Members are often looking to cut fat out of their business expenses but this can backfire if you cut costs when buying insurance or other types of protection. Your risk provider stands behind you when disaster strikes, but only for the risks you have protected, and under-insuring or under-protecting may result in sustaining a loss that can send you broke.
Whether you are protected through Capricorn Risk Services or another provider, it is important that you take the time to review your protection annually to ensure you are adequately covered.
Clean-up costs can escalate quickly for motor businesses as a tyre retailer discovered when his property burnt down in 2014 and he did not have enough protection to recoup the loss. He had under protected both the stock and the building values. Significant costs for demolition and removing debris had to come out of an insufficient settlement payment.
Another workshop had failed to ensure their protection was sufficient to cover loss or damaged equipment, employees' tools of trade and customers' goods. It had also decided against taking business interruption cover, which would have provided income for the owner while the business couldn't trade.
Taking the time to properly review your coverage on your own or with a Capricorn Risk Account Manager can help business owners to identify potential losses and ensure they have the adequate protection in place. Typical areas where Members under-protect include:
- Underestimating the cost of rebuilding after a fire, and of replacing tools and equipment.
- Purchasing new equipment or inventory and not updating the level of your protection.
- Clean up costs following an accident, particularly if land or water is contaminated.
- Underestimating your Gross Profit for business interruption protection.
- Not considering taking out additional protection products your business may require such as Cyber Insurance or Management Liability.
The average time-poor business owner can find it hard to accurately estimate the cost of potential risks and to find appropriate protection, which is why it is important to talk to an expert in your industry and take the time to understand the specific risk of a business in the motor trades industry.
Business failure can be the ultimate cost of underprotection. Discuss your protection needs with Capricorn Risk Services.
*For a full list of risks protected please see Protect Against Risk.
Products sold through Capricorn Risk Services Pty Ltd (ABN 93 111 632 789) include discretionary risk protection and general insurance products. Discretionary risk protection is issued out of Australia by Capricorn Mutual Ltd. Before deciding to acquire any product you should consider the Product Disclosure Statement available from Capricorn Risk Services Pty Ltd to see if the product is appropriate for you. General insurance products are issued by a range of insurers and in Australia are brokered through Capricorn Insurance Services Pty Ltd. In New Zealand they are available through Capricorn Risk Services Pty Ltd as a member broker of PSC Connect NZ Limited. Capricorn Risk Services Pty Ltd is a registered financial services provider (390446) and a corporate Authorised Representative (No. 460893) of Capricorn Mutual Ltd (AFSL 230038) and Capricorn Insurance Services Pty Ltd (AFSL 435197).