Insurers Declare Melbourne Storms Catastrophe
Claims bill almost $5bn so far
Brokers angry over FSL increases
Business Insurance
Is your business adequately protected?
Business owners depend on CIA to provide advice to protect their business and their lifestyle. With this in mind, it’s our duty to help business owners understand the issues.
Half measures or linking sums insured or cover to keep price down can only lead to unhappy and out of pocket clients. A review of building sums insured and Business Interruption (BI) cover needs to be carried out regularly.
Increased costs of rebuilding and replacement costs over the last 3 years.
Further research shows since 2003, 47% of businesses have made no change to Building sums insured.
Imagine the situation after a major fire. Your business may have a reduced income or no income at all, yet you have to continue to pay on-going business expenses, such as lease and rent costs, employee’s wages, finance payments as well as the usual living expenses of school fee’s, groceries and household bills.
The danger of under-insuring is evident in statistics. For example, 45% know about it but don’t have it and only 31% of businesses have Business Interruption insurance.
Even those with Business Interruption insurance may not be fully insured. For example, after a major fire… 50% of businesses do not survive. Yet 84% of SME businesses believe they are fully insured — no wonder only 50% of businesses survive a large loss.
Don’t take the chance!
Don’t wait to have a claim before you discover your business is ‘exposed’. Simply talk to us and let us review your current insurance arrangements.
Examples of businesses who did not have adequate cover:
Insufficient Indemnity Period
A company sustained a major fire to their premises and after building tenders, council approvals etc it took 6 months just to commence the rebuilding. It took a further 9 months to rebuild and a further 6 months to regain pre loss turnover. The company only had cover for a 12 month indemnity period.
Total gross profit loss to the business $3.5 Million: Insurance pay out $1.6 Million.
Gross Profit Under Insured
Again a company sustained a major fire to their premises. Gross profit declared for insurance purposes was $4 Million. The company’s Gross profit had not been properly assessed and the true gross profit should have been $8.5 Million. Therefore under-insurance of 53%.
The Gross profit loss was $4 million: Insurance pay out $2.2 Million.
“Remember Cost is important but should not be the primary decision making factor when purchasing insurance….”
