It is extremely important that you review your insurance policies at minimum annually or more frequently if your business changes so that adequate protection is provided for your business. 


Your assets need to be insured for the cost to replace them at today’s prices, not what was paid in the past. Then, in the event of a major loss, your insurance will provide the right protection to enable you to re-build your business to today’s specifications. Research has shown that 70% of uninsured or underinsured businesses that incur a major insurable loss fail within the following year (Allan Manning, LMI Group) if they don’t have adequate insurance.

Building Costs – Rebuilding costs continue to rise so that last year’s replacement value may not be adequate this year. Furthermore, you need to take into account the cost of removal of debris, additional costs for rebuilding based on new building requirements due to changes to building codes, heritage issues (if applicable), legal and professional fees such as architects, engineers, surveyors, site conditions and zoning restrictions (to name a few) – all of which can have a major financial impact of the sum insured. 

Contents – needs to be insured for the replacement value, not the depreciated value you use in your accounting records. It is important to ensure that your contents remains adequate each year and takes into account any new additions. Also should include your office fitout (if applicable). Redundant contents, such as machines also need to be taken into account for replacement value or specifically noted as not insured under your policy. 

Stock – needs to reflect your stock holdings. Most policies have a seasonal increase cover, whereby if you have busy period, such as the lead up to Christmas or public holidays, the stock cover automatically increases under the policy. If this is applicable to you, review your peak periods and check the cover available under your policy, so that you have additional cover for these peak periods. 

Business Interruption – review your insurable profit based on historical turnover, taking into account any projected increases for the insurable period and thereafter as if a loss was to happen on the last day of the policy.

Liability and Professional Indemnity – review what changes have occurred within your business and assess whether your business may have an increased exposure due to factors such as the type of customers in which you look after, size of contracts, insurance obligations in contracts to name a few. 

Workers Compensation – at the end of the policy period you will be required to do a declaration of Actual Wages paid during the policy period and your policy will be adjusted if there is any variance and an additional premium or a refund may be due. You will also be required to declare your estimated wages to renew your policy. Also, remember to notify changes to your business to your insurer with in 14 days.

Disclaimer“This material contains general information only and may not suit your particular circumstances. To decide if a policy is right for you please carefully read the relevant Product Disclosure Statement (PDS) and/or Policy wording. While we have exercised due care and skill in preparing this information, Optimum Insurance Services (Optimum) does not accept any legal responsibility or liability for negligence or otherwise to you or anyone else who seeks to rely on this information. This includes, without limitation, loss arising from a possible failure of the information to comply with statutory or regulatory requirements or the failure of the information to identify other terms and conditions beyond those considered in this document. You should obtain advice to ensure that your policy provides adequate cover for your circumstances.

“Optimum Insurance Services Pty Ltd is a Corporate Authorised Representative of Insurance Advisernet Australia Pty Ltd (Car No. 291220), Australian Financial Services Licence No 240549, ABN 15 003 886 687.”

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Optimum Insurance Services Pty Ltd is a Corporate Authorised Representative (No. 291220) of Insurance Advisernet Australia Pty Ltd (AFSL No. 240549).


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