Running a small business is demanding, and for many business owners, insurance is a ‘set and forget’ task until something goes wrong. Once a policy is in place, it’s easy to assume you’re covered. But as businesses grow, operations expand, and contracts increase in size, outdated business insurance coverage can leave you exposed to significant financial risk.
A recent QBE survey found that 59 per cent of micro-SME’s haven’t updated their insurance since first purchasing it, despite 42 per cent seeing revenue growth in the past three years. This gap in protection puts many businesses at risk of financial losses they may struggle, or even fail, to recover from.
Has your coverage adapted to your success?
Hiring new employees is a sign of business success, but it also introduces new risks. More staff means greater exposure to workplace injuries, liability claims, and employment-related disputes. And if your coverage hasn’t been updated to reflect a larger workforce, you might not be adequately insured.
Similarly, if you’ve invested in new machinery, tools, and IT infrastructure or moved into larger premises, your business assets may be worth significantly more than when you first took out insurance. If your coverage is based on outdated valuations, you could be underinsured in the event of damage or theft.
While winning contracts can be a game-changer for the bottom line, it can often come with stricter liability requirements. Many clients will require proof of sufficient coverage before signing off on supplier engagements. If your policy doesn’t meet these standards, you could miss out on business opportunities or even find yourself liable for damages beyond your current coverage limits.
Without updated cover, business owners can be caught off guard when a claim arises. This is where an insurance broker can provide value. Brokers are experts at spotting risks – often the kind business owners haven’t even considered. They can review your insurance needs, provide guidance on changes in the market, and make sure your coverage keeps pace with your success.
The financial risk of outdated insurance
The cost of being underinsured can be substantial enough to drive a SME to breaking point. In the survey, more than half of micro-SMEs report they would struggle to recover from financial setbacks over $10,000, while almost a quarter say they wouldn’t be able to absorb any financial loss at all. A single unexpected event such as property damage from a weather incident or a lawsuit, could put a small business in serious jeopardy.
Time for a coverage check
If it’s been years since you reviewed your insurance policy, now is the time to act and to ask yourself:
- Have I hired new employees?
- Have I upgraded or expanded my business premises?
- Have I purchased new equipment, such as laptops or tools?
- Have I diversified my product or service offerings?
- Am I taking on larger contracts with new requirements?
If the answer is yes to any of these, it’s time to reassess your coverage. A conversation with your broker might be a helpful place to start.
Protect your business with flexible coverage
QBE’s business packages offer flexible solutions to help keep your insurance in step with your growth. By regularly reviewing and updating your policy with your broker, you can avoid unexpected gaps and protect your business from potential risks. Don’t wait until it’s too late. Visit us here.
Disclaimer: QBE Small Business Insurance and QBE Business Package Insurance are issued and underwritten by QBE Insurance (Australia) Limited (ABN 78 003 191 035, AFSL 239545). Any advice provided is general only and has been prepared without taking into account your objectives, financial situation or needs and may not be right for you. Please read the relevant Policy Wording to decide if the product is right for you.
QBE makes no warranty or guarantee about the validity, currency, accuracy, completeness, or adequacy of the content in this article that does not relate to QBE’s insurance products. Readers relying on this content do so at their own risk. It is the responsibility of the reader to evaluate the quality and accuracy of this content. Reference in this article (if any) to any specific product, process, or service, and links from this content to third-party websites (if any), do not constitute or imply an endorsement or recommendation by QBE and shall not be used for advertising or service/product endorsement purposes.
