increases reflected these drastic changes in the market. While they are stabilising now, many small businesses are still paying a relatively high price for certain insurance types. 

Those in the building industry would be familiar with this if they have recently tried to take out affordable public liability cover. Many business owners have also seen the increase in prices for property insurance, commercial property insurance and professional indemnity insurance firsthand.

If you are in this position, talking through your options with an insurance advisor could help point you in the right direction.

For businesses finding it difficult to get cover, another option is to implement a different type of risk management, known as a mutual. This approach comes with its benefits and holdbacks – while providing an alternative for getting protection mutuals also have discretion around paying claims.

Before moving forward with this option, it is important to ensure you are well versed in how mutuals work.

There can be some waiting involved when making a claim with mutuals. So if you are a small business and rely on a swift payout from your insurer to get operations back up and running, they may not always be well suited to your needs. Though if you are a larger business – with more resources to continue trading while waiting for your sizeable claim to be paid – this option may be more viable.  

There is a myriad of options available, and an insurance advisor can assist you in finding those that are a good fit for your business’ needs. If this article has brought up any queries about your cover, get in touch with your insurance adviser. 

We can work with you to make sure you get the appropriate level of protection.

Disclaimer

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.

Preventing theft, intrusion and malicious damage at your commercial building

How secure is your business’ premises? For all businesses with a physical site, property damage, intrusion and malicious damage are ongoing risks, and these incidents can cause significant disruptions and costs.

Avoiding unauthorised access starts with the development of a robust security plan, which is used to proactively mitigate risks and subsequently protect your business from break-ins and damage.

Malicious damage ranges from vandalism to arson and while claims for these incidents are usually less common than those for theft, the value is often much higher. While replacing stolen goods can be relatively straightforward at times, replacing a building due to malicious damage can be far more costly, while also oftentimes leading to business interruption and reputation damage.

Whether or not a commercial building is occupied, avoiding serious damage relies on keeping people from being able to enter. 

The three levels of security management

Security at a commercial property can be broken into three different areas: the site and perimeter, the building itself, and the goods within the building.

Securing your business’ site and perimeter is the first level of protection. It is used to help you keep would-be intruders from being able to reach the building and can include measures like fences, gates, bollards, turnstiles, boom gates and security patrols.

While these efforts reduce the likelihood of an incident, they aren’t all necessarily realistic for every business. But taking steps to make the building as impenetrable as you can – where possible – is still incredibly important.

Even if you don’t have a site perimeter, there are various options for making sure the building itself is secure. This includes installing intruder alarms, robust locks, barred or shuttered windows and doors, reed switches and keycard access.

These measures are the next best option for businesses that are unable to keep unwanted visitors off their site completely.

The last layer is commodities – which includes a business’ stocks and assets – and is all about reducing exposure. The approach for protecting commodities will differ from business-to-business, depending on the nature of their operations.

An example of this would be using safe and strong rooms for protecting any cash held on-site. If the commodity is larger, there may need to be more consideration around the general location, as well as possible relocation methods.

A business can also benefit from ensuring they have additional layers of security inside the building to further deter theft or burglary. This could involve making sure valuable goods are stored in secured areas that are harder to reach, rather than near external access points.

Deciding which security is right for your business

A security partner can advise your business on which products and measures to implement, monitor the premises and respond to incidents. This can be invaluable for protecting your business against theft, intrusion and malicious damage.

Through working with a reputable provider that has robust and proven response mechanisms in place you can give your business the best chance at avoiding or minimising the impact of an incident.

It is important to know how the monitored systems on your premises are managed, such as alarms, as there is a range of approaches that can be used and not all will be reliable for every situation. When systems have redundancies set in – for example more than one communication link and backup power – this can be a great option.

When choosing a security partner, it is also a good idea to make sure you fully understand how their procedure for responding to incidents. For instance will they contact the police, alert management or personally attend the site?

Commercial property security and protecting your business

All too often commercial property security is taken for granted – until an incident occurs and it’s too late. Taking proactive measures to mitigate risks and protect your business can help reduce the likelihood of a potentially devastating event.

For more information, or if this article has brought up any queries about your cover, get in touch with your insurance adviser. We can work with you to make sure you get the appropriate level of protection.

Disclaimer

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.

How prepared are you for extreme weather?

Australian’s are no stranger to extreme weather events. Bushfires, drought, flash floods, severe storms and earthquakes are all examples of what we have endured over the years.

