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Now is the time for that annual insurance review: Sharon Fox-Slater

It's the start of a fresh financial year, which makes now the ideal time to check your business insurances are meeting your needs, says Sharon Fox-Slater.

A new financial year has dawned and chances are you’re busy setting some fresh business goals while gathering all your paperwork for your tax agent. While reviewing the insurances on your RE business might not be at the top of your list, now just might be the best time to do so.

Many small business owners take out insurance at the start of the financial year, so their renewal date is right about now. Even if your renewal isn’t approaching, the fact you have your paperwork out (as most business insurance premiums are tax deductible), reviewing your policies now might be timely and cost-effective.

When you review and renew your insurance, you need to consider your business and how it has moved in the past year. Things often change and you may find you are exposed to new or different risks and you need to have the right cover in place.

There are five common types of insurance most RE agencies take out. To help ensure your business is adequately protected, consider these key questions:

  1. Professional indemnity
    – Have there been changes to your customer base? For example, are you now handling commercial property as well as residential?
    – Have there been changes to your requirement to have PI cover? For example, have you entered into contracts requiring a higher level of cover or have licensing requirements changed?
    – Has the source of agency income changed? For example, is more revenue now generated through off-the-plan sales or by giving valuations?
  2. Business insurance
    – Have you moved premises?
    – Have you purchased new equipment or contents?
    – Have you made improvements to the building?
    – Has revenue significantly increased or decreased? This can affect your Business Interruption cover.
  3. Public liability
    – Has the way you do business changed? For example, are you and your team on the road all the time or office-based?
    – Do you engage in activities that might increase the risk of third-party property damage, such as staging properties or cleaning?
    – Have the types of properties (commercial or residential) on your rent roll changed?
    – Do you engage subcontractors?
  4. Management liability
    – Has there been a change in management or business structure?
    – Has your business merged with or acquired another? Have you become/ceased to be part of a franchise?
    – Have there been changes to legislation that impacts your business?
    – Have there been any changes to trusts?
    – Does your policy cover all the risks you currently face? For example, employment practices liability, cyber liability, crime protection and statutory liability.
  5. Workers’ compensation
    – Have there been changes to staff levels?
    – Have remuneration levels changed?
    – Have there been any changes to the type of work your employees do?
    – If you don’t have employees, you should check that your personal insurances (life, accident and income protection) are adequate for your needs.

When renewing your policy, it is important to check all of the information you originally supplied to the insurer is still correct. If there have been any changes to your circumstances, you need to advise the insurer.

At EBM RentCover we value the partnerships we have with property professionals and want to ensure you have the tools and knowledge to confidently apply for, and manage, your business insurance policies.

We recommend REAs engage an insurance broker with experience in the industry, like our colleagues at EBM. A knowledgeable broker will take a holistic view of your RE business to help you identify and reduce challenges you may face.

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