Month: May 2012

When taking out public liability insurance there are two main options – you can use an insurance broker or you can go direct to the insurer.

Which option is best? That’s what we’ll attempt to answer in today’s article.

What Are Your Options?

There is no question that taking out business insurance, especially public liability, it important for any small business owner or operator.

In the past most businesses used a broker to assist with their insurance needs, however many small business owners, especially sole traders, are now going direct to the insurance companies in the belief that they can save a few dollars.

So is it a good idea to cut out the middle man and go straight to the insurance company rather than using a broker?

Insurance Broker

This is the traditional method that most business owners have used to seek advice and services on business insurance, and ultimately to take out the insurance policy.

An insurance broker will generally assess you and your business’s needs, and will then provide you with advice and recommendations on what types of cover you need and how much cover you need.

Additionally, the broker will help you to choose the specific insurance company and policy that is going to provide you with the best value for money.

Advantages

• They can provide personal advice and recommendations on your needs
• They can compare the coverage and quotes from numerous insurers at once
• You can rely on their experience and expertise in the insurance industry
• You can deal with a single broker who will get to know you and your business
• They will be there to assist you with any future claims or issues

Disadvantages

• Some brokers charge an additional broker fee on top of the premium
• Some people don’t like the ‘salesman’ aspect associated with some brokers
• It can be difficult to tell a good insurance broker from a salesman

Direct Insurance

A number of Australian insurance companies are increasingly targeting small businesses directly instead of going via insurance brokers.

The benefit to the insurance company is that they can avoid paying a commission to the broker and they can manage the client relationship themselves instead of leaving it to the broker.

As most insurance companies do not have branches or offices which are open to the public, they generally rely on the internet and their call centres to manage all client interactions.

This model is generally cheaper for them, and as a result they can sometimes offer insurance more cheaply than an insurer who uses insurance broker to distribute their products.

Advantages

• Cuts out another person involved in the process
• Can seem like a more simple process when dealing directly
• Some people have more trust in a brand name insurance company
• Avoids potential broker fees that some brokers charge

Disadvantages

• Call centre staff are generally not authorised to provide advice or make recommendations, they can only provide facts
• If comparing quotes, you need to contact each insurer separately
• You will generally deal with a different person every time you contact the insurer

Which Is Best?

It is difficult to give a single answer, as each person and business is different and will have different needs.

Ultimately an insurance broker will be able to look after you better due to the fact that they are licensed to give you personal advice, whereas an insurance company employee will generally only be authorised to provide you with factual information rather than advice or recommendations.

If you run a micro business as a sole trader, and your business operations are quite straightforward, then you may well be better off dealing with an insurance company directly due to the probable lower cost.

But if you are going to look after you own insurance by going direct to the insurer, make sure you have a very good understanding of exactly what it is you need. If you get it wrong, you will be left with no one to blame or seek damages from.

But if you manage a business that has staff members or faces higher risks, then most people would agree that a broker will be better positioned to look after your needs and ensure that you and your business are properly protected.

Everyone in business knows that cash flow is king.

Anything that can improve your cash flow is good, and one of the easiest ways to do this is through paying your business insurance monthly.

Most forms of business insurance, including public liability cover, can be paid via a monthly payment plan.

How it Works

Paying your business insurance monthly is a fairly straightforward concept. Instead of paying a large lump sum amount upfront, you simply pay for your insurance over a period of time using monthly payments.

There are two different ways in which businesses can obtain a monthly insurance policy.

The first is where the insurer offers a monthly plan. In this case the monthly premium is simply split into twelve equal payments, and the insurer may or may not add a small amount extra for the convenience.

Not all insurance companies offer monthly payments, however there is still a way to pay your insurance monthly even though the insurer doesn’t offer this option. This brings us to the second method, which is known as premium funding.

Premium Funding

Many of the large business insurance providers only offer annual policies without the option for monthly payments, but there are other companies known as premium funders who can get around this for you.

The premium funding company lends you the money for the annual premium and pays it directly to the insurance company. You then repay the premium funding company in monthly instalments.

This was the insurer gets their full annual premium up front, and you still get to pay the premium monthly.

Because the premium funder is essentially lending you the money, they will generally charge a flat rate of interest on the premium amount. This is where you need to decide whether or not it’s worthwhile paying the extra for the convenience of monthly payments.

Advantages

The major advantage of paying your business insurance monthly is the improvement to your cash flow.

Instead of having to come up with a lump sum amount at the start of each policy period, you can instead spread the premium over the whole year, which frees up money in the mean time for other productive uses.

Monthly insurance payments are also very popular with new businesses, as it reduces the amount of money required upfront and allows the premiums to be paid as the business earns money.

