Self-managed Insurance - why it is not always good insurance
It can be hard to find the time to fit everything into the day when you own a small business. When it comes to business insurance, opting for a cheap one-size-fits-all online option is probably very tempting. It might save you money now, but buyer beware...cheap insurance isn't always good insurance and one size never fits everyone. No one wants to overpay for insurance but not having the right insurance can cost you far more down the track when you need it most.
Cover vs Price
Insurance is a 'promise' from your Insurer to put you back into the position you were in before things didn't go to plan. PDS terms, conditions, and definitions can be confusing, and each Insurer's version is different, meaning their cover is different too. One-size-fits-all policies don't take your unique business nuances into account and opting for what seems to be a good deal might see you underinsured with less cover. Cover that your business might need to survive through a loss.
Insurance is based on historical claims evidence and potential future loss for the insurer. Across the board, there really isn't a huge difference in the base rate that insurers use. The difference in price is often the quality of cover. Some offer less cover, and some offer more cover, and this can often be reflected in the final premium.
Risk vs Value
As a business owner, you will likely have a group of professionals you engage to help you with your business. Your accountant, maybe a bookkeeper, your IT guy, bank manager and so on. Adding an Insurance Broker to this list is a smart move. They can make the process of sourcing adequate and appropriate insurance for your business less of a risk, and this won't necessarily cost you more. If your budget is limited, an Insurance broker is the best place professional to guide you through the 'must haves' and 'nice to have' cover for your business, giving you the most protection and value for your dollar.
At some point, you may need to test your business insurance by making a claim. Those that have been in this unfortunate position know all too well what an exhausting, time-consuming, and often infuriating experience it can be. Unfortunately, self-managed insurance can result in a bad claims experience with an undesirable outcome. Everyone knows someone who has been declined an insurance claim and feels cheated by an Insurer.
Time vs Price
Ask yourself, 'what is my time worth and where should I be spending it within my business?' Is spending hours researching insurance and comparing quotes for your business a good use of your time? If you leave this chore to the last minute only to find you run out of time and renew everything 'as is' - you already don't have the time to manage your business insurance effectively. This could cost you money and more time down the track.
Is spending hours and hours managing your own claim and waiting 'on hold' with your insurer a good use of your time? An Insurance Broker can make a very stressful time, less painful by liaising with the Insurer on your behalf, managing your claim for you, advocating for you, and ultimately saving you loads of time while getting the best outcome for you. Most brokers don't charge for this service, and it means more time back in your day. Don't fall into the trap of thinking this will never happen to you. A basic insurance claim can take 50+ hours to manage from start to finish.
Would you trust a plumber to do your tax return?
Probably not. Should you trust an Insurance Broker to look after your business insurance? Yes, of course. As the saying goes - horses for courses. Call us for a chat, what have you got to lose?
Advisr does not provide advice and does not hold a financial service license (AFSL). All information above has been provided by Reef Insurance Brokers Cairns.