Insurance on your shop, office or other business assets is not the only risk
management strategy that businesses are engaging to ensure the business can
survive and prosper. There are strategies that both reduce the risk and can significantly reduce your business insurance costs as well.
Comprehensive cover for loss or damage to commercial buildings and business
contents including tools, equipment and machinery is essential to survival of a
But many business operators are under the illusion that this business
property cover will solve all of their problems in the event of an insured loss.
Damage to or theft of a key item to the business operations may be covered by
insurance but there may be productivity consequences that critically affect the
continuity of the business well into the future.
Productivity failures as a result of uninsured (or uninsurable) losses to the
business can be averted through the implementation of strategies to manage the
Knowing the options and limitations of your business insurance cover is as
important as understanding how certain property losses or damage might impact on
operations including potential downtime.
Stolen equipment can be reinstated through your insurance. However in the
days, weeks or months that it may take to source and replacement equipment, the
is potential for the loss of valued customers due to orders shipping late - or
workers becoming disenchanted because of their dependence on the stolen
equipment to enable them to do their jobs effectively. This could be game over
for some businesses if not anticipated and well-managed.
Any loss to your small business's productivity or cash flow in the short term
can also have long-term consequences and are well to be avoided.
Maintaining a comprehensive business insurance plan is your first option when
looking at ways to minimise the risks to the business. It may be that your
insurance policy can provide more protection than you anticipated in areas like
covering losses caused by downtime.
To decide on the most appropriate insurance options to your specific business
needs it is recommended that you talk to a licensed insurance broker.
When talking with your broker, it's worth finding out about policy excesses
to ensure that your business will be in a position to raise the necessary cash
when the need arises and in a timely fashion.
Make sure that you understand the terms and conditions of your policy now -
so that you can anticipate what you are likely to expect from your insurance in
the event of a claim - and prepare for the other consequences that a particular
loss may cause to the business
You can then address these risks by drawing up a risk management plan.
Planning for the minimisation of risk and implementing your business
risk management plan should result in lower overall operating expenses over time
- making you more competitive and more profitable by keeping the equipment
running and satisfying all stakeholders.
A simple audit of the things that could possibly go wrong around the
workplace - and their likely impact on the business - can also expose risks that
can be eliminated altogether quickly and inexpensively by making small changes
If you want to reduce the financial risk to you and your business, have a
plan to deal with downtime.
A better appreciation of where your business might be exposed can help you
identify areas that may be discussed with your broker for inclusion in your
business insurance policy.