Why You Should Review Your Business Insurance 

As a small business owner there is always something that needs your attention, from looking after your customers to your marketing campaigns and accounting just to name a few. But one thing which shouldn’t be forgotten is reviewing your business insurance. 

It’s often one of those set and forget things that we just do, but in the event that you needed to make a claim, it’s important that you have all the right policies in place to help keep your business protected.  

Not being aware of what is included and excluded could cause a painful experience if you needed to lodge a claim, a drama you can live without.  

Our guide takes you through the basic steps on how to review your business insurance and what you need to keep in mind during the process.  


Understand the purpose of your cover  

Every business will have their own risks and need for different types of business insurance. This is a quick snapshot at some of the main types of business insurance available. It is always wise to check your product disclosure statement or talk to your insurer for the specific details of your business insurance policy. 

The first step to knowing what your coverage includes is to understand its purpose. This will depend on the type of your insurance. Read the below carefully: 

Public Liability*: is designed to provide protection for you and your business in the event a customer, supplier or a member of the public are injured (and not covered by the Accident Compensation Commission (ACC) ) or sustain property damage as a result of your negligent business activities. 

Professional Indemnity*: is an important form of protection for businesses that provide specialist services or professional advice. It is designed to respond to claims against your business for losses as a result of actual or alleged negligent acts or omissions in the provision of your professional service or advice. Professional Indemnity Insurance will also assist with the legal costs associated with responding to or managing claims which are covered by the policy. 

Business Insurance*: provides cover for the loss of income and increased costs of operating your business caused by a specified insured event (such as property damage or fire). It is also designed to assist your business to recover from an insured event by paying ongoing expenses (such as wages or rent). 

Some of the different types of Business Insurance options may include: 

  • Building* 
  • Property (Contents)* 
  • Business Interruption* 
  • Portable Equipment* 

Cyber Liability Insurance*– Covers you for losses from claims arising from data breaches, business interruption and remediation costs following an actual or threatened data breach. 


Get to know what’s covered and what’s not 

One of the fundamental parts of reviewing your business insurance, is getting into the nitty-gritty details, like what is covered, what is excluded, what are your coverage limits and if there are any sub-limits. 

This information is usually outlined in your product disclosure statement (PDS) and can usually be accessed online through your insurer if you need a copy. If there are areas of your policy that you are unsure of, please get in touch with your insurer and ask. 

Other than your PDS, you need to review the amount that you are covered for. This is something which you need to keep in mind because your business’ circumstances may have changed since you set this limit.  

For example, you may have purchased more business assets like equipment to help your business grow but haven’t increased your limit on your business contents policy to factor in this new equipment.  


The danger of under-insurance 

Underestimating the value of things like business buildings and assets for insurance purposes may in the short term save a few dollars each month on your premium but could have material financial consequences in the long run. If you are only insuring part of the value you are going to have to make up for the shortfall if an insurable event occurred.  

For example, if you insure a building which has a rebuild value of $800,000 for $600,000 and a fire burns the building to the ground, you’ll need to cover the extra $200,000 to rebuild at the same value.     


In addition, within most insurance policies is an “Average/Underinsurance Clause”, which essentially means the insurer may reduce the amount paid out and this reduction will be in proportion to the value of building to the value of the sum insured.   In the example above, if you made a claim for $600,000 as you are underinsured by 25% you would only get $450,000.  Your total shortfall for rebuilding will in fact be $350,000. 


Reviewing and updating your policy 

It’s very rare that things stay the same for long in the business game. Your business is likely to grow and contract in different areas like staffing, assets and turnover for example. Your business operations may even change to include some new types of business activities too. 

A good time to sit down and really go through your policy is when it comes up for renewal.  

Some of the things to consider when reviewing your policy may include: 

  • Has your business location changed? 
  • Have you hired/ decreased staff? 
  • Have you purchased more equipment for your business? 
  • Have you changed any of the security measures, like install extra alarms? 
  • Has any aspects of your business operations changed? Do you now include different kinds of services? If so make sure that these are also updated and noted on your business insurance policy 


Renewal time is an opportunity to give your business insurance policy a proper health-check. It gives you time to see if there are any significant gaps in your policy where you may need extra or a new form of cover to help keep your business protected. On the flip side, you may have sold assets or downsized your business and need to adjust your policy which may reduce your policy premium. 


Getting your business insurance should never be a hassle, and at BizCover we believe in making insurance easy. If you are looking at switching insurers or need a new policy, let us do the shopping  around for you. We provide multiple quotes from a great range of trusted leading insurers, saving you time so you can get back to the things that matter, like running your business! 

Get in touch with BizCover today and see how we can help protect your business in the click of a mouse. 

* This information is a general guide only and does not take into account your objectives, financial situation or needs.  As with any insurance, cover will be subject to the terms, conditions and exclusions contained in the policy wording. The information contained on this web page is general only and should not be relied upon as advice. 

The provision of the claims examples are for illustrative purposes only and should not be seen as an indication as to how any potential claim will be assessed or accepted. Cover for a claim will depend on the specific circumstances around the loss and would be subject to the terms and conditions of the policy concerned.

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