Disadvantages

The main disadvantage to paying monthly is the increased cost that usually accompanies monthly insurance payments.

Whether you pay monthly directly to the insurance company or via a premium funding facility, the insurance will generally cost you more over the full policy period when paying monthly.

Monthly Insurance at No Extra Cost

There are a number of insurers who offer monthly payments at no extra cost, however things aren’t always as they seem.

Often when someone offers monthly repayments at no extra cost it simply means that the extra amount has been built into the premium. This means that everyone is paying extra.

There is no point going with someone who offers monthly payments at no extra cost if the insurance is more expensive anyway. As always, it is important to do your research.

Monthly Quotes

If you are dealing with an insurance broker they will be able to provide you with monthly quotes both direct from the insurer (where available) and also via premium funding.

When obtaining monthly quotes it is important to ask the broker or insurance company if there are any extra fees included, as some will charge you an additional service fee upfront.

If you are charged an upfront service fee it is not necessarily a bad thing. Some premium funding companies charge a fee of say $50 upfront, but then your monthly repayments will be slightly lower, resulting in a cheaper overall package.

When comparing monthly quotes it is best to compare the total cost over the twelve months, rather than just comparing a single monthly payment.

Paying for your business insurance, including public liability insurance, can be a great option for many businesses. For more information speak with your insurance broker or get in touch with us.

One of Australia’s best known providers of public liability cover is CGU.

CGU provide a range of different types of insurance to suit Australians, with a strong focus on business insurance.

As part of the Insurance Australia Group (IAG),CGU form part of one of the largest general insurance organisations in the country.

Focused on Brokers

CGU is somewhat unique amongst Australian insurance companies as they provide their products primarily via the insurance broker channel.

By using insurance brokers and other industry professionals, CGU can ensure that all of their clients are receiving expert insurance advice from qualified professionals.

Although the sales process is predominantly handled by brokers, CGU are still there to provide assistance to clients when needed, included during the claims process.

Policies Offered

The range of insurance products offered by CGU stretch from basic personal policies such as home and motor vehicle, through to more complex business insurance policies such as public liability insurance and professional indemnity cover.

CGU’s range of products and services are split into four main categories, which are personal, small to medium business (SME), corporate and workers compensation.

If you are reading our website it is most likely that you are mainly interested in CGU public liability insurance, however it is good to know that CGU can also look after you other needs such as commercial motor cover and other forms of business insurance.

Public Liability Insurance

CGU offer public liability insurance to a wide range of Australian businesses, both large and small. Whether you’re a tradie needing insurance for a sole trader or a large national corporate, CGU will have a public liability package to suit you.

If you don’t know what public liability is, you can read our guide titled ‘what is public liability insurance‘. Basically it is a type of insurance intended to cover your business if someone else suffers a loss due to your actions or negligence.

History of CGU

CGU have been helping businesses with their insurance needs for over 160 years in Australia, and have evolved into one of the country’s largest broker-based insurers.

Today CGU have corporate offices around Australia, with hundreds of staff assisting both personal customers as well as the brokers who have their own offices scattered throughout Australia.

Quotes and Assistance

Unlike many insurance companies who offer quotes via their website or call centres, CGU only provide quotes via insurance brokers and other intermediaries.

As one of Australia’s leading general insurance companies you will find that most insurance brokers will be able to provide you with quotes for CGU public liability insurance and other forms of cover.

If your broker is not able or is unwilling to provide quotes for CGU insurance, then you should certainly ask them why not!

Here at the Public Liability Insurance Australia website we have access to a network of insurance brokers around the country, many of which have access to CGU products. These brokers are qualified to provide service and advice on a range of insurance policies.

For more information on CGU public liability insurance please speak with your insurance broker. If you do not yet have a broker please complete out online quote form and we will put you in contact with a broker who can help you.

It’s a question that many business owners will ask themselves, especially at the moment when keeping costs under control is so important.

Insurance is one of those things that many people don’t appreciate until they need it most. When you’re looking to save a few dollars it can be very tempting to cancel an existing policy, or for a new business, to not take out public liability insurance at all.

But holding public liability insurance can actually be one of the best investments that you make in your business life. After all, why would you work so hard to build your business and then risk it all by not protecting yourself?

Before we delve into whether or not you need or should have public liability insurance, it is important to first understand exactly what this cover is and what it means to your business.

What is Public Liability Insurance?

As a business owner you will understand better than anyone the risks that are faced in business every day.

There are some risks that you cannot control, some that you can control completely, and a lot of others that sit somewhere in between.

Public liability insurance was designed to protect businesses against the financial consequences of a range of risks. These risks include property damage, personal injury and certain other forms of loss that are suffered by another person or business due to your activities.

A public liability policy can cover the costs of anything from a minor property damage claim worth a few hundred dollars, all the way through to a multiple fatality claim that could climb well into the millions.

