Chris Yates gives insight into what supermarket owners should keep in mind before choosing a policy.
One of the most important things you can do to protect yourself and your business is to obtain the best possible insurance policy for your supermarket. But knowing what coverage you, and do not need can be confusing. When it comes to ensuring that your business is fully insured, it may be a good idea to speak to an insurance broker.
To give us insight into common mistakes supermarket owners make when picking an insurance policy, we talked to our insurance partner and leading professional in the field, Chris Yates. He gave us expert insight on the do’s and don’ts of coverage, and how to protect yourself and your business against potential risks.
What kinds of mistakes have you observed in supermarket insurance policies?
There’s a variety of mistakes that can be made when seeking coverage for a supermarket, but some are more detrimental than others. Recently, while reviewing a member’s insurance policy, we noticed that their premiums were very low.
After further investigation, we realised that their policy was actually for a ‘convenience store’ instead of a supermarket. If not caught, this could have caused significant issues if it had gone unchecked.
What can happen if an insurance policy does not include the correct business classification?
If unchecked, the insurer can reduce or deny a claim due to non-disclosure. Because insurers collect the premium based on the risk, if the premium collected does not reflect the risk correctly, then the client’s claim can be put in jeopardy.
What other details are often incorrect upon reviewing supermarket policies?
There are several key things that can be overlooked in supermarket insurance policies. Nearly all of our reviews reveal sums that are too low to truly cover the risk. This is called being underinsured and is a huge issue for policy holders in Australia. Preventing underinsurance can be the difference between staying in business after a claim, and having to shut your doors.
Additionally, we frequently see incorrect or omitted disclosure of details such as turnover figures, number of employees, claims histories, and cooking facilities. Often, building descriptions such as age and construction, and security and fire prevention measures are incorrectly documented. We also tend to find missing or incorrect cover extensions when a mechanic or motor trade business is attached to the supermarket.
Incorrect details such as these pose significant risks to your coverage.
Have you seen claims rejected due to incorrect business details?
Absolutely, yes. This is especially true when the risk doesn’t meet the insurer’s acceptance criteria. A few examples of this are as follows:
Imagine the roof is asbestos but has been described as metal or aluminium on the supermarket’s policy. Had the asbestos roof been initially declared, there’s a good chance the policy would not have been issued to begin with. Thus, if you were to lodge a claim, the insurer can knock it back on these grounds, and they often do.
Another example of this can be seen when incorrect security is described on the policy and fails to meet the insurer’s requirements for the cost covered. If a break-in occurs, and your business suffers a loss of approximately $20,000 in tobacco products, your insurer can knock back the claim.
The same can be seen with undisclosed equipment such as deep fryers, which can cause fires. If not disclosed, insurers can reduce the claim amount and you can be stuck paying for significant damages out of pocket.
For this reason, it is paramount that the details on your policy are true and correct.
Need help perfecting your policy? Get the help you need, today.
IndiHub is committed to helping all of our members find coverage that protects them and their supermarket. To prevent issues surrounding your insurance policy, it’s important that all supermarket owners have their policy reviewed by an insurance specialist who understands the grocery industry.
Don’t pay for a policy that doesn’t cover you completely. Chris can help you get the best policy for your needs, at a cost that makes sense for your business. Reach out for a free review of your current policy today.