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Small Business Insurance - Do you have the basics?

By Peter Vickers Insurance Brokers | business, small business, Insurance, small business insurance, insurancethebasics |

The Basics

“Every business has very different exposures – make sure yours has the right cover”

Small Business Insurance is complex, the fundamental concepts that underpin most business insurance policies are scope of cover and insured values.

An insurance policy has a number of different parts. The policy sets out the covers which apply and these include conditions you must comply with and also details exclusions. Every insurance policy includes these conditions.

Scope of cover: explains the policy’s scope to protect the business against loss or damage to the building in which it operates and its contents or stock. This can include policy conditions, e.g whether you are required to have fire extinguishers and burglar alarms that are switched on when the premises are not occupied.

“The business interruption section of the policy will also include information about indemnity periods”

Why are these important? Because indemnity periods tell you when and for how long your cover lasts!

 A broker can make sense of the fine print and offer guidance about the level of cover that’s right for the business.

 What is an indemnity period?

It is the length of time the insurer will make up the loss of profit or revenue as a result of an insured event such as fire or storm etc. This time span will depend on the nature of the business being insured and the value of the cover versus the price of the premium.

There are many things to consider for an indemnity period for example – do you need a specialised piece of equipment to trade? If so how long would it take to replace?

What is your estimate for how long it will take your income to reach pre loss levels?

Then make sure the equipment, stock and building protected. This means that in the event of loss or damage to your assets, the cost of replacement can be covered.

It is important to have business continuity/interruption insurance so that business can keep running event after it has suffered a serious incident covered by insurance.

Insured Values

It is vital to understand different risks are insured for different amounts.

When considering the amount to insure it is important to pay attention to replacement costs, especially for buildings and equipment.

The replacement value of most items increase over time due to inflation, rising manufacturing, general business costs as well as many items having been superseded. The exception is stock, which is covered for its cost to you value, not replacement!

Things to consider? Is your property on the coast or in a flood zone? Do you need cover certainty for the area you are in? Is the cover adequate relative to recent weather events – noticably the weather we have experienced over the last 12-18 months?

Talk to us at Peter Vickers Insurance Brokers on 1300 784 011 today.

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Lindfield, NSW 2070

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Peter Vickers Insurance Brokers

Suite 2/345 Pacific Highway
Lindfield NSW 2070
T: 1300 784 011
enquiries@pvib.com.au

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