A new partnership has been formed between licensee Crowe Horwath and Zurich, with the aim of reducing the underinsurance among small business owners.
Under the arrangement, small business clients will be advised on appropriate risk management strategies, including business expenses insurance, which will allow business operations to continue in the event of temporary injury or illness. Crowe Horwath and Zurich said the partnership was developed in response to the low awareness of the importance of business expenses insurance within the small to medium enterprise (SME) sector.
…insuring fixed business expenses specifically is often overlooked
Crowe Horwath Head of Insurance, Maurice Thaung, said many SMEs have not considered the material impact that sickness and injury could have on their business.
“We advise more than 200,000 SME clients and while most acknowledge the need for income protection, insuring fixed business expenses specifically is often overlooked.
“Without proper risk management strategies in place, many of these businesses would be forced to cease operating if the business owner were to suddenly fall ill or injure themselves for a prolonged period,” he said.
Zurich’s Head of Sales Strategies and Research – Life Risk, Andy Marshall, said Australia already has a huge underinsurance problem and business owners are failing to understand the difference between other types of insurance and business expenses insurance.
He said that according to Plan For Life figures, only 3.% of new annual premiums in 2010 were for business expense cover. Additional research cited by Zurich found that 92% of small business owners do not have business expenses cover.
“Many people believe that workers compensation, business interruption insurance, or even an income protection policy will cover fixed business expenses if they are unable to work due to sickness or injury. Personal income replacement cover is designed to cover up to 75 per cent of an individual’s taxable income from their business. If they have fixed business expenses and no business expenses cover, then they only have half the protection needed,” Mr Marshall said.
