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Understanding your personal Financial risk…What’s it worth to you?

It is an unfortunate fact that a number of Australians will experience a financial loss at some point. Insurance is about protecting your business, residential property and yourself from a loss that you may otherwise find difficult to financially recover from.

There are more than 8 million households in Australia and over 48% of these are under-insured or have no building or contents insurance at all.

Do you know your Financial risk?

Of the more than two million small businesses in Australia, over 50% have no business interruption insurance and 26% have no insurance at all. This is reflected across most classes of insurance including life and income protection.

A few years ago, The Australian and New Zealand Insurance Institute along with many partners put together a network of information, tools and applications all concerned with providing access to useful information and improving community protection and resilience and access to all of this is FREE!!!

Called “Know Risk” this service is available at www.knowrisk.com.au.

The Know Risk website includes all manner of information, tips, tools, videos and much more which provides interesting, and easy to understand ways to plan for the risks that we all face.

We wanted to share a very topical article from this site, about running a business from a home, and what risks this entails.

The Know Risk article highlights that one of the perils of running a business from home is the potential insurance quandary – is home and contents insurance (with Liability for the business separately) enough or do you require specific business insurance?

The answer will depend on a variety of things, all of which will be different from one situation to another. Even the staff of a large company permitted to work from home presents more questions.

When will home and contents cover be enough?

The answer to this question will depend on a few things. Firstly, most (but not all) combined home and contents insurance policies will provide cover for tools of the trade and home office equipment to some degree — that degree being up to a certain monetary amount. This means that if your home is affected by a fire or some other type of natural disaster, or if the washing machine overflows and your work-related equipment finds itself underwater, you’ll be covered up to a certain amount.

The monetary figure will vary from policy to policy, so have a look at your existing home and contents insurance policy and see what you are covered for. Is the sum insured enough given the volume and value of any work-related equipment you have in your home? It’s worth noting that the monetary figure in question here is typically not as extensive in a home and contents policy as that of a business-specific policy.

What other types of risks are usually not covered for my business in a home and contents policy?

Aside from office equipment being capped at a lower figure (if they are, indeed, included) home and contents insurance policies do have other coverage shortcomings that don’t fall into this category.

For example, home policies won’t cover:

  • Business Interruption
  • Money
  • Accidental Injury
  • Equipment breakdown
  • Income Protection
  • General Property for office equipment outside the home (eg laptops)

Also not covered are any of the insurances that are required by law depending on the nature of your business, such as workers compensation or such policies specific to your industry - Public Liability or Professional Indemnity for your Travel Business.

Things would be much simpler if there was a dedicated home-based business insurance policy

There are very few available that will cover some of these gaps, but in general though, if you do run your business from home, it’s a good idea to have a chat to your broker to make sure you aren’t exposing yourself to any unnecessary risk, as well as to be sure that if something does go wrong, your business won’t be adversely affected.

More about “Know Risk”

The Know Risk has an app, and whilst it is easy enough to joke that “there’s an app for that”, I encourage you to have a look at this website and see if it can be of assistance to you both in your personal and business situations.

If you believe that this issue is relevant to your business, please feel free to contact Rebecca Fleming, Account Manager of our Travel Industry Division at Gow-Gates Insurance Brokers on (02) 8267 9919 or rfleming@gowates.com.au to discuss your circumstances or to obtain a quotation.

Gow-Gates Insurance Brokers advises that persons should not act on the material contained in this article as the items are of a general nature only and may be misinterpreted. We therefore recommend that advice be sought before acting in these areas.

Gow-Gates Management Liability Insurance