Growing your Business Insurance

Growing your Business Insurance

21 July 2021

Now that Australia seems to have steered out of a short-term pandemic recession, a strong economy is the flavour of the moment. More than eight in 10 Australian CEOs expect organic business growth this year, according to a PwC survey.

Is your business one of them?

Expectations are one thing, but changing workplace conditions can call for major adjustments. Consider what was typical before the year 2000 – staff working independently in cubicles, reams of paper feeding the printer, and a lot less tech than now. Meanwhile, modern workplaces foster online and face-to-face social collaboration, standing desks, comfy zones, and more seamless remote working.

The role of assets in growth
But, back to the physical, not just human, assets in your growing business. As your operations expand, chances are you’ll invest in more assets and stock. It’s easy to overlook updating your asset register – include intangible ones such as goodwill and depreciation. Make sure you or your specialist update your detailed inventory regularly, such as monthly. Advise us, so we can let you know if you need to adjust your insurance cover.

The risks of a growing business

You might have invested in more assets as your business grows by extending or adding product or service lines. Before you do so, it’s best to check if they’re covered under your existing insurance policies. We will check the adequacy of your business or ISR cover including sum insured taking into account the growth in your assets.

In addition, we will look at your liability insurance such as public and product liability and professional indemnity. They’ll protect your business against financial loss due to:

  • Your wrongful actions or advice
  • Your negligence
  • The condition of your property/service/product
  • Defects in your premises or the work you perform could result in someone being injured, killed, or having their property damaged or destroyed. Otherwise, they might suffer a loss from using your services, products, or advice.

Here’s why. As your business booms, you risk:

  • Outgrowing your operational infrastructure, so it’s no longer fit for purpose
  • Declining product or service quality as your staff scramble to keep up
  • Inability to capture key customer and product/service data
  • Increasing the likelihood your business might cut regulatory corners.

As your business grows, ensure you’ve done your due diligence to work out which areas have the greatest legal exposure and demand on your resources. Streamlining associated activities, perhaps outsourcing or automating, help manage your risk while improving your focus on core business. And to power up your operational capacity, litmus test your systems. Are your procedures and policies for recruitment, induction, training, workflow, communication channels, planning, and performance management still a good fit?

The risks of not updating your cover

So, if you haven’t updated your insurance cover in line with your business growth, you’ve got less protection against risks that could stifle your trajectory. Under or non-insurance is a gamble that could lead to financial hardship. For example, when someone claims successfully against your business, you’ll have to make up the shortfall or pay out the costs in full.

Adapt your cover to business growth

As you’ve seen above, business expansion transforms your risk profile.

Australian business leaders aren’t as focused on risk management as their overseas peers, says a PwC report. It urges leaders to revisit and re-engineer such strategies. PwC names the top threats as cybersecurity, pandemics and other health crises, changing consumer behaviour, and the speed of technological change.

So, have a chat with us to make sure you’re covered for the changing risks as your business grows.

This article was written by IAG

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