A Close Shave with Underinsurance
Just as your business is growing and changing it’s important to make sure that your Insurance grows with your business and you’re not left exposed. A large number of small businesses in Australia are underinsured and many don’t even realise it.
Take Samantha*, a hair salon owner operating in the Greater Sydney Area.
Samantha purchased her salon 4 years ago and like any good business owner, covered her business with Business Insurance.
For the next 4 years Samantha grew her business and made investments into the Salon, upgrading the chairs, interiors and other equipment.
It wasn’t until one day chatting to her sister that she realised there was an issue.
As the value of her assets was now a lot higher, the amount she would need to claim should something happen was now also higher, which meant that she was dangerously underinsured.
Her sister also asked her what she would do if she had to shut the salon for a few days; a prospect that brings dread to any small business owner.
Samantha realised that she would struggle to cover costs if her business was shut for more than a few days and quickly picked up some business interruption cover when she amended her existing cover.
Fast forward to just a few weeks ago, during the recent Sydney storms; Samantha was treating a client when the client pointed out that the roof had started leaking. That leak soon turned into a waterfall, so with electrical equipment nearby the shop was quickly emptied, the electricity turned off and help called.
The Salon was shut for two days as investigations into the leak were made.
As it turned out, the business had to shut for a further 4 days whilst temporary repairs were made.
While her landlord’s insurance covered the repairs to the roof, it did not cover her for the loss of income of so many days closed. Luckily, the Business Interruption insurance that Samantha had added to her cover compensated her for the initial 2 days closed plus any further days she had to close the shop for the final repairs to be completed.
This is a story with a happy ending, but with wild weather, blackouts and other natural disasters becoming more and more common, there are many businesses that are getting caught out. It is worth taking a little bit of time to stop and review your current cover.
If you are a BizCover customer you can increase or make amendments to your cover by contacting our Service department on 1300 549 568.
*Names have been changed to protect privacy.