Short answer: life happens. With the best planning in the world you will still sometimes have to deal with the unexpected and when it happens to your livelihood the unexpected can trip a cascade effect and balloon into a disaster scenario.
If you’re in business it’s unwise to rely on your bankroll or assets to carry you through a rough patch. Remember the old saying about not doing business with your own money? The smart move is to transfer risk to the experts in dealing with it. Trust us, most insurers have deeper pockets than you do.
That’s where an insurance broker comes in. They have the knowledge to assess your business risk, come up with a strategy for managing it, the connections to get you the coverage you need and the commercial ability to obtain the best deal.
Importantly, if the unexpected does happen and you need to make a claim, your insurance broker can guide you through the process to achieve the most positive outcome. Sometimes, as the case below shows, you need expertise to navigate wordings and processes.
This Gallagher manufacturing business client is a large operation producing machine tooling and parts. When a power surge caused an electrical failure three drive units in the vertical machining centre stopped functioning. A $24,265 quotation for repairs to the drive units was submitted as a starting figure, with the potential for costs to escalate as further faults resulting from the surge were discovered.
The insurance assessor initially denied the claim, based on an exclusion in the policy wording relating to damage resulting from power surges. But that wasn’t the whole of the story.
On examination of the incident, the power supplier advised that the issue had occurred as a result of an animal encroaching on the substation. This was recorded on the lodgement of the claim to the insurance company’s loss adjustor, and subsequently the previous denial of the claim was reversed.
Without insurance cover the damage from the power surge had the potential to send the manufacturer’s operating costs soaring, and without the intervention of the insurance broker ‒ who understood how wordings and circumstances can affect a claim ‒ these may not have been covered.
Cost management: You need insurance because as a business you don’t want the exposure to potential costs that could damage your profitability. Instead it makes much more sense to hand off this risk to a specialist.
Delegating: As part and parcel of obtaining that insurance cover, you also need to access a broker’s industry expertise in putting together a program that provides appropriate cover for the complete scope of your operations.
Consultancy: If you have to make a claim, the ability to access an industry insider’s knowledge could save you a bundle.
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