As business risks change and evolve, businesses must ensure their risk and insurance program still suits their needs.

Cyber-crime, climate change, natural catastrophes, bushfires, floods and storms are all real-world problems that businesses need to contend with in Australia. We also can’t ignore the recent COVID-19 virus that has posed significant problems for many SMEs. Then there is the Brexit challenge, as well as any trade fall outs that stem from COVID-19 and the interplay between China and the rest of the world (notably Australia, UK and US).

Let’s take a look at some of the problems that face Australian businesses and how the right type of insurance cover can reduce your risks and help to mitigate potential losses.

Cyber-crime and cyber insurance  

Cyber-crime costs the Australian economy more than $1 billion each year and it continues to climb. Recent research has found that 43% of all cyber-crime is targeted at SMEs with 53% of employees in medium sized businesses admitting to have compromised their employer’s networks. These problems stemmed from downloading apps, opening links in unverified emails and sharing these emails among work colleagues, and not updating software regularly.

Opening emails and embedded links from unverified sources cost businesses more than $60 million alone in 2018. Then there’s the fake invoices that are sent to customers and the loss of personal customer information. This is just the tip of the iceberg, but the take home message is that SMEs need to have a cyber policy in place, because it can easily happen to any business. Employees also need to be consistently and regularly trained about cyber-crime and how their actions can compromise their employer’s business. However, no business is infallible, meaning that even with the best of intentions, your business may become a victim of cyber-crime. This is why all SMEs need Cyber Insurance to reduce their risks should it ever occur to their business.

Inability to trade and Business Interruption Insurance

Natural disasters, loss of essential equipment and even arson, are all causes of businesses being unable to trade for a significant period of time. Bushfires, storms, cyclones and floods, someone stealing machinery that’s the focal point of your production line, an arsonist setting fire to your warehouse. These are all tragedies that can put your business out of action for days, weeks or months. So who pays your bills?

The building lease still needs to be paid, as well as the utility bills, suppliers, employees, work cover, and any other machinery, equipment and vehicle leases. Just because your business is unable to trade, doesn’t mean that your bills go away. This is where Business Interruption Insurance comes into play because it helps you pay these essential bills during the time you can’t trade. Always discuss these risks with an experienced insurance adviser so that your business has the cover that’s needed.

What about Brexit, trade fall outs and climate change?

Loss of supply chains and access to resources, Brexit, trade fall outs and climate change are all problems that may well be faced by SMEs in the near future. Your best option is to identify how these risks may affect your business and then put strategies and insurances in place to mitigate your risks. You can also leverage the expertise of your local insurance adviser who will be up to date on all potential challenges to your industry in the near future.

To speak to an insurance adviser about managing your businesses risks and safeguarding it against further challenges, contact Lisa Carter today.

General Advice Warning: This advice is general and does not take into account your objectives, financial situation or needs. You should consider whether the advice is appropriate for you and your personal circumstances. Before you make any decision about whether to acquire a certain product, you should obtain and read the relevant product disclosure statement.

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