When 22% of SMEs have zero cash reserves, cover is crucial
This article was produced in partnership with BizCover
Brad Miller is co-founder and General Manager at BizCover, Australia’s number one online business insurance service. His 20 plus years of IT expertise furthers BizCover’s mission of revolutionising the insurance industry.
Small businesses are finding it harder to operate amid the ongoing cost of living crisis, particularly regarding their cash flow.
An April 2024 survey of Australian small business owners and decision-makers found that 22% of respondents said they have zero cash reserves. Another 21% predict they will run out of cash in two months. With low cash flow, small businesses face serious financial risks if claims are raised against them for uninsured events.
“Many mortgage brokers might find themselves in the same spot, particularly if their business is hit with unplanned expenses,” says Brad Miller, co-founder and General Manager at online business insurance service BizCover.
“While they likely have industry-required Professional Indemnity insurance, brokers may be overlooking the risk of not insuring their business property and assets as well.”
Building a Business Insurance Pack
A Business Insurance Pack is an insurance package designed to provide cover for a business’ contents, stock, tools and commercial premises when an insured event occurs, like a fire, storm, theft or even accidental damage.
Mortgage brokers can choose from a range of cover options to create a customised package that fits their business needs. Based on BizCover data, Australian mortgage brokers tend to select the following*:
- Building and Glass cover
“If you own the building that you do business from, Building cover may be essential,” says Miller.
Rising construction costs could leave brokers severely out of pocket if events like storms and fires damage their uninsured commercial premises.
However, a broker leasing their business space may also need to insure parts of the office. Commercial landlords may require tenants to carry Glass insurance that covers external windows, doors, and illuminated signage.
- Contents, Theft and Money cover
Mortgage brokers may also consider covering the items stored within their offices, regardless of whether they lease or own the space.
Items such as business records, promotional materials, and furniture are often more expensive to replace than people realise. Contents insurance can be an effective way to manage these costs following a fire, storm damage, or malicious harm.
However, Contents cover does not protect brokers in all instances.
“Many small businesses are unaware that Contents policies typically do not cover theft. This may leave them out of pocket when replacing stolen items and repairing some damage to the premises,” says Miller.
Theft insurance can help brokers manage bills related to a burglary of their secured premises, such as replacing stolen or damaged contents, stock, locks and safes.
Miller adds, “Mortgage brokers may also want to consider whether Money cover is right for their businesses. While you may rarely deal in cash, you might still accept cheques or money orders in the course of business.”
Money insurance covers the theft, loss or damage to business money whilst in transit, in your business premises or in your private residence.
- Electronic Equipment
Mortgage brokers should also consider whether they have essential business equipment that may need to be insured.
Electronic Equipment insurance covers against loss caused by accidental and unforeseen damage or breakdown of electronic equipment, which can include computers and printers.
- Business Interruption
Finally, mortgage brokers may want protection against unforeseen events that could make business as usual impossible.
“Brokers are already working to tight deadlines and helping facilitate high-value loan applications. The last thing they need is for a power outage, a fire, or another major event to prevent them from meeting a crucial deadline,” says Miller.
Business Interruption insurance provides brokers with cover for the loss of income and increased operating costs caused by a specified insured event (such as property damage or fire). It’s designed to help brokers recover from an insured event by paying ongoing expenses (such as wages or rent).
The power of protection
A Business Insurance Pack can be a powerful tool for mortgage brokers to protect their cash reserves in the face of ongoing cost-of-living pressures.
Combined with other essential cover—including Professional Indemnity, Public Liability and Cyber Liability insurance—Business Packs help brokers further secure their business, cash flow, and savings.
For mortgage brokers looking for a Business Insurance Pack or wanting to review rates on their current cover, BizCover can help. Visit here to compare insurance options on the go and see if you can save.
This information is general only and does not take into account your objectives, financial situation or needs. It should not be relied upon as advice. As with any insurance, cover will be subject to the terms, conditions and exclusions contained in the policy wording.
*Based on total Mortgage Broking Service with an active BizCover policy on 11 July 2024.
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BizCover is an online insurance service that takes the complexity out of business insurance. Their online platform allows small business owners to easily quote and compare insurance policies from leading Australian insurers, with instant cover and no paperwork required. Trusted by over 230,000 small businesses, BizCover is committed to making business insurance affordable and drama-free, allowing small business owners to run their business with confidence.
