Over the past year, rising insurance premiums have been among the fastest rising costs for Australian businesses.
According to the Council of Small Business Organisations of Australia, premiums are expected to rise at least 10 per cent over the next year and many businesses are reporting increases of 30 per cent and above.
Unfortunately, this has been the experience for many hospitality businesses, especially if located parts of Australia exposed to natural perils such as flood or bushfire.
While the cost of Business Insurance is increasing, the good news is that with the right strategy and options this can be controlled.
Understand Your Risks
Every business is unique, with its own set of challenges and risks.
Whether you operate a bustling restaurant, a caravan park or a hotel, identifying potential risks such as property damage, liability claims and business interruption is essential for determining the appropriate insurance coverage needed to mitigate these risks.
What would it cost to re-build your property? Has you sum insured kept up with inflation? How long would it take to re-build your business?
The answers to these questions will be different for every business.
The Devil is in the Detail
It is likely that your insurer has imposed conditions on your insurance policy that you must adhere to.
For example, your fire protection equipment must be in working order and serviced as required. Some insurance policies even state the minimum number of extinguishers that must be in your kitchen.
Your liability policy may also require that you retain CCTV video for a certain number of days.
Failing to comply with your policy conditions could result in rejection of an insurance claim. It is very important that you discuss any condition with your insurance broker.
Review and Update Your Policies Regularly
Too often, insurance is a “set and forget” activity and only reviewed a few days before the policy renewal.
As your business grows, expands, or introduces new services, it’s essential to review and update your insurance policies. Your insurance broker should be accessible and meet with you to discuss changes in your business as they occur.
Importantly, the renewal of your insurance program should be a process that your broker commences well before the renewal date.
When a business calls us a few days before the expiry of their policy (having only just received the renewal invoice), it is usually too late to arrange an alternative quotation.
Early preparation of the insurance renewal will provide time for you to consider additional options.
Risk Management Practices
In addition to insurance coverage, implementing risk management practices is essential for reducing the likelihood and severity of insurance claims, ultimately lowering insurance premiums.
For example, investing in safety and security measures, such as fire detection systems and firefighting equipment, CCTV cameras, and employee training programs, can reduce the risk of property damage and liability claims.
Additionally, maintaining accurate records including incident and accident reports is important.
Work with an Experienced Insurance Broker
Running a hospitality business is rewarding but also challenging.
From property damage to liability claims, unforeseen events can threaten the success and reputation of your business. That’s why having the right insurance advice from an experienced insurance broker is crucial for safeguarding your business and investment against potential risks and uncertainties.
Your insurance broker should be a valuable resource for keeping you informed about industry trends and protect you with insurance coverage that is bespoke to your business.
