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Under insurance can be as catastrophic to your business as seen with the recent Cyclone Debbie disaster

With insured losses from Cyclone Debbie already hitting almost half a billion dollars (from 46,817 claims), and residents and businesses in the disaster areas of Queensland and Northern NSW discovering they are woefully under-insured, or worse, not insured at all, it is all too apparent that being under insured is a huge risk to take.

It is estimated that between 70-80%of businesses are underinsured, and more than a quarter (26%) of SMEs have no form of general insurance, while as many as 40% of sole traders operate with no insurance whatsoever[1]. Protect your company with business insurance including Storm & flood Insurance.

Often people look first to insurance premiums when they are cutting business expenditure, rationalising that the chances are slim of losing their premises or all of their stock, but they should instead focus on what the outcome would be should they lose everything. Could they afford to start over again from scratch with their business?

For many, the answer is that it would be catastrophic. It would destroy their business.

It is important to have a Disaster Recovery Plan in place to protect your business against unexpected natural disasters. Emjay Insurance Brokers are the experts in ensuring your business has a Disaster Recovery plan in place. Speak to us today for more information.

Some decide instead to under-insure, without understanding that by doing that, insurers deem they have elected to take on some of the risk themselves.

For example, if a business is worth $250,000 but elects to insure for $125,000, and suffers a partial loss of $100,000, they won’t necessarily receive the full $100,000 from its insurer, because it is deemed to have taken on 50% of the risk, and therefore will be $50,000 out of pocket when it comes to paying for repairs. This may be the difference between sink or swim for a business.

Now is the time, with the memories of natural disasters fresh in our consciousness, to review your current insurance and assess if your business is adequately covered.

If you pay your premiums each year without much thought, then take the time to consider if you have made any improvements to your premises or equipment since last year.

  • Calculate actual replacement figures for your business, including cost to rebuild, replace stock or office equipment, and the cost of debris removal and other expenses.
  • Factor in intangible damage such as loss of income while you rebuild your business. If calculating accurately is difficult, consider a professional risk audit to ensure you have the correct calculations.
  • Understand what your excess is – how much will you need to pay upfront? The lower the excess, the higher the premiums generally, but weigh that up against how much you would be able to pay in a worst case scenario. Often the peace of mind that comes with higher premiums is worth it.

Is your business insured correctly? Many business owners are unaware of the risks which may arise outside the business which can significantly influence short term profitability and long term survival. Emjay Insurance Brokers are experts in protecting your business and providing risk management solutions. Speak to an Insurance consultant today on (02) 9796 0400 or send us an email at

[1] Insurance Council of Australia

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