While the risk of extreme weather and natural disasters is ever-present across the country, many of us are still largely unprepared. According to research from QBE*, which looked into the behaviours and attitudes of over 1,000 Australians, a quarter of Australians believe they are prepared or very prepared for events of this nature.

The vast majority of participants – close to three quarters of those taking part – said they were unprepared or only somewhat prepared.

By taking suitable measures to get prepared ahead of time, many people have the opportunity to minimise or fully avoid having their property damaged or destroyed by extreme events. 

28 per cent of respondents said that of all severe weather events, they are most worried about storms. This comes as no surprise, given the significant impact hail activity and extreme storms have had in communities time and again.

Northern New South Wales, southern Queensland, inland Western Australia and the tropical north are all high-risk areas for this type of weather activity.

Ahead of this summer a La Niña event was declared by the Australian Bureau of Meteorology (BOM) – which was projected to further increase the risk of flooding and flash flooding. 

Between December 2021 and April 2022, when compared to usual periods, the risk of tropical cyclones was also anticipated to rise by 65 per cent. While tropical lows do not necessarily always lead to cyclones, they can still cause storms, flooding, damaging winds and more rainfall.

Many regions have seen significant grass, crop and shrub growth following recent rainfall. As temperatures remain high, this growth can also make such areas more prone to bushfires.

One in four Australians is affected by a severe weather event or natural disaster, most commonly hail, storms or bushfires. But many people still believe it will not happen to them.

Each year tens of thousands of people are directly impacted by these types of events, and insurers respond to the large number of claims that follow. 

Across QBE property claims these catastrophe claims account for 37.1 per cent of the total cost incurred. This paints a clear picture of the true extent of the damage done in such circumstances, where people often require funds for extensive repairs and temporary accommodation.

Depending on the extremity of events, people may be forced to cover the cost of thousands of dollars worth of damage, or even rebuild entirely. While insurance can help cover costs, experiencing this type of incident can also understandably lead to significant emotional and psychological distress.

If you have never experienced a disaster firsthand, it can seem like an abstract risk. Though they do happen – often without warning – and it is the events that surprise us that usually do the most damage.

Even those living in lower risk regions stand to benefit from taking proactive and preventative measures to ensure they are prepared ahead of time, as we have seen time and again that disaster events can happen in any part of Australia.

Most Australians have home insurance (96.1 per cent), though only 41.6 per cent are confident that the amount their home is insured for is enough, QBE research found. Similar to this, only 43.1 per cent of those with contents insurance are confident their insurance would sufficiently cover the replacement value of their belongings.

For more information, or if this article has brought up any queries about your cover, get in touch with your insurance adviser. We can work with you to make sure you get the appropriate level of protection. 

 

*Polling study of 1,009 Australians, aged 18-65, completed for QBE Insurance Australia in October 2021

Disclaimer

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.

Is your business making these insurance mistakes?

If you need to make a claim, having suitable insurance in place will help you get back on your feet. The problem is, many businesses go to make a claim only to realise they haven’t got the right policy for their needs.

In some cases a business is underinsured – meaning they don’t have a suitable level of cover – and in others their policy isn’t appropriate for their situation.

When you’re getting insured, here are some common mistakes to avoid.

1. Underinsurance

When companies are underinsured, their sum insured is inadequate. 

An example of this is having cover for a $1.5 million building, when it’s realistically worth $2.5 million. When a claim is made, the insured can only claim $1 million, so they will not be provided with the funds they need to rebuild a building of the same quality.

Similarly, if only a proportion of the building needs to be repaired, an underinsured business may receive a fraction of what they actually need. The difference could be hundreds of thousands of dollars, and leaves a significant financial burden on the company.

In other instances an underinsured business may have no cover at all, or have gaps in their cover. The latter could mean the building itself is insured, but there is no business interruption insurance.

Addressing underinsurance starts with getting your building value right, which can be particularly difficult for those with high value or complex structures. If you’re not sure how to determine an appropriate sum insured, you may opt to get assistance from a valuer or builder.

There’s also the option to speak with your broker, who can help point you in the right direction.

2. Risks aren’t appropriately assessed

As a business, you need to have a formal risk assessment process. Not only that, but it must be reviewed and updated regularly, such as quarterly, because risks are always changing.

