At Stapleton Finance we’re a full service broker and we focus on a holistic offering. No matter what you require, we have a trusted network of business partners who can help. This year, we will be releasing a series of blogs showcasing our partners in a diverse range of industries. We have had working relationships with many of these for several years and together form part of our full service broker solution.
Featured in our first blog is Damien Mulvenna, director of Cornerstone Risk Group. The team at Cornerstone have over 40 years of insurance knowledge and expertise, with experience not only in the local insurance market, but with the wider global market including London. Gayle works very closely with Damien and the team at Cornerstone, sharing an office at Spring Hill!
We asked Damien to tell us a bit about underinsurance and its impact on business clients. This is what he had to say:
Underinsurance is a common theme in the insurance industry and something that Cornerstone Risk Group continually reinforces to our business clients. It has two main facets:
The Insurance Council of Australia’s 2015 report on non-insurance in the small and medium enterprise sector showed a non-insurance rate of 12.8%. Having no insurance is often due to being in denial and assuming that ‘it won’t happen to me’, coupled with businesses wanting to save money. Business owners may also opt to research insurance policies online, not fully understanding what they need cover for.
A recent research report compiled by Deloitte Access Economics showed that the risk of underinsurance is reduced for those that have an insurance broker, with 45% of new clients being underinsured prior to engaging an adviser. Insurance is like any other industry that provides expert opinion. Would you trust a self-diagnosis online, or professional advice from your doctor?
At Cornerstone the top three types of under insurance we experience are:
This is often due to coverage being limited to business premises only, and not including consideration of other types of financial loss. Other risks include insurance cover not being updated with changed circumstances, and the ‘sum insured’ not being enough to cover losses due to out-of-date policies. Cyber insurance is also becoming more important, with technology enabling cyber criminals and hackers to continually increase in sophistication.
It can be very tempting for businesses (particularly when first starting out) to cut corners and try to save money. Online insurance options and price comparison websites make it easy to identify the cheapest policy available, but in most cases the lower the premium, the narrower the cover. It may be quick and easy to find the cheapest policy. However, it’s difficult to understand exactly what type of insurance your business requires for protection. Taking the cheap option could mean that your policy doesn’t offer adequate protection when you need it. It’s vital to have a broker who knows insurance inside and out, and can help you through the entire process.
Businesses can grow and change substantially in the space of 12 months. That’s why it is important to review all your insurance requirements and current uninsured exposure frequently. At Cornerstone we commenced working with a client approximately one year ago. He was starting a new business with a turnover of $250,000 and a staff of two being himself and his wife. After 12 months we met to discuss any changes to his business. At that time we found out he was estimating a turnover of $20,000,000 with 44 staff.
In this case the exposure for the client had increased significantly due to his growth in turnover and staff. While the business activities had stayed the same, we needed to look at additional products. This included management liability, cyber insurance, and increasing stock level covers and liability limits. This example may seem obvious as the changes are significant. But there can also be small changes in your business that could leave you underinsured. Assessing your insurance requirements regularly will ensure that nothing is missed.
Disclaimer: Any general advice in this article does not take account of your personal objectives, financial situation and needs.
Cornerstone Risk Group provides a full insurance solution – from arranging your business policy, to providing advice throughout the claims process and managing it on your behalf, and reviewing your policies to make sure you’re protected. They specialise in all forms of business, commercial and personal insurances. Working with Stapleton Finance, they form part of our full service broker solution
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