Something easily overlooked in the middle of a packed business year is whether your business insurance is up-to-date. Pushing back an insurance review could leave your business underinsured and if you need to make a claim, could put you in a dire financial situation.
Scheduling in time for an annual review is a great place to start. Assessing your insurance following any internal changes throughout the year puts your business in the best possible position.
New equipment or vehicles
If you have disposed of any vehicles or machinery, they need to be removed from your detailed inventory and tax depreciation schedule. Alternatively, any new vehicles or machinery would need to be added to ensure lists are up-to-date.
If machinery breaks down, specific plant and equipment insurance can give you peace of mind. Having equipment repaired can be costly, while also taking a long time. This is further complicated if it needs to be transported to do so. One issue businesses have run into lately, is having parts held up as a result of supply chain delays.
Disruption can be minimised with cover for:
- Machinery breakdowns – provides protection to your business should equipment fail
- Material damage, including loss, damage, burglary or theft of physical assets, and more
- Business interruption – to cover loss of profits, operating from a temporary location, and extra expenses incurred to allow a business to continue operating
- Hired-in plant, which may be a condition before you can hire it
Moving/changing office
Moving or changing offices can involve a lot of time, money, and energy. If you have recently moved your business premises, you may not have gotten around to updating your insurer.
After a move it’s important to keep your insurer informed by providing accurate details about the construction and age of the building, and any security and fire protection details.
Those yet to fully move but have taken control of the new premises will need to insure both sites simultaneously. A broker can confirm whether your policy covers items while they’re in transit. If you choose to go ahead with additional transit insurance, ensure you carefully read the fine print and understand the excess requirements.
When moving to rented premises, check your lease agreement to make sure the owner has transferred insurance responsibilities to you. As the Leasee, you may need to insure glass, air-conditioning systems and the internal fit-out yourself. Your broker will be able to review your lease and advise of any insurance requirements.
Staff fluctuations
Extra employees need to be accounted for in your insurance as your business grows.
Have you undergone changes such as expanding from a small to medium-sized enterprise or adjusting your business structure? The following types of insurance could be worth looking at as well:
- Directors’ and officers’
- Business interruption
- Cyber
- Public liability
- Employer’s liability (if you employ one or more people)
- Marine insurance for products you export or import, or send within New Zealand
- Professional indemnity
- Contract works
Evolving services
As your business changes over time, your services and products will likely follow suit. Protecting your sustainability requires having suitable insurance based on your day-to-day operations.
Specific Insurance can help to protect your business if your products cause:
- Death or injury
- Emotional distress
- Property damage
- If the product fails or is unsafe.
The law considers you the ‘manufacturer’ of a product if you import it and there’s no manufacturer’s representative of that product in New Zealand.
Visit https://www.business.govt.nz/risks-and-operations/planning-for-the-unexpected-bcp/insurance/ for more information about the cover your business might need.
Change in revenue
Throughout the year there may have been an increase in your business’ revenue if you have gotten more stock, or expanded your services or product range. If there are any drastic changes, this will need to be reflected in your insurance.
A prompt policy review can help ensure you have appropriate cover for your current turnover. When there is a variance between the insured amount and actual turnover, this could leave you out of pocket if you need to make a claim.
To find out more about adjusting your policy to better suit your business’ current needs, get in touch with your insurance advisor. High Street Insurance Brokers work with you to make sure you get the appropriate level of protection, get in touch with the team today.
