The end of the financial year (EOFY) is a time for stocktakes, which includes taking stock of your insurance and risk-management program.
The Australian government’s business.gov.au website states that reviewing your insurance and ensuring you have the correct type of policies, is an “essential task” for your EOFY to-do list. No doubt your to-do list is already quite long, so with some guidance from our corporate partner Steadfast, Broker Technical Manager – Michael White provides some simple tips to completing an EOFY insurance check-up.
Michael recommends: “start by asking yourself: what changes have occurred to my business this year?”. “What additional assets do I have? What assets have I disposed of? What has been our growth, or reduction in business? What are our legislative or contractual requirements?”
Monitoring your assets
Ideally, the moment you’ve taken possession of a new asset, or sold one off, you have notified your insurer. But if not, now is a good time to do so.
“Go to your Planned Cover account manager with an estimate of the replacement value of the asset,” Michael says. “It doesn’t need to be overly detailed but have something which sets out the replacement value of the assets you want to insure.”
Watching your growth
How much your business grows during the year can impact factors such as your stock, staffing and credit levels. Therefore, it’s crucial to review your insurance cover to see if it’s sufficient and to consider how well it will provide for projected changes in the coming year.
“If you haven’t calculated growth, staffing, wages and revenue accurately and you have a major loss, you’re potentially underinsured,” Michael says.
“Our estimate is that only about a third of people who are in occupations that would benefit from business interruption insurance have it.”
Growth can also impact your appropriate sum insured via trade credit insurance, product liability, corporate travel, and other insurances.
Legislative or contractual requirements
Have you read the fine print on that lucrative contract you recently secured? If not, now is the time to do so.
“Unfortunately, in my experience, businesses often enter into contracts without reading them,” Michael says. “Then, after they have signed, they realise that they have to obtain types of insurance that either don’t exist, or are quite expensive, and they haven’t allowed for that in their contractual negotiations.”
If you find yourself in this kind of sticky situation, it is important to reach out to your Planned Cover broker.
Also remember to review your legislative obligations. Quite often, for certain occupations and in certain sectors, you are required by law to have insurance. For instance, workers’ compensation and professional indemnity insurance are compulsory for many Australian businesses.
Planning for a Happy New Financial Year
Your business and your needs change from year to year. And as they do, it is important to re-assess your risk exposures and mitigation strategies.
Your Planned Cover account manager will be across legislative changes, shifts in the market, claim trends, plus new and emerging risks. They will also understand exactly how your business works, and how they can help you execute your business strategy.
So if you’re already insured, the EOFY is a good time to check in with your Planned Cover account manager, take stock of what cover you have and what gaps may have emerged in the past 12 months.
Also, if you’re not insured, a Planned Cover broker can walk you through the compulsory insurance for your business, and your options for mitigating risks through insurance.
That way, you’ll have a plan for a happy new financial year, and you will be well-placed to navigate emerging risks in the tumultuous year ahead.
Important note – Planned Cover is a Steadfast Network Broker. The information provided here is general advice only and has been prepared without taking into account your objectives, financial situation or needs. Talk to your Planned Cover account manager to discuss your personal circumstances.
VIC : Jonathan Lam (03) 8508 5400
NSW/ACT: Simon Gray (02) 9957 5700
QLD/NT: Karen Meiklejohn (07) 3017 1500
SA/TAS: Cos Cirocco (08) 8363 7366
WA: Kylie McGrath (08) 9261 1200