Protecting Your Business

For many small business owners, your business is both your passion and your livelihood. Successful small business owners know that managing their risks and having adequate business insurance protection is essential to creating a sustainable and profitable business. This can mean insuring your assets against fire, perils, theft and breakdown, covering yourself for legal liability costs and protecting your profit during times of business interruption.

Did you know:

Research shows that 70% of Australian small businesses which are under-insured or uninsured would not survive a major event like a storm or fire.*

Although 85% of small business owners believe they are adequately insured, 13% don't have fire insurance, 20% don't have burglary insurance and 65% aren't covered for business interruption or loss of profits.**

Many businesses simply renew their business insurance every year without considering changes or growth that may have happened to their business. It's important to review your sums insured at least once a year to ensure your protection stays up to date.

While you might have practices in place to manage and avoid risks, no business can be completely immune from threats such as fire, theft and accidents to your physical assets. The best place to start is to understand the kind of insurance covers you need to protect your assets. The Business Risk Survey*** below is designed to help you.

Business Risk Survey

Use these questions to help identify areas where your business may be at risk. Please answer all questions and refer to the hints and tips below.

Do you employ people to help you run your business?
a. Yes b. No
How often do you review your sums insured and consider changes to your insurance policy?
a. Rarely b. Regularly
Does your business operate from premises likely to be damaged in a severe storm?
a. Yes b. No
Does your business carry high levels of stock or store highly valuable items?
a. Likely b. Unlikely
Would you be able to trade from another location if your business premises were inaccessible?
a. No b. Yes
Does your business property contain a glass shopfront?
a. Yes b. No
Do you pay rent for your business' premises?
a. Yes b. No
Does your business rely on equipment, machinery or tools?
a. Yes b. No
Do you keep receipts for all business purchases, and have back-up copies of important documents like insurance certificates?
a. Some b. All
Do you have a business continuity management plan for your business?
a. No b. Yes

Hints and Tips from the Survey

If you answered 'a' for 0-3 questions:
Tip: Make sure you review your insurance policy at least annually to ensure you've accounted for any changes to your assets and are aware of all the covers that might be appropriate for your business.

If you answered 'a' for 4-7 questions:
Tip: As part of your business insurance policy, you might like to consider including business interruption insurance . This means that if your business is forced to close as a result of insured property damage and your profit is affected, you can remain in a similar financial position to help pay for fixed business overheads such as staff expenses, rent and relocation costs until you get back on your feet.

If you answered 'a' for 8-10 questions:
Tip: Speak to your insurer to make sure you have a full understanding of the kinds of protection needed to maintain a successful and sustainable business.

Important Information:
* Insurance Council of Australia Report on Non-Insurance and Under-Insurance Survey 2002
** Cameron Research Group 'The Australian Small Business Market for Financial Services 2008: Insurance and the Small Business Market' June 2008.
*** Any advice has been prepared without taking into account your particular objectives, financial situation or needs. For that reason, before acting on the advice you should consider the appropriateness of the advice having regard to your objectives, financial situation and needs.