Business Insurance: What Are Your Risks?
08 January 2018
Whether you’re running a multi-national company, a large national freight business or a small retail shop, you need to have your house in order with your business insurance otherwise all your hard work is at risk.
Aside from making a profit, the business needs to be able to continue no matter what happens. At Austral, we group these risks into 4 key areas – Liability Risks, People Risks and Property or Asset Risks.
Liability Risks are, generally speaking, the personal injury or property damage caused as the result of negligence (this is addressed with public and products liability insurance.) It includes environmental damage or the mistreatment of an employee in which case Directors and Officer’s is critical. Even legal costs defending an action can bring a business to its knees.
People Risks are the potential of injury or illness of you or your employees - at work injuries or while travelling, including exposure to such things as Zika Virus. The major and compulsory requirement here is worker’s compensation – this is usually the major part of a business’s annual insurance premiums. As people are such an important part of any business, understanding your risk exposures and making sure your business can do things right when things go wrong is a must for any business owner or manager.
Property / Asset Risks are the risks we most often think of when we consider business insurance. What happens if the warehouse burns down? What happens if my trucks are involved in a major accident? How would our winery recover from a bush fire? There are excellent Business Insurance Packs but ensure you get the right advice to ensure it fits your needs.
Revenue Risks are the risks that affect your business earning its income. This covers a range of risks from exchange rate risks, crime and loss of income from business interruption such as a fire, flood or even a mechanical breakdown beyond your control.
Which business risks should you manage and what insurance cover do you need?
Insurance helps mitigate these risks, however with so many types of insurance covering such a wide range of scenarios, it is important to have insurances which cost effectively cover your most critical insurable exposures. The business needs to manage uninsurable risk, but what should the business insure against and what risks should it manage?
This is where sound advice comes into play. A trusted and competent insurance broker will help steer you through firstly understanding the risks your business might face, and then discussing the options you have for insurance and risk management. This is their role and that’s why they can play an important and valuable role in your business.