Risks can often be categorised into four groups – operational, strategic, regulatory and reputation – but this isn’t a rigid approach and can be catered to your needs. Many businesses also benefit from engaging a surveyor, who can formally assess different types of risk on your premises.

After identifying risks, mitigation strategies that specifically target each threat need to be developed. This reduces the chance risks will become real issues.

3. Taking out the wrong type of cover

While they take out insurance, it isn’t until they go to make a claim that many businesses realise they don’t have the right cover in place and aren’t adequately insured.

Keeping employees safe while they’re working overseas could be one example of an oversight. The Australian federal government’s Smart Traveller website gives businesses information about what they should be doing. A detailed emergency response plan is a must, as is taking personal safety precautions, just to name a few examples.

Whether employees are in the office or travelling overseas for work, businesses have a duty of care to ensure they’re safe.

For more information, or if this article has brought up any queries about your cover, get in touch with your insurance adviser. We can work with you to make sure you get the appropriate level of protection.

Disclaimer

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.

Getting back into the office post-COVID: What you need to know

As COVID-19 vaccination rates continue to increase across the country, many businesses are slowly bringing staff back into the office.

During this process though, it’s important to implement a well-thought-out plan that complies with WHS obligations and is designed to protect employees.

Since pre-pandemic times, the requirements of a workplace environment have changed drastically. Now, organisations need to ensure they have sanitisation stations, cleaning rosters and rules for wiping down desks.   

If you’re transitioning staff back into office spaces, the Safework website is a great place to start. Rules can differ from state to state, and understanding your specific obligations – while also staying up-to-date on any changes – is a must.  

How employees travel to and from the workplace

One of the biggest obstacles employers are facing is transportation to and from work, given many employees use public transport.

Whether employees are catching a train, tram or bus, they may be required to follow certain health guidelines. Social distancing and wearing a mask are two examples.

While there’s the option to use public transport, some staff may still be hesitant due to concerns about contracting COVID-19. In these instances businesses may instead consider providing extra employee parking, or offering to cover the cost of alternatives such as Ubers or taxis.

Taking such measures shows highly anxious employees you’re willing to support their return to the office, and also puts their minds at rest.

What about insurance?

If an employee contracts COVID-19 and alleges it is work-related, what happens?

For a worker’s compensation claim to be successful, the worker must establish that they have suffered an injury, that it was sustained while they were working and their employment contributed significantly to the outcome.

In New South Wales, the majority of pandemic-related claims have been from staff with psychological injuries like anxiety and feelings of isolation. While the worker hasn’t returned a positive test for COVID-19, they are experiencing mental illness because of the distress it has caused.

As an employer making weekly workers’ compensation payments to an employee who’s been stood down because of coronavirus, there are a few things to consider. Rather than calculating payments based on what was happening pre-pandemic, you need to consider the current situation. It’s also worth noting that Job Keeper payments constitute earnings.

Some employees may not want or be ready to return to the office. Employers will need to think about how best to support these staff. Even as COVID-19 becomes less of a risk, employees may prefer to make hybrid work arrangements, where they work in the office some days and spend the remainder of the time working remotely. If this is the case at your business, you’ll need to look at updating any policies relating to working from home.

For more information, or if this article has brought up any queries about your cover, get in touch with your insurance adviser. We can work with you to make sure you get the appropriate level of protection.

Disclaimer

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.

Keeping your business safe this fire season

As we navigate another fire season, here are some simple and cost-effective tips for keeping your small business safe.

Smart alarms and detectors

When you’re in the workplace, traditional smoke alarms are a great way to alert you of an issue. But what about when you’ve closed your doors for the night?

With smart smoke alarms, business owners receive real-time alerts. If there’s an incident unfolding, you can be alerted via your smartphone.

The built-in measurement technology can differ between designs. In some cases, the smart alarm provides you with video and information about carbon monoxide, occupancy, heat and humidity. All of this helps you determine the type of fire.

Smart alarms can then fight the fire by activating or deactivating other Internet of Things (IoT)-enabled devices at the location. This can be done whether the fire is on your commercial premises or at a warehouse.

While these devices are more expensive than conventional alarms – with a usual starting price of about $170 – they often help put your mind at rest. Not only this, but they could save you thousands by preventing serious smoke or fire damage.

Smart devices, plugs or outlets

Have you ever gotten home, then realised you might have left something on at work?