So what is public liability insurance? It is the cheapest form of peace of mind for business owners.

How important is it?

Public liability is commonly considered to be one of the most important forms of insurance for any business, from a sole traderthrough to an ASX listed corporation.

Without public liability insurance, many of the claims could potentially cripple a company. How many sole traders could afford to pay tens of thousands of dollars at short notice? How many larger companies could afford to cover a few million?

Public liability insurance has saved countless small and large businesses from the financial costs of accidents and mishaps, and even events where the business was shown to be negligent.

Do I really need it?

Unfortunately there are thousands of businesses around Australia that do not have public liability insurance. Fortunately for many of them they will get away with it, but not everyone is so lucky.

You could certainly take the risk of not holding public liability cover, but considering how affordable the insurance is for most businesses, it would certainly seem to be a risk not worth taking.

There are some businesses that can legitimately do without public liability insurance. These are generally home based businesses that do not have clients or other people visiting the home premises, and do not undertake any manual work at client’s premises.

Whilst these businesses can get away without public liability, their premiums are so low due to their low risk that they might as well take out some cover just in case.

What’s the cheapest option?

Taking out the cheapest public liability insurance policy you can find may not be the best option for you and your business, but it is certainly better than the alternative of having no cover at all.

Just because the cheapest policy is not always the best does not mean that the best policy, or even just an adequate policy, has to be expensive.

Public Liability Quotes

By shopping around it is possible for most businesses to obtain affordable cover. The best option is to compare public liability insurance quotes from a range of different insurers, comparing not only the cost but also the features and benefits.

Finding the best value insurance policy is important, but it is also vital to ensure that any policy you choose is going to suit the needs of your business and protect you when you need it most.

It is often said that small business is the engine room of Australia.

There are hundreds of different types of small business in Australia, but almost all of them have one thing in common, which is the need for public liability insurance.

Accidents happen in business every day. Sometimes they are due to negligence and sometimes they are simply pure accidents. Either way, if you cause property damage or personal injury to another person through your business activities, it is going to cost you.

Many such claims can be large enough to wipe out a few months or even a few years of profit, and in some cases the sums involved are serious enough to bankrupt a company and potentially its owners.

The easiest way to avoid such problems is to have a suitable small business public liability insurance policy in place.

Public Liability for Small Business

A public liability insurance policy can protect a small business by covering the financial costs of any claim against the business.

Public liability covers a range of different scenarios from someone injuring themselves on your premises, through to property damage that you cause whilst working at their home or business premises.

Claims involving serious injury or death can mount into the millions in some cases, and this would certainly wipe out most small businesses. However with the most basic public liability policy covering up to $5 million you can rest assured that you business is protected.

Mobile Business

Many small businesses in Australia operate as mobile businesses. Tradesmen and women feature prominently in this category, however there are a huge range of other business types including cleaners and other service providers who also operate mobile businesses.

Often a mobile business will operate from home, however the only work done at home is paperwork and there are no visits to the home by clients. In this case a mobile business owner needs only to insure the work they do away from home.

A number of Australian insurance companies have identified this need, and have created public liability insurance policies specifically designed for small businesses not operating from their own workshop or premises.

Professional Services

Professional service providers such as mortgage brokers and financial advisers can fall into two categories when it comes to public liability insurance requirements.

Some advisers and consultants operate from an office where clients will visit them, however many operate as mobile services visiting clients at their home or office.

For professionals with their own premises public liability insurance will be a must, however if you do all of your work on the road and have no client contact at your own home or office you may not require public liability insurance.

If you are unsure whether or not your small business requires public liability you should speak with your insurance broker or other insurance professional.

Obtaining Quotes

Quotes for small business public liability insurance can be obtained directly from the insurance companies in some cases, however some of the insurers will only offer quotes via insurance brokers.

Here at Public Liability Insurance Australia we have a network of insurance brokers who assist small businesses Australia with quotes and service on their insurance needs.

To obtain a public liability insurance online quote from us simply click on the quote button and complete your business details.

Comparing Liability Quotes

Regardless of how you obtain your insurance quotes, it is important to compare the quotes to ensure you are obtaining the best value public liability insurance for your small business.

Whilst most public liability policies are very similar in terms of their core features and benefits, there are some extra benefitsavailable on certain policies which are worth considering.

When running a small business it is important to keep an eye on the business’s fixed costs, but it is important not to fall into the trap of simply choosing the cheapest public liability insurance policy that you can find.

Sometimes the cheapest policy will be suitable, but you need to make sure that the policy is going to meet all of your needs and not let you down at claim time.

For more information on small business public liability insurance please speak with your insurance broker or get in contact with us for an obligation free chat.