New research from CGU has revealed that underinsurance is potentially a serious risk to the sustainability of many small businesses with many operators facing devastation if they suffer a major setback or loss.
The research, carried out in partnership with loss adjusters McLarens Young International, reviewed actual levels of underinsurance – not just business perceptions of the problem.
Survey results were drawn from on-site visits and interviews with small business customers which included systematic reviews of assets and cash flow to determine the adequacy of insurance cover.
Startling revelations included:
- 65% of small businesses have no business interruption cover;
- 47% do not adequately insure their stock and contents; and
- 82% who own their business premises do not insure them appropriately.
Making sure your business has adequate insurance in place does not have to be difficult or time consuming. Find an insurance broker who will work for you. One who takes the time to understand your operations and the risks specific to your business. A good insurance broker will explain the different insurance covers and detail how they can mitigate the risks facing your business. Your insurance broker will also market your business insurance policy to a variety of insurers, finding a solution that meets the needs of your business and fits within your budget.
Over the next few blog entries, we will discuss the key areas of underinsurance for Australian businesses. Next week, we look at Business Interruption insurance and explain what this insurance covers and why it’s important to include in your business insurance.