The Small Business Insurance Basics & The Future Of Insurance

Small Biz Matters – a half hour program each week where you can work ON your business rather than IN it.
with Alexi Boyd from Boyd Office Management Services
Date: 28 May 2019

It’s a must. When you start a business you know you need insurance but like lots of things about starting or running a business; it can be confusing. What type of insurance do I need? What level of cover? Do I need public liability or professional indemnity, and what does that even mean?

And the biggest question of all is WHEN do I need insurance? When am I that important; making enough money or have a large enough risk where insurance becomes crucial?  And how do I even start to quantify all that I need insure?

Well who better to ask than the founder of Australia’s leading online small business insurance service, Michael Gottlieb. BizCover is an online platform that has changed the way micro, small and medium sized businesses buy insurance online. BizCover provides multiple insurance quotes instantly and the ability to select and purchase the right cover immediately, comparing cover from a range of insurers.

With over 100,000 clients worldwide (85,000 in Australia) Michael is brilliantly placed to offer his expert advice to Small Biz Matters listeners.

Welcome to the show Michael.

Topics we’ll be covering:

Are Aussie small business owners getting the right insurance?

• Always insure against the risks you can’t afford to pay. Having the right insurance is also crucial during periods of expansion. As your business grows you may also require an increased level of cover, particularly if you are taking on more employees or making more revenue. While in some industries having insurance is actually a legal or compliance related requirement.

Under-insurance is a real problem in Australia as 13% of SME’s don’t have any, and more than 20% of SME’s aren’t insured for what their business assets are worth! Why is this the case?

• A lack of education around insurance and risk is often the case, as SME’s are often triggered by an event, such as a new contract or a moment of business expansion, that prompts them to take out cover. Often they don’t know where to start. The first place to start is to look for the cover that suits your industry and profession, different industries have different risks.

What are the rules of risk? Do small business owners needs to insure against everything or are there some fundamentals to start with?

• Public liability, professional indemnity, personal accident, business contents and business interruption insurance are a good place to start. For example, if you’re a management consultant you would definitely want to take up professional indemnity insurance to protect against claims that come against you as a result of the advice you give. While business interruption insurance is the more general cover that can help in case of an unforeseen event that shuts down your business. This cover can provide you with a percentage of the income you may have needed while your business was offline to get you back up and running.
• Cyber crime is an emerging risk to consider for any business that operates or transacts online. In fact in 2017, Australia faced over 10 million cyber attacks and this number is set to keep growing. Cyber liability can cover you for data breaches, phishing and cyber fraud in the form of financial protection.

When should I make a claim and what is the process?

• There is a common misconception that a high proportion of claims are denied. In fact according to studies done by ASIC and APRA , the industry average for claims paid is around 90%.
• It’s important to remember to review your policy excess, so read the PDS (policy disclosure statement) carefully. If the claim amount is less than the excess, then it’s probably not worth claiming!
• To speed up the process, be sure to complete all the relevant information on the claims form and include any relevant documents when you put in your claim. This includes any photos, invoices or quotes. Once you’ve submitted your claim, and depending on the insurer, it can take 5-10 days for a claim to be assessed.

But what about the future of insurance in the wake of climate change?

• Climate change is a massive issue on the national agenda but also particularly topical with its connection to natural disasters and in turn it’s affect on insurance claims. Insurance companies and all business alike have an obligation to make changes, whether big or small to counteract climate change and reduce greenhouse gas emissions but also to prepare communities for the worst.

And how will digital disruption and AI impact big business and small businesses alike?

• Artificial intelligence and digital transformation are predicted to have an impact on insurance and it’s related technologies, from distribution to underwriting and pricing to claims. While small businesses may not think that AI is relevant to them, they should think again. A study by Pegasystems showed that only one third of people have used AI, while in actuality 77% have already implemented it – most commonly though an AI powered device.

To find out more go to their website: www.bizcover.com.au

About BizCover:

BizCover is Australia’s leading online business insurance service, founded in 2008, changing the way micro, small and medium sized businesses buy insurance online. BizCover provides multiple insurance quotes instantly and the ability to select and purchase the right cover immediately.  BizCover partners with leading insurers to provide cover for over 6000 occupations, transacting over 400,000 policies, and taking the hassle out of buying insurance for more than 85,000 businesses and counting.

About Michael:

Michael is an experienced 'start up' entrepreneur who has founded four insurance businesses since 2001, all of which have repeatedly won accolades in the insurance & technology arenas.  Michael’s key focus is on BizCover, which is Australia & NZ's only commercial insurance service where small businesses can instantly compare & buy their insurance online from leading insurers.