Small business insurance with Crombie Lockwood

Crombie Lockwood Regional Branch Director Brett Down walks us through some FAQs when it comes to business insurance and the support you can gain from enlisting a broker. 

Why do businesses owners need to have insurance and what types are a must have?

Insurance is about positioning your business to remain financially viable should an unintended or unforeseen event occur.

What types of insurance a particular business will require depends on the unique needs of each individual business.

For example, an architect will be less concerned with physical asset damage but more concerned about potential liability should an error in their work occur. A retail shop however would definitely be interested in protecting themselves against physical damage to their store.

While there are similarities across industry types or sectors, business life stage also comes into the equation so it’s not always a simple “one size fits all” solution when it comes to insurance.

Why should SME businesses owners enlist the services of an insurance broker?

An insurance broker acts as a trusted business advisor – just like your accountant or your lawyer. They work alongside you to understand your business and in doing so provides proactive insurance advice and risk management solutions to ensure that as a business owner you can make informed decisions about the appropriate insurance for your business.

Your relationship with your insurance broker grows over the years and as change in your business occurs so too does the risk profile of your business. Such change often necessitates changes to your insurance programme.

How can an insurance broker help save a business owner money on their insurance?

A businesses insurance programme cannot be set and forget and must be reviewed at a minimum annually but also more regularly if things change throughout the year. For example, if a business adds more vehicles to their fleet or purchases another asset, you should call your insurance broker and let them know.

As one of your trusted business advisors, an insurance broker will work proactively alongside a business owner to ensure a robust and suitable an insurance programme is always in place. Suitability can be judged by cover placed and includes conditions, benefits and premium cost.

We work with our clients to achieve cost efficiencies by reviewing sums insured, regularly reviewing the insurers who are on a client’s insurance programme to make sure they remain competitive with the wider insurance market, and looking at such options such as higher deductibles or longer deferment periods on policies that reflect the level of risk a business owners is prepared to carry themselves.

How does the process of working with an insurance broker typically work?

Our role as an insurance broker is to understand insurance and provide technical expertise in this space. We’re working in insurance everyday so intimately understand the insurance market and we have established relationships with the insurers.

As an insurance broker, while we have knowledge of different industries and business sectors, we know that your business is also unique and we respect that we need to get to understand you and your business and what you want from an insurance programme.

Once we establish the goals of the programme we work with the insurance market to come up with options that will protect your business so as a business owner you can make an informed decision around how to best protect your business.

Once a decision is made, we act as your broker to bind the chosen covers on your behalf and arrange the appropriate documentation. We then becomes your contact for your ongoing insurance related needs including when or if you need to make a claim.

What are some of the challenges /risks business owners are currently facing when it comes to insurance? 

Two major challenges today are the financial effects on businesses of COVID-19, and cyber-crime which in the new world of flexibility, connectivity and working from home has increased. 

Cover for financial loss as a result of COVID-19 is not currently available (although we are seeing this legally tested overseas at the moment) so businesses need to be aware so they can plan accordingly. 

Cyber-crime on the other hand, is an insurable event and we are regularly assisting clients, from florists to some of New Zealand’s largest corporates, with the ever increasing exposure they face in this area. 

Cyber insurance is not built in to any existing product, it is a standalone cover and if a business has not discussed this yet with their broker, I suggest doing so as soon as possible.   

What are some benefits of the current climate when it comes to insurance (if any)?

Next March, the insurance industry will become regulated under the Financial Services Legislation Amendment Act.  This means in order to continue to operate, an insurance broker going forward will need to be professionally qualified and meet legislated compliance standards. 

We absolutely welcome this change as it will see the professionalism of the whole industry raised to an equal standard. We have always been a client centric business focused on great client outcomes but these changes gives clients the benefit of further safeguards when working with an insurance provider.

How can a business owner prepare for a first meeting with a broker? I.e. what do they need to bring / ask etc? 

The first meeting is a chemistry check between parties and a discovery meeting to begin the process of building a strong relationship and insurance programme to suit your business. So as a business owner try not to come to the first meeting with preconceived ideas about what your insurance programme should look like. It is beneficial to have your financials with you and an asset schedule, but come prepared to talk passionately about your business now and future aspirations. 

A quality insurance broker will be able to take that information as a start and from there, provide you with the options you need in order to make informed decisions about the insurance options available to protect your business

Anything else you would like to add that could be of benefit to small business owners?

Don’t feel that you need to be an expert in insurance.  That’s our job!  We want you to focus on growing your business, looking after your staff, exceeding your client’s expectations and let us be your trusted advisor when it comes to insurance so you can sleep well at night – comfortable in the knowledge that you can financially survive an insurable event. 

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