In these unprecedented times, many small businesses in New Zealand are facing financial hardships and economic uncertainty.
The lockdown and now the economic fallout have seen our businesses battered and bruised and, not surprisingly, owners are looking to reduce costs.
But sometimes to their detriment.In these times, having adequate insurance cover is vital, yet some owners may be tempted to look at ways to cut corners on their insurance. If disaster strikes, the owner may find they are not adequately covered.
With underinsurance already an issue in this country, some business may go under.Using an insurance broker can not only ensure the owner has the right cover at the right price but can help businesses to tailor their specific needs under one policy, avoiding paying for covers that don't apply to the business.
Brokers can ensure policies are up-to-date, an important issue with the changed environment.
“A broker can combine the risk assessment of the business with their in-depth knowledge of insurance policy wordings”
More importantly, brokers can help owners manage their business’ risks - crucial in these constantly changing times.
Brokers are also often a small business owner themselves, so they understand the day-today issues small business owners face. They speak the language of small business and, at the same time, the language of insurance companies.
Small business risk management
Small business owners are often too busy to do anything other than focus on running their business.
They usually don’t have the time or expertise to properly risk manage their businesses. This is where brokers can come in. They are well placed to assess and understand the specific risks of the area a business operates in.
They can advise on best practice for managing the business’ risks and recommend ways to reduce or even eliminate them where possible. A broker can combine the risk assessment of the business with their in-depth knowledge of insurance policy wordings to find the best solutions to protect the business.Good risk management advice by brokers can actually reduce insurance costs and, importantly, help reduce possible claims costs.
Sound risk management can:
- Lower insurance premiums
- Reduce losses of cash or stock
- Reduce business down time
- Reduce the chance the business may be the target of legal action
“Brokers can help their clients evaluate their risks by understanding what is important to run the business,” says Neil Cousins, Broker Services Manager at Steadfast Group, NZ. “A broker can also consider the factors that could affect the critical activity of the business.
For example, the impact of a power failure, or the cost of business interruption if equipment breaks down and a business is forced to close until it’s fixed or replaced.”
When disaster strikes
While the focus in New Zealand – like the rest of the world - has been on consequences COVID-19, the many adversities and disasters that hit our communities and our business have never gone away. We’ve seen some strong earthquakes in recent months.
There have been some major storms that have hit our cities and towns. Fire, crime, accidents and potential legal action have not gone away. With the economic climate shaky, the pressures on small businesses, which make up 97% of businesses in New Zealand, makes them more vulnerable than ever. “When disaster strikes, like fire, trying to manage the claim process is often beyond the capabilities of a small business owner.
Problematic issues handling a claim could mean the business comes to a standstill or even be the end of it,” says Mr Cousins.During stressful time of filing claims, a broker's knowledge of the intricacies of the insurance policy can make all the difference. Brokers can save on the costly and time-consuming process of directly negotiating with the insurer and help owners reach the best possible settlement.
“We are in unparalleled times and for small businesses, times have been especially tough and will continue to do so. Ensuring they have the right insurance protection helps reduce some of the stress business owners are facing,” says Mr Cousins.
This information is provided to assist you in understanding some of the terms, implications and common considerations of business insurance. It is not complete, so please request full details from your Steadfast insurance broker. Deductibles, exclusions and limits apply. Business insurance is issued by various insurers.
Important disclaimer - Steadfast NZ Limited, its related companies and associates.
The views expressed are those of the author only and do not necessarily reflect those of Steadfast.
This magazine provides information rather than financial advice. The content of this magazine, including any information contained in it, has been prepared without taking into account your objectives, financial situation or needs. You should consider the appropriateness of the information, taking these matters into account, and seek appropriate financial advice before you act on any information.
Information is current as at the date articles are written as specified within them but is subject to change. Steadfast, its related companies and associates make no representation as to the accuracy or completeness of the information. Various third parties, including Know Risk, have contributed to the production of this content. All information is subject to copyright and may not be reproduced without the prior written consent of Steadfast .