Many business owners assume that if they have insurance in place, they’re protected. According to Aweso Insurance Brokers Managing Director Grant Mason, that’s not always the case.
The Redcliffe-based insurance broker says many businesses are operating with outdated cover, misunderstood policy conditions or emerging risks that were not significant concerns just a few years ago.
“Many business owners focus on price or simply ticking a compliance box,” Grant said. “The real problems usually appear at claim time, when gaps in cover are discovered.”
The growing problem of underinsurance
One of the biggest issues Mason is seeing across the market is underinsurance.
Rising construction costs, inflation, labour shortages, equipment price increases and supply chain disruptions have significantly increased the cost of rebuilding and recovery following a loss.
“Many businesses are still insured based on figures that may have been accurate several years ago but no longer reflect today’s replacement costs,” Grant said.
He said some business owners also reduce cover during difficult economic conditions to lower premiums, potentially creating major exposure if a significant claim occurs.
Risks have changed
Mason believes business risk has evolved dramatically in recent years. Cybercrime, once considered primarily a threat to large corporations, is now affecting businesses of all sizes.
“Businesses are now dealing with phishing attacks, ransomware, invoice fraud and data breaches on a daily basis,” Grant said.
For healthcare providers, NDIS businesses and professional services firms handling sensitive information, the risks can be particularly significant.
Weather-related events are also having a greater impact on business operations, especially when combined with labour shortages, supply chain delays and rising repair costs.
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Business interruption is no longer just a storm problem
According to Mason, many businesses still associate business interruption with physical events such as fires or storms.
Today, interruptions can stem from cyber incidents, supplier issues, equipment failures, workforce shortages and infrastructure outages.
“Many businesses are surprised by how long recovery can realistically take in today’s environment,” Grant said.
The challenge is often not the initial disruption itself but the months that follow while repairs, replacements and operational recovery take place.
Preparing before problems occur
Mason said the businesses that recover most effectively are usually those that plan ahead.
“One of the biggest differences between businesses that recover well from unexpected disruptions and those that struggle is preparation,” Grant said.
“The strongest businesses are the ones that have already thought about ‘what if’ scenarios before something actually goes wrong.”
He believes insurance should no longer be treated as a once-a-year administrative task.
Instead, businesses should regularly review their operations, dependencies, contractual obligations and recovery plans to ensure their cover reflects the reality of how they operate today.
“Insurance can no longer be approached as a simple annual renewal exercise,” Grant said.
“Businesses need to regularly review how they operate, where their dependencies are, and what would happen if they suddenly couldn’t trade for an extended period.”
