Is your business sufficiently insured?

Underinsurance is unfortunately alive and well in Australia. Reality is, too many small businesses are at risk of hardship because they are underinsured. Not having sufficient insurance is a common mistake and it is often something that is not thought about until a significant loss is experienced.

As a business owner, it is important to regularly review your insurance policy to ensure that it keeps pace with the growth in your business and inflation.

During challenging times, there is a natural tendency to look at every item of expenditure. Insurance premiums like everything else come under the microscope, but there are dangers for the unwary if sums insured are reduced solely to achieve cost savings.

If the survival of the business is dependent on premium savings, it may be better to consider a higher level of excess rather than a reduction in sums insured. The level of risk to the business can then be contained to the dollar value of the excess, rather than the shortfall created by the level of underinsurance.

If you own your own property you also need to be wary that insufficient cover can emerge over time. So even if you correctly estimate your cover in the first place and then annually increase the sum insured, it can still lag behind the actual rise in building costs. ASIC research found that while the CPI increased by 17 percent between March 2000 and March 2005, building costs in fact rose by 33 percent.*

It is also important for business owners to have adequate business interruption protection. It can sometimes take months or even years to rebuild after a major loss, so having cover for a business’ cash flow while it gets back on its feet after a major loss can make a difference on whether or not a business survives an interruption.

When choosing an insurance company you need to find one you can trust.  Wesfarmers Federation Insurance Ltd (WFI) has a long and proud history of supporting Australian businesses, dating back to 1919. Designed with business needs in mind, WFI Commercial Plan offers you coverage and protection including business property damage, business interruption, burglary & theft and money cover.

WFI are good people to know because we offer our clients a high level of personal service, delivered face to face on-site. This means you will be dealing with a dedicated Area Manager who will take the time to get to know you and your business. In the instance of a claim, your Area Manager and Claims Officer will work closely together to ensure your claim is processed efficiently.

WFI operate with the simple philosophy of striving for excellence in claims and service.

For further information about our products, contact WFI on 1300 934 934 or visit www.wfi.com.au. Your local Area Manager will be happy to visit you on-site to review your insurance and provide you with an obligation free quote.

Any advice or product information contained above was provided by WFI is general in nature only, and does not take into account any individual’s objectives, financial situation and needs. You should obtain the relevant Product Disclosure Statement from WFI and consider it in deciding whether to purchase the policy.

*Source: 05-269 Australian homes underinsured: ASIC report, http://www.fido.gov.au/fido/fido.nsf/byheadline/05-269+Australian+homes+underinsured%3A+ASIC+report


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