10 things insurance brokers should know about their small business clients
By Lesley Parker
The key to choosing the right policy for small business clients is to have a good understanding of the business before you start your search. What’s truly at stake and how can it be covered?
Here are 10 questions for a broker to ask before and during the filtering process:
1. What sort of business is it?
Is it in the service industry or does it make and/or sell products? Some insurers have ‘off-the-shelf’ small business packages tailored for particular sectors, such as retail. If your client has special needs, however, you’ll need to tailor a more specific solution.
2. If the business is in the services sector, what sort of services does it provide?
If there’s potential for third-party loss or damage arising from negligent or inappropriate advice, you’ll need to consider the nature and level of financial lines cover, such as professional indemnity insurance.
3. If the business sells products, does it make them?
The broker may need to tailor a specific level of product liability cover.
4. What do the business premises look like?
The appropriate level of public liability cover will depend on the risk profile of the premises and whether the public has access to them and under what circumstances. The nature of the business will also be relevant – adventure tourism, for example, involves risky activities.
5. Is your client covering all the bases?
Have they thought about cover for employee dishonesty, loss of money, personal accident, illness or disability, product recall, tax audit, trade credit, income protection ...
6. Does the SME have business interruption cover?
Many small businesses don’t recover from an event such as a fire because of the financial impact of having to continue to meet overheads such as wages and rent while being unable to trade.
7. When was the last time the business reviewed the level of cover?
Many small business owners buy the same amount of insurance year to year, without considering changes in the market and to their business. They only realise they’re underinsured when they lodge a claim. Not insuring, or setting the sum insured too low to save on premium, is a false economy.
8. Should price be the only consideration?
Good claims service is vital in the event of a claim, not just to the small business but also to the broker’s chances of retaining a client.
9. What are the payment options?
Clients may not want to pay the full premium in advance. Some insurers offer instalment payments in certain circumstances. If that’s not available, premium funding will also smooth the impact on cash flow.
10. Where else can I go for information?
Insurance companies have much useful information on their websites, but brokers may also like to look at state government business portals that provide information to SMEs. Small Business Victoria, for instance, provides a guide to insurance at www.business.vic.gov.au.
Broker Buzz would like to acknowledge the assistance of Jonathan Poole of Allianz, Sue Repanellis of Suncorp and Keith Till of Zurich in creating this article.
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