When fires and floods hit, we can’t help thinking about insurance. Being uninsured could be a catastrophe, but we still grovel about paying the price. Now is the time to review, especially as premiums are sure to rise after the recent catastrophes Australia has experienced.
Go through your policy section by section and check if what’s covered is under- or overvalued. Put your broker to work on this — they should be actively helping you get the most affordable cover, not just sending you an invoice. Let’s look at what’s in a common foodservice or cafe package.
Fire cover
It’s probably a compulsory part of your lease and the landlord may nominate the insurer. Is the amount covered realistic? Would it get you back into business with the same type of equipment? Many places don’t have adequate cover, as has been discovered over summer. Prepare for the inevitable kitchen fires: do staff know how to use a fire extinguisher and blanket?
Equipment breakdown
It’s expensive, but is it worth the cost? Well-maintained equipment usually won’t need it, and the excess deducted from a claim can make it hardly worth the paperwork. Can you improve maintenance to cover this, particularly pre-summer for refrigeration and freezers?
Loss of stock cover
Premiums can be expensive, and proving a loss will be difficult. Temperature tracking on refrigeration is easy to install and sends an alert to your phone if there’s a fault. Investing in this could be a cheaper way to protect against fridge and freezer breakdowns. If you’re making a claim, an app such as Timestamp Camera is useful for documenting spoilage with photos and video.
Loss of profits cover
This is much easier to prove when you have credible sales and expense records and are able to show comparisons between the current affected period and previous months. How easy is this to access? If you have a cloud-based accounting system, it’s accessible from anywhere, even if you’ve lost computer equipment.
Vehicle insurance
More places manage home delivery with their own cars or bikes, which means vehicle insurance is a must. If staff use their own cars to do this, what are the insurance arrangements and do they have a current driver licence?
Workers compensation
It’s compulsory, and everyone who works for you is protected. What about the people who you have ‘informal pay arrangements’ with? They will definitely be making claims if they’re injured.
Public and product liability
This means covering your business for legal and compensation costs if you’re found liable to someone because you caused death or injury, loss or damage. Is $20 million necessary or would $10 million be enough? Product liability covers the pickles, sauces and meals you sell for consumption elsewhere. Make sure these goods have a decent profit margin to cover this.
Theft and burglary cover
How long since you reviewed the amount of ‘cash on premises’ you’re covered for? With most payments made on cards, could this amount and the premium be reduced? What about cyber crime and hacking? If robbery is a risk in your area, install back to base alarms that can be activated by staff in the event of a hold-up. Security cameras are inexpensive, and covering entrances and POS systems should be part of a standard fit-out.
Income protection insurance
Support you and your family if you can’t work. It’s less expensive if you’re young and choose a longer no-claim period. When my father died and left a young family for my mother to support, his foresight in having a policy like this was an incredible blessing.
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