When appliances are connected to the IoT, you don’t need to worry about the device sparking a fire – and you can save yourself the trip back to the office to check. Instead you can use your smartphone to reprogram or turn off devices.

But you may have some appliances that aren’t connected to the IoT, what then? Older devices can be plugged into smart outlets, which means you can remotely switch them off or on.

Traditional fire extinguishing methods – such as sprinklers – can be optimised through the IoT as well. While conventional sprinklers are effective for helping control fires, they also have the potential to cause a fair bit of water damage.

With smart sprinklers though, you can use different extinguishers based on the situation – whether that’s mist, gases or chemicals. Based on data, this will be deployed in a targeted area, minimising any unnecessary damage.

Passive fire protection systems

With passive fire protection systems, businesses can control and reduce the impact of fires. 

While there are minimum levels of protection – as detailed by the Building Code of Australia and other Australian Standards – there are further steps you can take to keep your business safe this fire season.

If you’re planning maintenance or renovation in the coming months, it’s well worth thinking about how to incorporate products that could help improve your business’ level of fire safety. From intumescent coatings and sealants to fire-rated ducts and doors, there is a myriad of products available.

Getting insured this fire season

While there are plenty of preventative measures we can take to control fire and minimise the impact, sometimes it’s out of our hands.

In some cases precautionary measures reduce the impact, but the business still sustains a level of smoke and water damage.

This leaves business owners not only facing the cost of rebuilding, but also puts a pause on their profits until they’re back up and running.

At these times, business insurance and business interruption insurance can help you get back on your feet faster. They also remove some of the financial burden of doing so.

Are you using new technology that relies on the IoT? If you are, it may also be worth considering cyber insurance.

For more information, or if this article has brought up any queries about your cover, get in touch with your insurance adviser. We can work with you to make sure you get the appropriate level of protection.

Disclaimer

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.

Minimise bad business debts: Here’s how

Bad money management – regardless of whether you’re at fault – can leave you wondering where it all went so wrong. Taking precautionary measures ahead of time is the best way to avoid debt becoming an issue down the line.

1. Credit checks

Before getting a new client, credit checks are a relatively simple and quick way to assess their ability to pay you.

While it isn’t particularly well known, Australian companies can access a company or individual’s credit history. Extensive real-time information and databases can be viewed through Equifax’s Business Credit Express or Illion Express.

When it comes to verifying information about a business you are considering working with, ASIC Business Checks app is the place to go.

2. Invoice properly

How can you be sure you’re sending out invoices correctly? A great source is the Australian government website, which details how to create an invoice, what you need to include, the different types of invoices and similar.

Equally as important as knowing how to invoice is keeping solid records of what invoices have been paid. SMEs across Australia are collectively owed $26 billion, and nearly three-quarters of all business invoices are paid late.

Selling products on a credit basis exposes businesses to even more risk. And if enough customers fail to pay, this could significantly impact your business’ ability to operate. One way to protect against this is trade credit insurance, which could prevent your business from grinding to a halt as you wait for payments.

3. Debt recovery

Resolving enduring payment issues through debt recovery is usually a situation you would rather avoid. But by following an effective process, you can hopefully achieve a good outcome sooner.

The first step – as advised on the Australian Government’s Business website – is reviewing the terms of your contract and the stipulated payment conditions. Then send an initial friendly reminder and several follow ups, which eventually lead to a formal letter of demand.

If you reach this point and all efforts have failed, you may want to contact a debt collection agency or service. This is usually a last resort, as it will often lead to a breakdown in the relationship between your business and the involved client.

4. Scam alert

For some time scammers have been impersonating businesses, sometimes claiming that clients must pay a recent invoice into a new bank account. The account is that of the scammer, which leaves the business and client out of pocket.

Preventing these incidents can be difficult, but relies on maintaining good relations with your clients. They need to be well informed on how your business operates – specifically that you will never change your payment details via email.

With technology becoming a fundamental part of how many businesses operate and a rapid increase in digital scams, many organisations find peace of mind in cyber insurance.

5. Insurance options

While there are plenty of preventative measures that can be taken, there is always still some level of risk when operating your business.

Inadequate cash flow and debts could hold your business growth back and even lead to insolvency. Insurance protects against this, so you can get the financial support you need when you need it most.

For more information, or if this article has brought up any queries, please don’t hesitate to get in touch with your insurance adviser.

Disclaimer

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.