The business world is moving at a rapid pace and unpredictability around the world is presenting new risks. Insurance is there to protect New Zealand’s businesses and it protects well when it is up to date and relevant. So, what should New Zealand’s business owners do to keep their business insurance up to date?
Insurance and Business History
Every person and entity that is insured is under a duty to disclose all material facts. Material facts are facts that could influence the insurer’s decision to accept a proposal for business insurance or a proposal to renew business insurance and, if so, on what terms.
Insurers are typically interested in knowing of any history of criminal convictions, bankruptcy, receivership and liquidations or insurance and claims having been declined. If any of these facts change during the year, you have time to address some ahead of renewal time. Otherwise, they should be communicated to your insurer. Informing your insurer at renewal time may not always lead to a withdrawal of an invitation to renew your business insurance. It may result in some conditions or limits being imposed and you could remain covered to some extent.
Insured Business Assets
There are three ways in which your business insurance may not match your needs:
- You no longer own a business asset that you have insured, in which case you’re wasting money.
- You have a business asset that is not insured, so you’ve inadvertently exposed yourself to uninsured losses.
- You don’t have insurance or not enough insurance for your business e.g. your turnover is understated for business interruption insurance or your limits on business liability insurance are too low.
Each year it is worth spending time with your accountant to review the business assets on your balance sheet and your business’ turnover. Withe the right insurance advice, you’ll be able to update your business insurance package with the right values during the year, and before renewal time.
Mind the Insurance Gaps
Risks and exposures change for all sorts of reasons. The Health and Safety at Work Act 2015 changed directors’ exposures and liabilities towards employees in the last year. Today, any business with employees should strongly consider taking out statutory liability insurance cover.
Of course, one way to guarantee your business insurance package is up to date is to take control of it by going to www.insureonline.co.nz where small business owners can buy online and manage their business insurance throughout the year.