That’s right, insurance is not compulsory – well aside from statutory covers such as compulsory third party, workers compensation etc.  you don’t have to buy insurance. You don’t have to insure your house, your business, your cars, your legal liability. 

So why do you?

You do it for peace of mind. So if you’re going to be spending good money on insurance, you should try to ensure you get the cover right. 

Here are my tips to assist you make the right decision:

Tip Number 1: forget everything you think you already know

Put aside everything you think you already know about insurance. All the negative stories you have heard of insurers not paying claims. And don’t compare your premiums to your industry peers. Know this:

  1. every insurance contract is different
  2. every insurance policy is different
  3. every insurance product is different
  4. no one insurance policy is the same
  5. your business/property/circumstance/risk etc is not “exactly” the same as the next person

Tip Number 2: find a good insurance risk adviser to partner with

Do your research. Ask for recommendations within your network. Find out who your industry peers partner with. Understand the value that an insurance risk adviser can add to your business. 

An insurance risk adviser or “insurance broker”, is a specialist in general insurance and risk management. They act on behalf of their clients, they understand the insurance market, they learn about your circumstances and they are an advocate for you. They are essentially a part of your business.

(you may not be aware that some insurance companies and their agents, like banks and most comparison websites, act on their own behalf and not for you)

Once you have a short list of insurance risk advisers, interview them. Ask them:

  1. about the market they can access
  2. what services they can provide your business
  3. how they can add value to your business
  4. what support you can expect if you need to make a claim

Tip Number 3: don’t get carried away with the premium

Yes, yes, yes, of course, price is important, but getting the right coverage takes precedence. Understand what you are buying. Be confident that the premium saving of $100 is not going to leave you unprotected. Remember what I said earlier… every insurance contract is different… etc. 

I’ve heard so many stories where individuals/businesses have shifted insurers to save money only to find out, at the time of a claim, that there are gaps in the cover and that they have no coverage at the time of a claim. Is the premium saving worth that risk?

Tip Number 4: take time to be sure your insurance risk adviser understands your business

Extremely important. Make time for your insurance risk adviser so that YOU are sure that they understand what’s important to you and the activities that your business performs. A good insurance risk adviser will gain a good understanding of:

  1. the structure of your business
  2. all of the activities that your business is doing to earn an income
  3. what your biggest concerns are 
  4. what keeps you awake at night

It will benefit you to allow time for your insurance risk adviser to gather this information.

Tip Number 5: show some interest

We are all busy, but it is really important to put time aside to review your insurance. Block out time to read and understand the policy documents. Look out for:

  1. what is automatically included
  2. what is excluded
  3. what clauses have been imposed that will affect your cover
  4. whether the policy limits are sufficient

Don’t be afraid to ask lots of questions.

I’ll finish up with…

Insurance is not compulsory so if you choose to buy it, do everything you can to ensure that you understand what you’ve got. If you pursue a cheaper premium, make sure you compare the new policy against the old policy so that you identify any potential gaps in cover. If you don’t have the confidence to do this yourself, develop a relationship with an insurance risk adviser.

Article written by Tricia Eyers | Adroit Insurance & Risk | triciae@myadroit.com.au | 0437 546 367

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