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Business Services - Common Problems
Inadequate insurance cover
The business has not taken out sufficient insurance to cover a major catastrophe. Should a catastrophe occur, the business will be unable to recover the uninsured loss through its trading activities.
Indicators
The insurance premium is an insignificant amount in the profit and loss statement.
The insurance policy has not been reviewed for some time.
There is no single employee who is responsible for the maintenance of sufficient insurance cover.
Management is unaware of the extent of cover the business has or needs.
Causes of the problem
Insufficient importance has been attached to the annual review of the insurance policy.
No single employee has been given the responsibility of maintaining an adequate insurance cover.
The business has received either no advice or incorrect advice regarding its insurance needs.
Detailed investigation into different policy options has not been conducted.
Short term solutions
Examine the current insurance policy.
Appoint one person the responsibility of: (a) analysing the businesses' requirements; and (b) liaising with a qualified insurance broker.
Ensure that the business's current needs are being met by the current policy.
Long term solutions
Create a system that ensures that every time a policy is renewed, the requirements of the business are once again analysed and the new policy incorporates these changing needs.
Ensure that the employee responsible has a full understanding of the business's exposure and the procedure for claiming (including waiting periods).
