Helping businesses navigate risks in 2024

Insurance plays a critical role in a business’s risk management toolkit to ensure it can confidently operate at its highest level and mitigate potential risks amid a barrage of local and global challenges.

Every business is different and so are the risks they face. To help your business succeed, you need to identify and assess the risks your business could potentially face and seek the help of an expert, like your Rothbury insurance broker.

So, how does insurance help mitigate business risks? Simply put, you buy protection against many business risks through insurance. Insurance works as a risk transfer instrument in order to cover losses following an insurable event to help your business bounce back and recover as quickly as possible.

From natural disasters to theft, it’s impossible to predict, let alone prevent, all future risks that could affect the critical activity of your business. For example, have you considered the impact of a power failure, or the cost of business interruption if equipment breaks down and your business is forced to close until it’s fixed.

Many Kiwis have experienced significant and ongoing impact first hand in the wake of the Auckland Anniversary floods and Cyclone Gabrielle. As of December 2023, The Insurance Council of New Zealand reported that insurers have fully settled 87% of all private insurance claims (99,798 claims valued at 2.7 billion) from these twin climate disasters. *

It's important for businesses to mitigate risks and have a business continuity plan - not only for peace of mind, but to help ensure business survival. This is where accessing the right insurance is vital and has proven to be a valuable investment, especially when disaster strikes.

Businesses are rarely static in nature as they change relative to market conditions, staffing levels, challenges and opportunities alike. As we settle into 2024, many businesses have already started planning for the year ahead and reflecting on what risks they need to prepare for and protect against. This is an optimal time to assess whether your insurance is still appropriate for the shape of your business now and the risks it could face over the coming year.

There is no such thing as a one size fits all insurance solution and businesses need tailored insurance solutions more than ever.

To help ensure your insurance is right for you, your Rothbury broker will take the time to:

• Understand your business, risk management strategy and risk tolerance to ensure your insurance cover is appropriate with the right balance of coverage, risk and affordability. This in turn can help you make informed risk decisions. For example, insurance discussions with your broker are an effective way to identify risks and promote discussions around ‘what would you do if this happened?’ (forming the basis of your business continuity plan).

• Provide quality advice about your insurance options such as alternative excesses or changes within your business, to reduce risks where possible.

• Discuss what you’re covered for under your insurance policies. All insurance policies have criteria to which clients must adhere and failure to do so may mean cover is denied in the event of a claim.

• Work closely with several insurers to secure the most suitable terms in order to achieve the best possible outcome for you.

It’s been tough for Kiwis businesses over the past few years and as a result, several may be considering making changes in 2024 to ensure business survival. In fact, 49% of New Zealand SMEs reported making business changes in 2023 with the most common being upgrading equipment and offering different products or services, according to Vero New Zealand. **

Such business changes may have implications for your insurance and some key factors to consider include:

• Has inflation impacted the value of your inventory?
• Have you changed your premises or warehouse locations?
• Do you need to upgrade your equipment, machinery or commercial vehicles?
• Are you planning to change or expand the range of products or services you offer?

All of the above and any other significant changes may affect your potential business risks and therefore, your insurance cover may need to be updated accordingly.