Though the risks faced by small and large businesses may be broadly similar in nature, the cover required for a small business often involves a much more tailored approach.
According to AA Insurance, which recently released its Small Business Insurance product to the New Zealand market, small businesses often don’t need the ‘bells and whistles’ attached to policies aimed towards large corporates, which currently make up a vast chunk of the market. This means they often end up paying for cover that doesn’t fit their unique risks, with a lack of broker advice potentially contributing towards them being left with badly suited insurance.
“Small businesses tend to be time poor and often have relatively simple needs, so we’ve tried to develop a solution that makes it easy for them to access the type of insurance they require,” AA head of claims Simon Hobbs told Insurance Business.
“Kiwis who strike out on their own often face risks and responsibilities they may not even be aware of until it’s too late. This is a customer-focused solution that enables small business owners to determine the types of cover they need.”
The new product’s policy modules include cover for commercial vehicles, material damage and business interruption, among other risks. With small businesses driving a significant chunk of the New Zealand economy, Hobbs says it is important for owners to recognise when they are wearing an ‘ill-fitting suit.’
According to insurance adviser and director of Balance Advisers Gareth Wallace, it is also vital for the broker to stay on top of the risks their clients face to ensure their policies remain well tailored to them over time.
“The smallest things could change the risks for a business,” Wallace said. “So it becomes very important for the broker to stay on top of that. One example I’ve seen in the past is a restaurant business that changed the type of fat they were using after 26 years because their profits were getting squeezed, and that change unfortunately led to a fire.
“That’s why it’s always important to go out and see your clients, because you can personally identify these risks,” he added. “Time-poor businesses don’t tend to think about the consequences of risks, and that’s really the role of the broker.”
