FROM NZCB —
Why you should review your insurance programme If you own a small or medium-sized enterprise (SME), you probably know that having business insurance is essential throughout the life of your business. But, did you know that the key to staying protected is regularly reviewing your insurance policy?
Although you may have set your insurance policy last year, it might not be relevant to your business in the current environment. Your business will go through many stages and times of change that include fluctuations in profits, staff, and workloads. Changes in society may also cause some disruption to your business, as well as new government or industry policies, not to mention the effects of large-scale events, such as the Canterbury Earthquakes or COVID-19. These are pivotal points during the life of your business when you should consider reviewing policies and strategies across the board. Insurance is especially important because it forms a key part of your risk management strategy. Because of its importance, insurance should not be something you set once and forget about, because your business will grow and evolve throughout the years, and this will change your risk profile. Your business may have different or new needs, and there might be elements of your current policy that aren’t relevant for the business anymore. A good insurance broker will help you make the necessary changes, explaining what they mean and any consequences, and work with the insurance company to enact them. Insurance policies are also subject to change and, by not regularly reviewing your policy, you may be paying more or missing out on extra insurance coverage. You may also be, unknowingly, under-insuring the business, which can be a costly mistake should you need to make a claim.
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When to consider reviewing your insurance policy Like your business, insurance is a scalable asset. However, this can mean that, as your business grows and develops, or is impacted by societal or industry events, insurance policies may become outdated, leaving you exposed in some areas and potentially under insured. These are three important times when you should consider reviewing your insurance:
1. When the business and/or environment changes suddenly As businesses would have witnessed with the global outbreak of COVID-19, some things are unforeseeable. However, it is important that, when these events do happen, you consult an insurance broker and review your current policies. These events can also make it difficult to plan for the future but, by discussing with a broker, you can come up with a plan that will keep you protected as you recover or adapt to new opportunities. Industries are also subject to various changes, policies, and new legislation. These can impact areas of your business and, depending on the legislation, it can also require a change in insurance policies to ensure you still have the most appropriate coverage.
